Lynas Corporation and Siemens join forces on rare earths production
25 July 2011
Australia’s Lynas Corporation and Germany’s Siemens have signed a letter of intent to establish a joint venture for the production of rare earth magnets.
The investment, split 55 per cent Siemens and 45 per cent Lynas, will produce magnets for use in energy-efficient engines and wind turbines.
The proposed partnership is designed to fulfil key growth objectives for the two organisations, integrating them into global supply chains. Lynas will provide raw materials to the joint venture through long-term supply contracts.
“This planned joint venture would be an important strategic pillar for us to pursue a long-term and stable supply with high performance magnets,” said Ralf-Michael Franke, Chief Executive of Siemens’ drive technologies division.
“It’s strategically, in my opinion, very significant in that it sets a direction to say that we are using our first-mover position to establish strategic alliances,” said Nicholas Curtis, Chief Executive of Lynas.
Rare earths comprise a group of 15 metallic elements known as the Lanthanide series. The Lynas-Siemens proposed venture will predominantly involve a combined neodymium/praseodymium metal.
Lynas Corporation, an ASX 100 listed miner, is also currently constructing a rare earths processing plant in Malaysia. Siemens is the largest engineering organisation in Europe and employs more than 400,000 people worldwide.
Rare earths have become critical to the global economy, not just for industrial applications but for their use in flat screen televisions, smartphones, tablet PCs and hybrid cars, among others.
Australia has committed to the long-term supply of rare earth metals to Japan, with both countries’ Foreign Ministers reaching an agreement in the context of bilateral trade discussions in late 2010. Around the same time, Lynas announced a strategic alliance with Japan’s Sojitz, finalised earlier this year as a A$315m financing package to fast-track a phase-two expansion of its rare earths project.
Rare earths have also become a key feature of the burgeoning trade relationship between Germany and Russia, with Germany gaining permission to exploit Russia’s deposits.
China accounts for 97 per cent of the world's rare earth production but imposed export quotas in 2010, prompting many countries to find alternative sources for the elements.
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