Key facts
- Lynas Rare Earths plans to secure new mine supply from global project developers.
- The company is in discussions to establish a magnet processing facility in the United States.
- Lynas reported a net profit of A$222.4 million for the fiscal year ended June 30, up from A$8 million a year prior.
- The profit missed a consensus estimate of A$242.5 million.
- Average selling prices for rare-earth oxide rose 59% to A$80.7 per kilogram.
Lynas Rare Earths is actively seeking to expand its global supply chain, with plans to secure new mine supply from project developers worldwide and establish a magnet processing facility in the United States. This strategic move aims to reduce reliance on China, which currently dominates global rare earth production.
The company's announcement came as it reported a significant increase in annual profit to A$222.4 million for the year ended June 30, a substantial rise from A$8 million in the previous year. This surge was driven by record average selling prices for rare-earth oxide, which increased by 59% to A$80.7 per kilogram, and strong demand, partly due to customers prioritizing sustainable supply chains outside of China. However, the profit figure missed market expectations of A$242.5 million, leading to an immediate 8% drop in Lynas's shares.
Interim CEO Pol Le Roux indicated that Lynas is in discussions with various parties for both acquiring new mine supply and potentially acquiring ionic clay businesses. He also confirmed early-stage talks for developing a magnet-making facility in the U.S., emphasizing that the company is on track with its development plans. Analysts noted that Lynas has addressed operational challenges related to ore quality at its Mt Weld mine and resolved issues at its Kalgoorlie plant, suggesting improved operational stability.
The global push to build rare earth supply chains outside of China is intensifying, particularly among the U.S., Europe, and their allies, given China's control over approximately 90% of global production, including essential magnets for key industries. China's temporary suspension on export controls for certain rare earth products is set to expire in November.