Strong final quarter for Lynas as demand boosts rare earth sales
Shares in rare earths miner Lynas jumped more than 10 per cent on Monday after the company said it had booked record sales revenue in the June quarter.
Shares in rare earths miner Lynas jumped more than 10 per cent on Monday after the company said it had booked record sales revenue in the final quarter of the financial year despite a fresh wave of Covid-19 in Malaysia.
Lynas managing director Amanda Lacaze said the global economic recovery had helped create strong demand for rare earths products from the company’s Malaysian refinery, despite a slowdown in the car sector caused by a worldwide shortage of semiconductors.
Quarterly sales revenue grew 40 per cent on the March quarter to a record $185.9m, Lynas said, with the average selling price for its basket of products lifting 10.1 per cent to $39.10 a kilogram.
Lynas is still only operating its Malaysian refinery at 75 per cent capacity, and Ms Lacaze said the renewed outbreak of Covid-19 in Malaysia – the country has more than 1 million cases, with new cases averaging more than 17,000 this week – had made operating the facility extremely challenging.
Malaysian government restrictions meant the plant was operating with only 40 per cent of its total workforce allowed on site at any time, and the facility has faced water shortages in the industrial estate where it is located.
Ms Lacaze said the company had ensured zero workplace transmission at the Malaysian operations by testing all staff and contractors before being allowing them on site and providing nearby accommodation for staff so they could limit their movement.
“Where our people have been exposed outside of the workplace and are required to quarantine, we have continued to pay and support them,” she added.
The company sold down stockpiles amid strong demand during the June quarter, selling 4758 tonnes of rare earth products, while its refinery produced 3778 tonnes.
“This result reflected sustained demand for Lynas NdPr products and strong market pricing, as end users and governments around the world continue to recognise the need for a diversified supply of responsible rare earth materials,” Ms Lacaze said on Monday.
Ms Lacaze said Lynas plans to expand its operations in WA and the US were on track, with the WA government considering its application for a cracking and leaching plant in Kalgoorlie.
The company had started early works at the project already.
The US Department of Defence is also reviewing Lynas’s plans for the construction of a heavy rare earths refinery in the US after the company submitted its design and engineering plans during the quarter.
But the company still faces headwinds in Malaysia as it races to find a permanent new site to store low-level radioactive waste from the refinery ahead of deadlines set by the Malaysian government – a process slowed by the pandemic.
“In light of ongoing delays, we have prudently identified a second potential site for the permanent disposal facility in conjunction with government and regulatory authorities,” the company said.
Lynas is also awaiting the outcome of a legal challenge to a conditional licence granted in 2019 to allow its refinery to continue operating.
Lynas shares closed up 68c, or 10.6 per cent, to $7.11 – the highest since 2012.
More Coverage
