Lynas mulls magnet plant in Malaysia

KUALA LUMPUR: Lynas Corp Ltd, the Australian rare-earth developer, is looking at Malaysia as a possible destination to build a magnet manufacturing plant, in a planned joint venture with German engineering conglomerate Siemens AG.

Lynas executive vice-president for strategic and corporate communication, Dr Matthew Jones, said it is very natural for the company to want to locate the plant near to the controversial Lynas Advanced Materials Plant, near Kuantan.

"We are still assessing where best to locate the plant, but the east coast of Malaysia is one of the preferred sites. We will finalise the final location by the end of this year," he said in a telephone interview with Business Times yesterday.

Lynas issued a statement yesterday that it has signed a letter of intent with Siemens to establish a joint-venture company for the sustainable production of neodymium-based rare-earth magnets.

The magnets are to serve Siemens' production requirements for energy-efficient drive applications and wind-turbine generators.

The joint venture will be 55 per cent held by Siemens and 45 per cent by Lynas.

Jones said the financial details of the shareholding are currently being worked out and will most likely be announced within a few months.

"It will be a sizeable investment by us because we are building a globally significant manufacturing plant," he said, adding that the magnet production plant is expected to commence operations in the first half of 2013.

Jones said Siemens has high demand for rare-earth magnets for its windturbines and is looking for a secure supply chain outside China, which currently produces 95 per cent of the world's rare-earth magnets but imposes export restrictions.

Under the proposed joint venture, Lynas will produce the magnets and Siemens will be its main customer.

In the press statement, Siemens chief executive officer Ralf-Michael Franke said the joint venture would be a strategic pillar for the Germany-based company to pursue a long-term and stable supply of high performance magnets.

Jones, meanwhile, said there is an increasing demand for rare-earth magnets which can be used in hybrid cars, hard-disk drives, speaker phones and personal computer devices.