Australia's Lynas Rare Earths has reported a sharp decline in net profit for the half-year ended December 31, 2024, as lower rare earths prices weighed on earnings, despite increased production and sales volumes.

The rare earths producer recorded a net profit after tax of $5.9-million, down from $39.5-million in the prior corresponding period. Revenue, however, increased to $254.3-million, up from $234.8-million a year earlier, as the company delivered a 22% increase in neodymium and praseodymium (NdPr) production to 2 969 t. Sales volumes for the NdPr family of products also rose by 23%.

The financial performance was impacted by weak rare earths pricing, with the average China domestic price of NdPr falling from $56/kg in December 2023 to $49/kg in December 2024. Costs also rose during the period, with the cost of sales increasing by 29% to $205.3-million, reflecting higher sales volumes and a $5-million provision against low-value inventory and work in progress. Earnings before interest, taxes, depreciation and amortisation fell from $62.6-million in the prior period to $38.1-million.

Lynas CEO and MD Amanda Lacaze remained optimistic about the company's long-term prospects, describing current challenges in the rare earths market as short-term issues. She highlighted demand growth in key sectors, proposed regulatory changes in China, and continued government support for supply chain development as potential drivers for market improvement.

“Lynas has a strong track record of operating in challenging rare earth market conditions,” said Lacaze. “Our sales team continues to focus on prioritising high-value customers and products whilst contributing to the development of markets outside China. We see the current challenges as short-term issues, and our team has the skills and competence to manage these and deliver stronger results in the future. We remain focused on growing to meet customer demand, maximising efficiencies, and delivering excellent value.”

The company continued to invest in growth and efficiency improvements during the half-year, with capital expenditure of $267-million directed towards major projects. Key milestones included the commissioning and integration of Stage 1 of the Mt Weld expansion project, the ramp-up of production at the Kalgoorlie rare earths processing facility, and the official opening of the Kalgoorlie plant.

In Malaysia, the company commissioned a new mixed rare earth carbonate receival facility, operated a new solvent extraction flowsheet, and installed new equipment in its product finishing division. Work on a new dysprosium and terbium separation circuit progressed significantly, with commissioning expected by mid-2025.

Lynas also reported an uplift in its Mt Weld mineral resource and ore reserve, extending the mine life beyond 20 years at the target production rate of 12 000 t/y of NdPr finished product. The updated resource and reserve statement follows an extensive multi-year exploration programme, which included more than 84 000 m of drilling and confirmed significant increases in mineral resources, mineral reserves, and contained heavy rare earth elements.

Lacaze said the expanded resource base and capital programme would ensure Lynas remained well-positioned to capitalise on improved market conditions when they emerged.

“We made significant progress on our major projects, which together will deliver increased capacity, efficiency, and sustainability, ensuring Lynas is well placed to benefit from improvements in market price,” she said.

Lynas ended the period with a cash balance of $308.3-million, down from $686.1-million a year earlier.