LYNAS Rare Earths Ltd., one of the few suppliers of the critical minerals outside China, said global shipping disruptions are getting no better, after chartering its own vessel to avoid delays for customers.
“Shipping delays and disruptions continue around the world and in some cases are getting worse,” the company said in its quarterly production report on Wednesday. Rare earths are considered a strategic material, used in everything from electric vehicles to military hardware.
It was taking 33 days to get its material from Fremantle in Australia to Kuantan in Malaysia as of December – up from 15 days last March, Lynas said. To mitigate the impact, the company chartered a ship for that route, which takes concentrate from its Australian mine for processing at a plant in the Southeast Asian nation.
The extra costs are outweighed by the benefit of ensuring continuity to customers, Lynas said. The company expects to continue with a mix of charter and commercial shipping in the near-term.
The two-year long pandemic has caused disruptions in transportation as the global economy grapples with shortages of front-line workers. Shipping costs remain at multiples of levels seen early in the crisis, raw material prices are still elevated, and disruptions are likely to last through this year, according to analysis by Oxford Economics.
“Many supply chains are yet to return to normal and we see this continuing for some time,” Lynas said.