Friday, July 8, 2011

Lynas Corporation And Siemens In Rare-Earth Magnet Venture

Published on Friday July 08 2011

Lynas Corp will team up with Siemens in a joint venture that will help the German technology giant secure a long-term source of supply-constrained rare earth elements, coveted for their use in hybrid car engines, smartphones, iPads and other modern technologies.
The two companies have signed a letter of intent to form a joint venture, of which Siemens will own 55 per cent, that will specialise in the production of high-powered rare earth magnets used in energy-efficient engines and wind turbines.

‘‘This planned joint venture would be an important strategic pillar for us to pursue a long-term and stable supply with high performance magnets,’’ Ralf-Michael Franke, chief executive of Siemens’ drive technologies division, said.

The chief executive of Lynas, Nicholas Curtis, said the deal was part of its strategic objective to become integrated into the supply chains of its end customers.

‘‘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,’’ Mr Curtis said.

Mr Curtis said Siemens – and major Japanese investor Sojitz – were satisfied with the environmental credentials of Lynas, despite a large amount of negative publicity generated from its plans to build the world’s largest rare earth refinery in Malaysia.

‘‘[Siemens have] reviewed it fully, they understand and are comfortable with the reality of our operations, as are the Japanese,’’ Mr Curtis said.

‘‘You can’t go into the windfarm business based on an unsustainable environmental platform. It’s absolutely critical for them for this platform to be green.’’

Siemens employs 36,000 staff in its drive technologies division, which generated 7 billion euro ($9.34 billion) in sales and is a heavy innovator in energy efficient technologies.

China dominates 97 per cent of the world's rare earth production and has imposed export quotas in recent months, sparking a global rush to find alternative sources for the valuable elements.

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