Lynas Rare Earths ‘extremely disappointed’ water contract with City of Kalgoorlie-Boulder has created crisis

Lynas Rare Earths says it is “extremely disappointed” its recycled water contract with the City of Kalgoorlie-Boulder “has become controversial for reasons outside of our control”. The mining company, whose $800 million cracking and leaching plant was officially opened on the outskirts of West Kalgoorlie last month, also said it was told when it signed the deal in August 2021 there was enough recycled water available to serve both Lynas’ and community needs. Lynas said it consulted extensively with the city about the contract and “we were also advised that works would be undertaken to increase the efficiency of recycled water capture and storage to serve future needs”. “We signed our contract with the city in good faith on the basis of information provided to us,” the company said. “We are extremely disappointed that this contract — which has provided, and will continue to provide, long-term income and benefits to the city and its residents — has become controversial for reasons outside of our control.” The company made its views known on Thursday after revelations the Kalgoorlie-Boulder Racing Club’s 2025 season might not go ahead because of the city’s water shortage. The club relies on the city’s recycled water to irrigate its track to the standard required for racing, but from next year Lynas will use its full 1.7 gigalitres a year quota allocated to it under the contract. This means there will not be enough water for the racing club. Meetings took place in Kalgoorlie-Boulder this week to find solutions to the crisis. These meetings did not immediately find a fix, leading both State Water Minister Simone McGurk and Nationals WA candidate for Kalgoorlie Tony Herron to slam the deal. Lynas said on Thursday its ability to access recycled water was a key factor in the selection of Kalgoorlie-Boulder for its processing facility, which had created 115 residential jobs and established a future-facing new industry in the city. “The contract provides an ongoing revenue stream for the city by commercialising recycled greywater and requires Lynas to pay commercial rates for the full water allocation, even when only a portion of the allocation is used, as has been the case while our facility has been under construction and ramp-up,” the company said. “To date, Lynas has made significant payments to the city for water allocated to but not used by Lynas. “This has provided an ongoing revenue stream to the city for the benefit of Kalgoorlie residents, and recycled greywater not used in our operations during this time has been available for reallocation by the city. “Lynas, and our people, are firmly committed members of the Kalgoorlie community, financially and socially.” The city is holding a probity report into how the contract with Lynas was put together, and this week revealed the budget had more than doubled to $78,000. City chief executive Andrew Brien told the Kalgoorlie Miner the report was “a lot bigger” than initially expected, with almost twice as many documents to go through. However, he also said the result of the probity report was unlikely to change anything. “This is really a report to say what happened, was it right, and where did we miss out if we missed out anywhere, and did everything comply with what it is supposed to?” Mr Brien said. “It won’t change anything at the end — that’s the reality of it.”