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Highlights
- Lynas Rare Earths (LYC) reports a decline in half-year profit due to market conditions.
- Despite overall sales drop, NdPr sales volume sees a 23% increase.
- Major project investments aim to enhance capacity, efficiency, and sustainability.
Lynas Rare Earths (ASX:LYC) has faced a challenging market landscape, with the company reporting a significant drop in net profit for the half-year ending 31 December. The rare earths producer recorded a net profit after tax of $5.9 million, a sharp decline from the $39.54 million reported a year prior. This downturn is primarily attributed to weaker rare earth prices and a 14% decline in total rare earth oxide sales compared to the previous corresponding period.
Resilient Demand for NdPr Amid Market Uncertainty
Amid the broader market downturn, a bright spot emerged in the form of increased neodymium and praseodymium (NdPr) sales volume, which saw a 23% rise. However, despite the uptick in sales, the average Chinese domestic price of NdPr dropped from US$56 to US$49 between December 2023 and December 2024. This price decline tempered the revenue impact of the higher sales volume, leading to only an 8% increase in overall sales revenue.
Chief executive officer Amanda Lacaze acknowledged the impact of low prices on profitability but emphasized the company's long-term confidence in the sector. She pointed to several factors that could support an improved market outlook, including demand growth in key industries, proposed regulatory changes in China, and ongoing government support for supply chain development.
Strategic Investments to Strengthen Future Growth
Lynas remains committed to expanding its operations, investing $267 million into major projects during the half-year period. The company achieved significant milestones, including commissioning and integrating Stage 1 of the Mt Weld expansion project, ramping up production at the Kalgoorlie rare earths processing facility, and officially opening the Kalgoorlie facility.
Further advancements were made at the Lynas Malaysia facility, with progress on the mixed rare earth carbonate receival facility, a new solvent extraction flowsheet, and product finishing equipment installations. These projects aim to enhance capacity, efficiency, and sustainability, positioning the company for future market improvements.
Despite the current challenges, Lynas has built a reputation for navigating complex market conditions and remains optimistic about long-term growth. With strategic investments and an experienced team, the company is focused on strengthening its operations and capitalizing on future market opportunities.
