Australian rare earths producer Lynas Rare Earths has warned that price volatility in the rare earths market is likely to persist until the Chinese economy strengthens.

At the company’s AGM on Wednesday, chairperson John Humphrey said challenging market conditions had contributed to fluctuations in the prices of key rare earth elements, including neodymium and praseodymium (NdPr).

Over the past year, the average domestic price of NdPr in China fell significantly, from $60.4/kg in June 2023 to $44.0/kg in June 2024, excluding VAT.

However, Humphrey noted some positive recent movements in NdPr prices, suggesting potential for market recovery in the months ahead.

Despite the volatility, Lynas is actively advancing several growth initiatives to position the company for future market improvements.

Humphrey said the company had made significant progress in its Malaysian operations. In October 2023, Lynas secured a key variation to its Malaysian operating licence, enabling the continuation of critical cracking and leaching operations in the country.

Additionally, Lynas is on track to produce two heavy rare earth products – dysprosium and terbium – at its Malaysian facility in 2025.

In Western Australia, Lynas reached a milestone with the successful commissioning of its new Kalgoorlie Rare Earths Processing Facility, which began production in the June 2024 quarter. The facility, a collaborative effort between the company’s Australian and Malaysian teams, processes mixed rare earth carbonate produced at Kalgoorlie, which is then shipped to Malaysia for further processing.

At the Mt Weld site, significant developments have also taken place. The company completed its exploration drilling programme and launched a new mining programme, while Stage 1 of the Mt Weld expansion project, focused on concentrate dewatering, was completed. Stage 2 of the expansion, the balance of plant, is progressing and is expected to be finished by the end of the 2025 financial year.

The updated Mt Weld mineral resource and ore reserve, released in August 2024, revealed a 92% increase in mineral resources and a 63% rise in ore reserves, which is particularly significant as it includes a major increase in contained dysprosium.

In a key move to reduce its environmental footprint, Lynas has signed contracts with Zenith Energy for the supply of power from a hybrid renewable-energy station, incorporating wind, solar, and battery storage. Once operational, this power station is expected to reduce greenhouse-gas emissions by about 60 000 t/y of CO₂-equivalent, compared to a diesel-only power station of equivalent size. In addition, Lynas has installed a rooftop solar array at Lynas Malaysia to further enhance its renewable-energy supply.