Once struggling to turn production into profit, Lynas Rare Earths has pulled off a remarkable turnaround, posting record interim earnings amid a surge in global demand for critical minerals.
The company’s net profit after tax soared to $80.2 million, up from just $5.9 million in the previous corresponding period, a thirteen-fold increase that signals a rare earths market finally working in Australia’s favour.
China’s dominance in the rare earths market has seen Lynas struggle to translate production into profit, but that has drastically changed thanks to critical minerals deals with the US and a broader focus on reducing reliance on Beijing for supply.
“We completed commissioning for the Mt Weld expansion project, delivered the first half year of heavy rare earth production at Lynas Malaysia, launched the Towards 2030 growth strategy and successfully completed an equity raising to support our growth agenda,” Lacaze said.
“All of this occurred in a global context where the focus on rare earth supply chain security is reshaping the market through government actions to address market dysfunction and supply challenges.”
The Mt Weld expansion project was largely commissioned by December last year, with the new flotation circuit ramping up to 70 per cent of nameplate capacity.
Lynas produced 6375 tonnes of rare earth oxides, including 3407 tonnes of neodymium-praseodymium (NdPr), with sales volumes and revenue up from the prior period. Average selling prices strengthened thanks to market gains and a higher share of sales priced independently of market indices.
“Lynas is the only company able to capture the full value of this market upside,” Lacaze said. “This is due to our position as the only commercial producer of separated light and heavy rare earth oxides outside China today.”
To fund its Towards 2030 growth strategy, Lynas completed a $750 million institutional placement and a $182 million retail share plan, securing capital to expand its operations further.
The company’s comeback is not only a story of operational excellence. Global government actions, particularly US policies to reduce reliance on Chinese rare earths, have supercharged demand and prices.
NdPr prices climbed from $US49/kg to $US74/kg over the past year, recently hitting $US110/kg following Pentagon agreements and other international interventions.
“We have never asked for subsidies, but there is no question there has been market failure for many years in the rare earths industry,” Lacaze told the said. “Enacting policies that ensure the market is functioning properly is important.”
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