Australian mining company Lynas Rare Earths plans to ramp production back up in the coming months, after volumes fell in October-December when its Malaysia facility was temporarily off line for expansion work.
The company produced 901t of neodymium-praseodymium (NdPr) oxide in October-December, down from 1,526t the prior quarter and 1,508t in October-December 2022.
Total production of rare earth oxides (REO) reached 1,566t in October-December, down from 3,609t the prior quarter and 4,457t in October-December 2022.
The drop was the result of the temporary shutdown of Lynas' Malaysia processing facility from mid-November to carry out work to increase NdPr production capacity to around 10,500 t/yr by December 2024 — the most significant work carried out at the facility since its launch.
Lynas now expects to produce around 1,500t of REO in January-March. Total REO production for January-June is expected at 3,200-3,400t, a slight increase on the company's previous estimate. The facility is expected to reach its new production capacity of 750 t/month in the second quarter, Lynas said today.
Lynas partially offset the financial hit of the lower October-December output by selling inventory accumulated earlier in the year when there was uncertainty over its Malaysian operating licence — an issue since resolved, with an amended licence granted in October and valid until 2 March 2026. Sales totalled 3,916t of REO in October-December, up from 2,701t the prior quarter and 3,725t in October-December 2022.
But revenues took a sharp hit, sinking to A$112.5mn ($74.12mn) in October-December from A$217.5mn a year earlier — partly because of a change in Lynas' product mix including a higher amount of cerium and lanthanum-based products, and partly because of lower rare earth prices globally.
Rare earth prices came under pressure in 2023 as weak economic conditions dampened demand from all end-use industries globally. And supply has been plentiful, in part because China's rare earth mining quotas were lifted in 2023, and the resulting imbalance in the market has pulled prices for light rare earths — such as Nd and Pr — back to levels last seen in 2020.
Argus' assessment for 99.5-99.9pc neodymium oxide stands at $56.80-57.80/kg fob China, down from around $73.30/kg at the start of October-December and $118.50/kg a year ago.
The assessment for 99.5-99.9pc praseodymium oxide is currently $57.50-58.50/kg fob China, down from around $73/kg at the start of October-December and $106.50/kg a year ago.
Spot prices for Nd and Pr have flattened over the past week but it is unclear whether the market is bottoming out. Several sources said underlying demand is still sluggish and while there may be some restocking in China ahead of the lunar new year holidays, there is still potential for prices to soften further.
