“As a responsible business, Lynas has taken steps to ensure the health and safety of our people and our communities and we support the government’s actions to control the outbreak. Accordingly, we have initiated a safe temporary shutdown of our plant into care and maintenance mode.”
Lynas Corporation Limited has temporarily ceased production at its Malaysian plant, in response to the Malaysian government’s recent announcements regarding the escalation of COVID-19 cases and tighter movement controls in Malaysia. The tighter movement controls in Malaysia are currently scheduled to end on 31 March 2020.
As a responsible business, Lynas has taken steps to ensure the health and safety of its people and communities and, the company indicated that it support the government’s actions to control the outbreak. Accordingly, the company has initiated a safe temporary shutdown of its plant into care and maintenance mode.
As part of the safe temporary shutdown, the company has retained some work-in-progress inventory that will allow it to ramp up quickly upon restart. Mt Weld, its ore source in Australia will continue to operate during this period.
The company has taken actions to significantly reduce cash outgoings during the temporary shutdown has indicated intentions to continue paying all its staff during this time.
The company indicated that for its results for the half year ending 31 December 2019, the Lynas Malaysia plant delivered strong production volumes during the March quarter to date.Thus therefore, the company commences this temporary shutdown in a strong cash position and is able to avoid a significant majority of its costs under this shutdown scenario. The Lynas cash balance on 31 December 2019 was A$111.8 million and Lynas currently expects to achieve positive cash flow from operations during the March quarter, before payment of approximately A$14 million relating to the Permanent Disposal Facility (PDF) project announced on 30 January 2020. This positions it well to quickly resume satisfying its customers’ needs upon restart of the plant.