‘Fabulous miners’ but ‘crap manufacturers’: Lynas’ Lacaze tells Australia to get real on rare earths dreams

Lynas Rare Earths chief executive Amanda Lacaze dished out frank words for Australia’s goal of becoming a global contender, chiding government handouts for “uneconomic” projects and standing by her criticism of plans to hoard the precious resources in a national stockpile. Inflamed tensions between the world’s two global superpowers has swung the spotlight round to whether Western countries can break China’s stronghold on mining and refining rare earths - a group of valuable minerals critical for making magnets used in iPhones, missiles and electric vehicles. Speaking days after the Federal election at the Macquarie Australia Conference in Sydney on Tuesday, Ms Lacaze refused to walk back her attack on the Albanese Government’s plan to fund domestic critical minerals projects, saying the policy “wasn’t completely thought through”. In a colourful interview, the CEO also said Australia was “pretty crap” at manufacturing and suggested the country would be better leveraging off its strong trade relationships with Asian countries and using their manufacturing capabilities to handle the downstream processing of rare earths. The Federal Government has poured significant funding into trying to build Australia’s ability to mine and process its minerals into more valuable products. Last month it released a pre-election policy promising a $1.5 billion national offtake scheme to buy a yet-to-be specified list of rare earths from Australian miners. That stockpile would then become a potential bargaining chip in global trade negotiations. Rare earths were the only minerals specifically highlighted as a focus for the Government. Ms Lacaze said the sector was not consulted on the policy before it was announced. “We have a good relationship with the Minister,” she said. “I know that there are some who have lobbied for it for some time but I just can’t see how it will work to make a better industry. “I just think there are better ways to spend money, or even to not spend money is also an option.” She said Australia’s lack of infrastructure and reliable cheap power made pursuing the refining of rare earths, or manufacturing in general, a difficult task. “Despite what the Government might aspire Australians are actually pretty crap at manufacturing. We don’t have good infrastructure for it. We’ve got high costs, we’re actually not great at the skills,” she said. “We’re fabulous miners, we’re really fabulous farmers but were not great at manufacturing. Our very near neighbours in South-East Asia are very good at manufacturing.” Lynas mines rare earths from it Mt Weld flagship operation near Laverton in the northern Goldfields. It recently opened a cracking and leaching operation in Kalgoorlie to turn mined rare earth ores into a carbonate. But the company carries out the complicated feat of separating rare earths and handling the radioactive waste at a processing facility in Malaysia. Fellow listed miner Iluka Resources is angling to build a local rare earths refining industry, and is now building a plant at Eneabba, 270km north of Perth. Once completed in 2027, it will be the first rare earths refining operation in Australia. But it has come with a $2 billion price tag, of which the Federal Government has stumped up $1.65b. The huge non-recourse loan was first signed off under the Morrison government but extended by another $400 million after a year of negotiations with the Albanese Government. “You need to focus on developing a strong and successful business,” Ms Lacaze said on Wednesday. “And one which relies upon government funding to construct and then government funding to buy what you produce is, I think, by definition uneconomic.” Responding to US President Donald Trump’s tariffs, China in April halted exports of magnets and a group of seven rare earth elements, stoking fears over supply among Western buyers. Overstocking of supplies in China has already kept rare earths prices depressed for several years and made it difficult for new producers to enter the market. Ms Lacaze was doubtful whether the likes of European electric vehicle producers and other international buyers would pay more for a product just because it was made in Australia. “In the European automotive manufacturing industry they’re not sitting there saying ‘please let us pay more for our inputs’ . . .we need to remember that we need to be competitive.”