Photo by: Bloomberg
PERTH (miningweekly.com) – Rare earths miner Lynas has reported a significant drop in revenue for the three months to March 31, owing to low rare earths prices, which also hinders the miner’s plans to fund improvements at its Lynas Advanced Materials Plant (Lamp) operation, in Malaysia, through cash flows.
Sales revenue for the quarter declined from the A$49.5-million reported in the previous quarter, to A$44.5-million, despite rare earth sales volumes remaining relatively unchanged at 3 026 t.
The company said on Friday that the low market pricing continued to remain a challenge for Lynas, with its neodymium/praseodymium (NdPr) product trading at just $34/kg, which was between $10/kg and $11/kg lower than the long-term average pricing, while the cerium and lanthanum products were selling for less than $2/kg.
Despite the low prices, Lynas noted that demand for the company’s product remained high, and that it was being met from a combination of fresh production and inventory.
During the quarter under review, Lynas produced a total of 2 567 t of rare earths, which was down from the 3 166 t produced in the previous quarter.
In the three months to March, Lynas completed the commissioning and start-up of the final solvent extraction (SX) train at its Lamp project, with the company saying on Friday that the decrease in production during the quarter was reflected in the holdup of material in the SX train.
It was expected that bringing the final production capacity on line would affect all production areas from the Mt Weld concentrator, in Western Australia, to the product finishing tunnel furnaces.
Until now, there had been spare capacity in all areas that provided a buffer but, with the start-up of the fourth SX train, production rates across all areas would be required to increase by 25% on a reliable and consistent basis.
By the end of the quarter, production rates had stabilised at around 80% of capacity, and were now continuing to ramp up.
Lynas was expecting production to increase significantly during the June quarter. However, the miner warned that there would continue to be some effect on revenue from the sale of NdPr in April. However, even if product prices continued to remain low, the company expected to grow sales revenue on the back of increased production.