Australia’s Lynas Rare Earths (ASX: LYC; US-OTC: LYSCF, LYSDY) has secured minimum-price agreements covering more than half its production as manufacturers pay premiums for supplies outside China.
Average selling prices jumped 88% to a record A$102.1 ($72) per kg in the three months to Sept. 30, lifting revenue 55% to A$310.1 million ($218 million), the company said Thursday. Sales volumes fell 18% from a year earlier. The pricing gains reflected stronger market prices, premiums and the bundling of light and heavy rare earths, Lynas said.
“There is a real strategy from OEMs to secure part of their supply from outside China,” interim CEO Pol Le Roux told analysts on a call Thursday, referring to original equipment manufacturers.
The contracts give Lynas some protection from Chinese price swings as manufacturers seek alternative suppliers. But separating rare earths reliably at commercial scale remains a challenge for the emerging supply chain outside China.
Lynas shares rose 4.2% Thursday in Sydney, then fell 7.1% Friday to A$12.10, valuing the company at about A$12.2 billion.
Shutdown pressure
Lynas sold 3,039 tonnes of rare earth oxides during the quarter while producing 4,254 tonnes, up 7% from a year earlier. Output of neodymium-praseodymium oxide, used in permanent magnets, reached a quarterly record of 2,082 tonnes.
Le Roux attributed the gap between production and sales partly to strong output late in September that couldn’t be invoiced before quarter-end. Analysts pressed for a breakdown of neodymium-praseodymium sales to distinguish changes in product mix from stronger prices; he said Lynas would seek to provide that detail in future reports. Lynas didn’t disclose its floor prices in the quarterly release.
Production is set to fall in the December quarter as its Malaysian plant shuts for about a month of maintenance. Kalgoorlie, in Western Australia, also faces a roughly two-week shutdown for electricity-network upgrades.
Inventories, including material held by its Japanese distributor, should allow Lynas to maintain customer supplies during the stoppages, Le Roux said. The company plans modifications to relieve processing bottlenecks and improve equipment reliability, with stronger production expected in the quarters ending March and June 2027.
Lynas is using dysprosium and terbium supplies to help secure longer-term relationships with magnet makers buying neodymium and praseodymium. Combining light and heavy rare earths gives customers more of the materials they need from one supplier, Le Roux said.
Lynas ended September with A$1.21 billion in cash and short-term deposits.
Brazil acquisition
Earlier this month, Lynas agreed to buy Meteoric Resources (ASX: MEI; US-OTC: METOF) in a deal valued at A$968 million. The proposed all-share acquisition would add the Caldeira rare earths project near Poços de Caldas in southeastern Brazil. Completion remains subject to shareholder, court and regulatory approvals.
Lynas operates the Mt Weld mine in Western Australia, processes material at Kalgoorlie and separates rare earths in Malaysia. The initial plan is to produce mixed rare earth carbonate at Caldeira and send it to Malaysia for separation.
An engineering review is examining how Caldeira could fit Lynas’ processing network. The priorities were to reduce costs across mining and processing and bring the project into production as quickly as possible, Le Roux said.