Lynas shares tumble as technical issues drag on output
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The news: Rare earths producer Lynas has reported improved revenue in the December quarter despite facing technical issues at its newly-opened processing facility at Kalgoorlie.
The numbers: The company recorded sales revenue of $141.2 million, up from $136.2 million a year ago. Production was 2,617 tonnes of rare earth oxide, and 1,292 tonnes of neodymium and praseodymium (NdPr), both slightly lower from the preceding quarter.
Lynas shares were down 5.5% to $6.70 in early trading on the ASX.
The context: Lynas said December quarter production was lower than planned due to technical issues with impurities in the mixed rare earth carbonate (MREC) feedstock that required additional treatment at its Kalgoorlie plant that was inaugurated in November.
Preventative 10-year maintenance works were also undertaken while Malaysia’s cracking and leaching facilities were shut down in December.
The group expects challenging market conditions from the December quarter to continue in the current quarter amid continuing subdued inside-China demand and the extended lunar new year holiday period. While there was a small improvement in the NdPr market price at the start of the second quarter, pricing returned to prior quarter pricing levels in December, it said.
The company is investing in the Mount Weld expansion projects in Western Australia, and is also working on the planned US rare earths processing facility.
The source: ASX announcement
