Lynas Rare Earths boss Amanda Lacaze predicts US-Australian cooperation on critical minerals supply chains will continue to grow under the new Donald Trump administration despite doubts about his commitment to the Inflation Reduction Act.
Ms Lacaze was speaking in Kalgoorlie, where Lynas officially opened a new $800m rare earths cracking and leaching plant that will eventually supply a refinery in Texas financed by the US Department of Defence.
The partnership started under the previous Trump administration and grew out of concern over how reliant the US was on China for supply of materials vital in modern weapons systems, as well as in renewables and electronics industries.
“Our engagement with the US government and the initial agreement to work in partnership to deliver a US-based solution started under the last Trump administration,” Ms Lacaze said.
“We don’t see that there will be any stepping back under the MAGA (Make Amercian Great Again) administration. I think that the idea of reshoring manufacturing and ensuring resilient supply chains of critical materials will continue.
“The US government is a big and complex beast, and I think that the change in presidency will not change the people with whom we interact, or the execution on the project.”
Work on the Lynas heavy and light rare earths refinery in Texas has been held up as the company seeks approvals around waste water management.
Lynas purchased the 60-hectare site in Calhoun County from a subsidiary of chemicals giant Dow, and expects to benefit from having other Dow operations in the industrial precinct.
Ms Lacaze said it was too soon to tell if the Trump administration would speed up permitting in mining and mineral processing in the US, but said that, regardless, Lynas would not cut corners.
Fortescue director Mark Barnaba said there were big question marks over the future of the IRA, which through tax credits and other incentives has fired investment in electric vehicle-related industries as well as green hydrogen.
Most observers believe it is unlikely Mr Trump will try to repeal the IRA even though he has gained control of the Senate. Some of the Obama administration’s energy policies were easier to unwind because they stemmed from executive orders.
“Has the horse bolted such that it’s not worth trying to pare it (the IRA) back, or it can’t be pared back, or does he make it a major issue?” Mr Barnaba said.
“It may well be somewhere in between. It may be pared back, but not completely eliminated. It’s just difficult to see. He is pragmatic.
“The energy transition is occurring. More wind capacity was installed during his [Trump’s] first term than in [President Joe]Biden’s term,” Mr Barnaba added.
“It’s not as if this is a president who doesn’t understand that there’s an energy transition. It’s probably going to be more about the rate at which it occurs.”
At a speech in New York in September, Mr Trump said his plan was to terminate “the Green New Deal, which I call the Green New Scam”.
He added: “(We will) rescind all unspent funds under the misnamed IRA.”
Fortescue and Woodside Energy have counted on access to IRA incentives to underpin US hydrogen ventures.
However, they have been unhappy about proposed rules on access to tax credits, and lobbied for changes.
Many considered Fortescue’s $US550m hydrogen project in Arizona a 50-50 prospect regardless of the election result. On its LNG investments in the US, Woodside chief executive Meg O’Neill has noted they are permitted, and that US states have more of a policy say in the industry than federal authorities.
In Kalgoorlie, Lynas was hit by a power outage as it prepared to open the new cracking and leaching plant alongside federal Resources Minister Madeleine King.
Ms King said she would take up issues around the reliability of power supply to the mining city, already reeling from the collapse of Australia’s nickel industry, with the Western Australia’s Labor government.
Ms Lacaze confirmed BHP was now having to import sulphuric acid from overseas to supply the Lynas plant at Kalgoorlie under a contract that runs until 2027.
Sulphuric acid is a byproduct of nickel smelting. However, BHP has suspended its mining and processing operations in the Goldfields for at least the next two years in the face of heavy losses and increasing global supply from Chinese-backed producers in Indonesia.
The acid is the major reagent used in cracking and leaching of rare earths, and Lynas had been relying on supply from the BHP smelter.
“It’s frustrating. One of the benefits of being in Kalgoorlie was the proximity to the acid from the smelter,” Ms Lacaze said.
“Having a local supply of our big volume reagent is highly beneficial. No one, including BHP, thought three years ago when we wrote that contract that the smelter would be shut down altogether.
“It’s been difficult for them, difficult for us.”
This article first appeared in The Weekend Australian.
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Publish date : 2024-11-10 11:00:00
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