Reuters reported that Australia's Lynas Corporation is set to raise USD 225 million from a new investor giving the rare earths miner a cheaper source of funding to finish building its flagship plant in Malaysia, which is awaiting a licence to open.

Lynas said that it now expects the plant to start production in the Q2 up to five months later than it earlier hoped assuming it wins a temporary operating licence. The forecast cost for the first phase of its rare earths project had increased by about 7% to AUD 640 million.

Lynas has agreed to sell USD 225 million in convertible bonds to funds managed by Mount Kellett Capital Management, a firm which specializes in snapping up shares in companies in distressed or unusual situations.

Mr Jason Maynard co founder of Mount Kellett said that "We are delighted Lynas accepted our offer to become a significant investor and look forward to participating in the development of the world's first reliable, sustainable supply chain for rare earth elements outside of China."

The funds will be enough for Lynas to complete construction and commissioning of the first phase of its rare earths processing plant in central Malaysia which has been delayed due to environmental protests. It has secured USD 50 million up front with the remainder expected in February.

As a result it will retire a AUD 125 million working capital facility from JPMorgan Chase and Sumitomo Mitsui Banking Corporation untapped as it had been subject to Lynas winning a licence for its Malaysian plant.

(Sourced from Reuters)