Rare earths producer Lynas secures A$200M from Japanese govt
(Kitco News) - Rare earths producer Lynas (ASX: LYC) (OTC: LYSDY) today announced the signing of new agreements with Japan Australia Rare Earths B.V. ("JARE"), pursuant to which JARE will provide a contribution of A$200 million.
According to a press release, in addition, JARE will forego the historic US$11.5 million interest due under the loan facility for the period from 1 January 2016 to 31 December 2016, which has previously been deferred by JARE.
The company said that JARE is a special purpose company established by Japan Organization for Metals and Energy Security (JOGMEC) and Sojitz Corporation. Lynas and JARE are parties to a long term senior loan facility.
"The new agreements will further strengthen the Lynas balance sheet and support funding of capital projects designed to meet accelerating global demand for rare earth materials," the company noted in a statement.
"JARE's contribution will support Lynas' ambitious growth agenda, and may include current and planned projects designed to increase production of light rare earth and heavy rare earth materials. As market demand increases, this funding will assist Lynas to meet its objective to grow with the market," it added.
Commenting on the new agreements, CEO and Managing Director Amanda Lacaze said, "Lynas has a huge appetite for growth and a large capital investment plan. This $200 million capital investment from the Japanese Government, through JARE, will boost our balance sheet and assist in assuring the delivery of our major growth projects.
"JARE has been a valued and strategic partner to Lynas since 2011 and we welcome these new agreements which better reflect demand forecasts from the Japanese rare earths market. We also thank JARE for agreeing to forgo the historic interest payment of US$11.5 million from 2016."
"Today, Lynas is the market leading supplier of NdPr to the Japanese rare earths industry and these new agreements demonstrate the deep commitment of JARE to the ongoing growth and success of our company," she added.
Lynas Rare Earths is the world's only significant producer of separated rare earth materials outside of China. The company's Mt Weld mine in Western Australia is acknowledged as one of the world's premier rare earths deposits.
Lynas also operates the world's largest single rare earths processing plant in Malaysia where it produces high-quality separated rare earth materials for export to manufacturing markets in Asia, Europe and the United States.
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