Power Instability Threatens Lynas’ Rare Earths Supply Chain Reliability
Lynas Rare Earths faces significant power disruptions at its Kalgoorlie processing plant, causing notable production delays that ripple through its Malaysian operations. The company is urgently seeking solutions to restore output within the financial year.
- Power supply disruptions at Kalgoorlie Rare Earths Processing Facility
- Significant lost production of Mixed Rare Earth Carbonate (MREC)
- Malaysian facility’s scheduled maintenance limits mitigation options
- Collaboration with WA Government and Western Power underway
- Exploring off-grid power solutions to recover lost output
Power Disruptions Shake Kalgoorlie Operations
Lynas Rare Earths Ltd has disclosed a troubling development at its Kalgoorlie Rare Earths Processing Facility in Western Australia, where a surge in power supply interruptions has severely impacted production. The facility relies on Western Power’s Eastern Goldfields Load Permissive Scheme (ELPS), a system Lynas joined in 2021 promising cleaner and more reliable power compared to diesel generators. However, 2025 has seen a marked increase in outages, culminating in significant lost output of Mixed Rare Earth Carbonate (MREC) during November.
Ripple Effects on Malaysian Processing
The disruption at Kalgoorlie is not contained locally. The MREC produced there is a critical feedstock for Lynas’ Malaysian processing plant, where it is refined into finished rare earth products. Unfortunately, the Malaysian kilns are currently offline for scheduled major maintenance, meaning they cannot ramp up production to offset the shortfall. This timing mismatch exacerbates the impact, delaying finished goods output and potentially affecting supply commitments.
Urgent Efforts to Restore Stability
Lynas is actively engaging with the Western Australian Government and Western Power to diagnose the root causes of the outages and explore ways to enhance power reliability. While these discussions are progressing rapidly, any improvements are unlikely to materialize in time to salvage production this quarter. The company estimates the lost production could equate to roughly one month’s output, though exact figures remain uncertain due to the unpredictable nature of the power supply.
Exploring Off-Grid Alternatives
In parallel, Lynas is investigating off-grid power generation solutions as a contingency to regain control over its energy supply. Should a viable short-term off-grid option be implemented, the company expects to recover lost production within the current financial year. Despite these challenges, Lynas reassures stakeholders that it will still produce enough finished product to meet key customer needs, underscoring its commitment to supply chain reliability.
Looking Ahead
The power supply issues at Kalgoorlie highlight the vulnerabilities of relying on regional grid infrastructure for critical mining and processing operations. Lynas’ proactive approach to resolving these disruptions and exploring alternative energy sources will be closely watched by investors and industry observers alike, as the rare earths sector remains strategically important amid global supply chain shifts.
Bottom Line?
Lynas’ next moves on power solutions will be pivotal in stabilizing production and reassuring markets.
Questions in the middle?
- What specific technical or infrastructure issues are causing the ELPS outages?
- How quickly can Lynas implement off-grid power solutions and at what cost?
- Will these disruptions affect Lynas’ longer-term supply contracts or customer relationships?
