Lynas Rare Earths announced plans on Wednesday to expand its global supply chain through new mining deals and the development of a processing facility in the United States. The company, which is the largest producer of rare earths outside of China, is currently in discussions with project developers of ionic clay deposits worldwide to secure additional supply.
The expansion strategy was disclosed alongside the company’s annual financial results for the year ending June 30. While Lynas reported a significant increase in net profit compared to the previous year, the figures fell short of market analyst expectations. Following the announcement, the company's shares decreased by as much as 8%.
Interim CEO Pol Le Roux stated that Lynas is in early-stage talks with various parties regarding the U.S. magnet-making facility. The company attributed its recent profit growth to record average selling prices for rare-earth oxides and strong demand for neodymium-praseodymium, a material used in magnets. However, Lynas also noted operational challenges, including ore quality issues at its Mt Weld mine in Australia and rising production costs.
The scale of this shift is reflected in the company's financial growth, with net profit rising from A$8 million last year to A$222.4 million ($159.37 million) this year. For industrial consumers, the average selling price for materials rose 59% to A$80.7 per kilogram (approximately $57.83). While these costs are borne by large manufacturers, they influence the pricing of high-tech goods and military equipment. The company reported that floor price agreements with Japanese and U.S. customers have been implemented to manage market price volatility.
In the near term, the rare-earths market faces a potential shift as a one-year suspension on Chinese export controls for certain medium and heavy rare-earth products is set to expire in November. A person familiar with the industry would monitor these developments as they could impact the availability and cost of raw materials for magnet production. Lynas has not yet specified whether its new deals will involve purchasing raw materials or acquiring other businesses, and the search for a permanent CEO continues following the retirement of Amanda Lacaze.