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Lynas to build rare earths plant in WA

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Lynas Corporation has flagged turning an historic mining town in Western Australia into a critical minerals hub as the United States looks to reduce its reliance on supply from China.

Lynas has settled on a site at Kalgoorlie for a new rare earths cracking and leaching plant after being ordered to remove that part of its operations from Malaysia.

It is considering investing in downstream processing at Kalgoorlie and building a separate chemical plant to supply the reagents needed to produce finished rare earths materials.

Lynas has also raised the possibility of its existing chemical suppliers in Malaysia investing in new production capacity in Kalgoorlie.

The rare earths producer expects the new cracking and leaching plant to cost the best part of $500 million in what it says is the first step in creating a critical minerals hub in WA's Goldfields region.

Lynas has signed an option to sublease an industrial property from the City of Kalgoorlie-Boulder, which has welcomed the company's planned investment.

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Under a a memorandum of understanding signed with the City in September, Lynas had also considered a site adjacent to the BHP nickel smelter about five kilometres south-west of Kalgoorlie.

The selected area is in a new industrial park on the western outskirts of the mining centre.

Lynas had also considered building at its Mount Weld rare earths mine near Laverton.

The City of Kalgoorlie holds no significant concerns about the company's ability to safely store low-level radioactive waste produced in cracking and leaching.

Malaysian authorities have given Lynas four years to have the new plant up and running and ordered it to build permanent disposal facilities for more than 500,000 tonnes of waste currently held at its $1 billion processing hub at Kuantan.

Amanda Lacaze-led Lynas also intends to build the cracking and leaching plant with enough capacity to process for other rare earths miners.

Ms Lacaze said the company expected to be able to dry stack the low-level radioactive residue produced in cracking and leaching at the new plant at Kalgoorlie.

She said the requirement to remove cracking and leaching from Malaysia gave Lynas the opportunity to reshape its industrial footprint, including looking at options for solvent extraction in WA.

Brad Thompson writes across business and politics from Western Australia for The Australian Financial Review. Brad is based in our Perth bureau. Connect with Brad on Twitter. Email Brad at brad.thompson@afr.com

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