Australia's Lynas Rare Earths said it planned to grow its global supply chain on Wednesday, with discussions to secure new mine supply from project developers around the world and support a magnet processing supply chain in the United States.
The comments came after the world's biggest producer of rare earths outside China reported a sharp rise in annual profit, helped by record average selling prices for rare-earth oxide and strong demand, but missed market expectations. Its shares fell as much as 8%.
Annual profit rises sharply on stronger pricing
Lynas posted a net profit after tax of A$222.4 million ($159.37 million) for the year ended June 30, up from A$8 million a year ago. That missed a Visible Alpha consensus estimate of A$242.5 million.
It flagged operational challenges tied to ore quality at its Mt Weld mine in Australia, as well as rising costs. However, it said it has resolved quality issues at its Kalgoorlie plant.
The earnings surge was driven by firm prices and floor price agreements with both Japanese and U.S. customers, which helped reduce volatility, Lynas said.
Its average selling price rose 59% to A$80.7 per kilogram, helped by improved pricing of neodymium-praseodymium, a key rare-earth magnet material, and a higher share of heavy rare-earth sales and sales with pricing not linked to the market index.
Customers continued to prioritise sustainable rare-earth supply chains outside China amid export restrictions, while strong demand lifted sales volumes, it said.
The company is searching for a new CEO, following the retirement of Amanda Lacaze.
Profit beats prior year but misses expectations
Interim CEO Pol Le Roux said Lynas is in talks with project developers of ionic clay deposits around the world for new supply and expects to announce new deals soon. He did not say whether that would involve buying material or acquiring ionic clay businesses.
Le Roux also said Lynas was in early-stage talks to support the development of a magnet-making supply chain in the U.S.
The U.S., Europe and their allies are racing to build supply chains to reduce their dependence on China, which accounts for some 90% of global production of rare earth products, including magnets used in the aerospace, automotive and defence industries. A one-year suspension on export controls announced by China on several medium and heavy rare earth products expires in November.
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