• NdPr Production: 2,969 tonnes, up versus the prior corresponding period.
• NdPr Sales Volume: 3,178 tonnes, reflecting increased production and inventory.
• Capital Expenditure: $267 million in the six months.
• Cash and Short-term Deposits: $308 million at the end of the period.
• Ore Reserve: Over 2 million tonnes of rare earth oxides, with a 20-year life of mine.
• Mineral Resources: 106 million tonnes, including weathered laterite and fresh carbonatite.
• Heavy Rare Earths: Ore reserve grade increased to 400 ppm dysprosium oxide and 100 ppm terbium oxide.
• Market Price Impact: NdPr price improved by about $5 per kilo following new draft regulations in China.

• Warning! GuruFocus has detected 5 Warning Signs with LYSCF.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Lynas Rare Earths Ltd (LYSCF) reported increased production, sales volume, and sales revenue in the first half of 2025 compared to the prior corresponding period.
• The company achieved significant safety milestones, including 1 million hours LTI free on the Mt. Weld expansion project and 1.2 million hours LTI free in Lynas Malaysia.
• The Mt. Weld expansion is progressing well, with a focus on increased capacity, improved efficiency, and enhanced sustainability.
• Lynas Rare Earths Ltd (LYSCF) remains the only non-Chinese producer capable of banking the full value of improvements in oxide prices, positioning it favorably in the market.
• The company has a strong ore reserve at Mt. Weld, with more than a 20-year life of mine, supporting an expanded production rate of 12,000 tonnes per annum of NdPr oxide finished product.

Negative Points

• Rare earth prices have remained stubbornly low over the past six months, impacting financial results.
• The company faced challenges with impurities in the form of sulphate at the Kalgoorlie plant, requiring ongoing adjustments to the flow sheet.
• Foreign exchange effects, including a significant weakening of the Australian dollar, negatively impacted financial results.
• There was a write-down of some Lynas samarium inventory, contributing to financial challenges.
• The market demand growth has been sustained but at lower rates than previously forecast, affecting overall market conditions.

Q & A Highlights

Q: Can you provide an update on the impurities issue at the Kalgoorlie plant and the current utilization rate? A: Amanda Lacaze, CEO, explained that the Kalgoorlie plant is working on resolving impurities, specifically sulphate and particle size issues. The plant aims to meet the Lynas 2025 target of 10,500 tonnes per year by the end of FY 2025, with one-third of the feedstock from Kalgoorlie and two-thirds from Malaysia.

Q: What is the underlying unit cost of production, and how do foreign exchange and other factors affect it? A: Amanda Lacaze, CEO, noted that foreign exchange effects significantly impacted results. Gaudenz Sturzenegger, CFO, added that the $16-$17 million exchange rate adjustment was due to translation, not transactions. The company is focused on improving efficiency and expects costs to stabilize as new setups become effective.

Q: What are your thoughts on potential rare earth supply from Ukraine and other regions? A: Amanda Lacaze, CEO, expressed skepticism about speculative sources like Ukraine, emphasizing that Lynas is best positioned to supply guaranteed rare earths due to its proven resources and processing capabilities.

Q: Can you elaborate on the heavy rare earth distribution at Mt. Weld and the potential of the fresh carbonatite? A: Chris Torrisi, Executive General Manager, explained that the heavy rare earths are within the weathered saprolite zone, up to 80 meters deep. The fresh carbonatite, while lower grade, offers potential for more efficient processing, contributing to cost competitiveness.

Q: What is the status of the US Seadrift facility, particularly regarding wastewater management? A: Amanda Lacaze, CEO, stated that a pathway has been identified to avoid previous permitting challenges, involving recycling chemicals and water for a zero-discharge site. The company is engaged with the Department of Defense to move forward.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.