Falling demand in North Asia for elements used in industrial magnets, electric cars and defence technology have taken the shine off a production record for Lynas Rare Earths.
The largest rare earths miner outside of China posted record quarterly concentrate production at its flagship Mount Weld mine in Western Australia, according to an update released to the ASX on Monday.
Mt Weld produced enough concentrate to feed Lynas’ Malaysia plant and build a stockpile for a new processing facility being developed in Kalgoorlie.
Perth-headquartered Lynas also recorded its highest ever quarterly production of two of the world’s most sought-after rare earth elements, neodymium and praseodymium (NdPr), at 1864 tonnes from April to June.
Shares in Lynas rose 2.4 per cent or 16 cents to $6.72 in afternoon trade.
Lynas is pressing ahead with the Kalgoorlie plant, despite a shortage of skilled workers, supply chain delays for vital equipment and issues with waste gas treatment.
“We continue to accumulate inventory as we plan for the start up of the Kalgoorlie facility,” CEO Amanda Lacaze said.
“We have secured supply to our key customers and, in the coming months, given low market pricing, we will hold additional inventory directly,” she said.
The company said lower demand for magnets in Japan and China’s recent oversupply resulted in lower market prices for rare earth materials during the period.
“Future pricing trends will depend on the economic recovery in China and the Chinese production quota for the second half of 2023,” Lynas warned.
Sales revenue plunged by almost half to $157.5 million in the June quarter from $294.5m a year earlier, while sales receipts dropped to $188.9m (down from A$351m).
During the quarter, Lynas received a variation in its Malaysian operating licence which allows the company’s billion-dollar processing plant to continue to operate until January 1, 2024.
During years of escalating community opposition to the plant, company executives were accused by a Malaysian politician of being “big bullies” and told to deal with its waste by processing in Australia.
Lynas said it would continue to seek government review to maintain the conditions on which the initial decision to invest in Malaysia were made and to ensure fair treatment as a foreign investor and significant employer.
Lynas Malaysia also delivered another quarter of record production at 1864 tonnes of NdPr.