Lynas Suspends Rare Earth Production at Mount Weld, Australia

Australian mineral producer, Lynas announced on 10 February the firm suspends rare earth production at Mount Weld mine in Western Australia. The firm assumed funding to continue the operation but failed to agree with bond holders for releasing subordinated loan of US$ 95 million.

Banks and funds are withdrawing large investment in mineral and resource businesses after financial crisis in autumn 2008. Financial crisis also impacted actual economy worldwide. The sales of automobiles and electric appliances plunged down. As a result, rare earth demand and price are sharply decreasing.

Many rare earth mines became suffered from worse profitability due to lower demand and price, those which were developed recently along mineral business boom. Rare earth demand is expected to grow in mid and long terms. However, Lynas cannot continue operation of Mount Weld project since the firm relies on funds and debts for the development.