Rare Earths

Lynas posts record March quarter, receives 'many approaches' for long term rare earths sourcing

Tue 12 Apr 22, 10:42am (AEST)
news_mining_3

Stocks in article

lyc
MktCap:
-

Share article

Key Points

  • Lynas achieved record rare earth production in the March quarter
  • Demand for rare earths remains strong, most notably from the automotive industry
  • The Kalgoorlie Project remains on track after receiving full approvals in February

A record March quarter result was easy for Lynas (ASX: LYC) improved production took full advantage of upward trending rare earth prices.

Earnings at a glance

  • Revenue of $327.7m, up 62%

  • Rare earth production of 4,945t, up 17.5%

  • Average selling price of $64.7/kg, up 82%

  • Cash and short-term deposits of $768.4m, up 14%

Pricing momentum

Management notes that the market price for neodymium and praseodymium (NdPr) continued to strengthen in the March quarter. 

“Our customers continue to advise that demand for rare earths remains strong, particularly in the automotive industry,” said CEO Amanda Lacaze.

“Lynas continues to receive many approaches from end users seeking to secure their raw material sourcing over the longer term and is engaged in productive discussions with a number of these end users.”

Management observed that NdPr prices in China reached US$145.4/kg in February before easing to US$144.2/kg in March.

China NdPr Price
Source: Lynas Quarterly Activities Report (April)

Exploration upside

In early March, Lynas announced exploration results from a 1km deep exloration hole into the fresh carbonatite below the current Mt Weld Rare Earths pit.

The drilling returned high-grade rare earth element (REE) mineralisation along the entire 1,20m drillhole, paving way for a potential resource expansion.

Lynas advised that the 'Mining Campaign 4-1 continued during the quarter' to further understand the large endowment.

Kalgoorlie Project on-track

Lynas received full approvals for the construction of the Kalgoorlie Proejct in February.

Kalgoorlie construction works
Aerial view of Kalgoorlie construction works (Source: Lynas Quarterly Activities Report)

The Kalgoorlie Project plays an important role in derisking the production profile for Lynas.

An agreement is in place with the Malaysian Government for a Cracking and Leaching plant outside Malaysia to be in operation before July 2023. After that period, Lynas will no longer be allowed to import raw materials containing Naturally Occurring Radioactive Material into Malaysia.

Lynas price chart
Lynas 12-month price chart

 

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

Get the latest news and media direct to your inbox

Sign up FREE