Low market prices for its key products are keeping a lid on revenue for Lynas Rare Earths as it ramps up commissioning at its new Kalgoorlie processing facility.
The Amanda Lacaze-led company on Tuesday reported a fall in quarterly gross sales revenue to $136.6 million for the three months to the end of June — down from $157.5m a year earlier — as it negotiated a period where “pricing was volatile”.
Despite the drop, Lynas said it had managed to improve average selling prices through the quarter by managing the timing of sales.
Total rare earth oxide production came in at 2188 tonnes — less than half of the 4475t turned out in the prior corresponding period as it completed maintenance works at Lynas’ processing hub in Malaysia. The upgrades aims to lift interim downstream processing capacity to 9000t a year, with an eventual target of 10,500tpa.
It also produced 1504t of neodymium and praseodymium — highly-sought after rare earths that are used in industrial magnets, electric vehicles and defence technology. Lynas is the only major producer of the elements outside of China.
“Despite a slight improvement in China domestic end product demand, market prices remained low,” Ms Lacaze said.
“However, our average selling price improved through the quarter as we carefully managed the timing of sales, especially for heavy rare earth which were quite volatile throughout the quarter.”
Lynas said the ramp up of its $780m cracking and leaching plant in Kalgoorlie continued, and was being managed in line with increased production at its expanding Mt Weld mine in the northern Goldfields and global market demand.
The company said it also remained in talks with BHP following the news that the mining giant would place its entire WA nickel division on care an maintenance as it waits out a depressed market for the key battery ingredient brought on by a flood of cheap supply from Indonesia.
Lynas relies on significant volumes of sulphuric acid from BHP’s nearby Nickel West smelter. Lynas has previously said the operation supports over 100 full-time workers.
“BHP’s ability to supply acid from the Kalgoorlie nickel smelter will be affected by BHP’s announcement and in line with the terms of the supply contract, BHP has affirmed its commitment to using reasonable efforts to supply imported acid to Lynas,” Ms Lacaze said.
“Lynas and BHP have been working together on contingencies for continued acid supply to Kalgoorlie and these plans will now be finalised for implementation.”