Lynas Shares Reverse Early Slide to Close Up 4% as Record Rare Earth Prices Drive 55% Quarterly Revenue Jump

Lynas Rare Earths Ltd shares reversed early losses to close more than 4% higher on Thursday. The company's quarterly revenue jumped 55% on record prices, although the result fell short of analyst expectations.

The stock closed at A$13.03, up 52 cents, or 4.2%, after falling as low as A$11.92 in early trade. More than 9 million shares changed hands, and the gain lifted Lynas' market value to about A$13 billion.

The swing from a loss of as much as 4.7% to a solid gain made Lynas one of the day's best performers among large ASX stocks.

Record prices lift revenue

Lynas, the largest rare earths producer outside China, reported gross sales revenue of A$310.1 million for the quarter ended Sept. 30, up from A$200.2 million a year earlier. It was the company's highest quarterly revenue since the June quarter of 2022.

The average selling price across all products rose 88% year on year to a record A$102.1 per kilogram.

The company attributed the higher prices to better market pricing, more bundled sales of light and heavy rare earths, and floor-price supply contracts that now cover more than half of its output.

Missed expectations

The result was not as strong as some investors had hoped. Revenue was 18.2% below the Visible Alpha consensus estimate of A$379 million, Reuters reported.

Sales volumes also fell. Rare earth oxide sales dropped 17.7% to 3,039 tonnes, which helps explain the early sell-off.

Key figures from the quarter:

Gross sales revenue: A$310.1 million, up 55% Average selling price: A$102.1/kg, a record, up 88% Total rare earth oxide production: 4,254 tonnes, up from 3,993 tonnes NdPr production: 2,082 tonnes Sales volume: 3,039 tonnes, down 17.7% Closing cash: about A$1.21 billion

Production rebounds

Production improved. Total output rose to 4,254 tonnes of rare earth oxide from 3,993 tonnes a year earlier, including 2,082 tonnes of neodymium-praseodymium, the key materials used in permanent magnets for electric vehicles, wind turbines and defence systems.

Lynas said its operations team had resolved ore concentrate quality problems that disrupted downstream processing in the June quarter.

Shutdowns ahead

The company flagged two planned outages that will reduce production in the current quarter.

Its Kalgoorlie processing plant in Western Australia will shut for about two weeks while Western Power upgrades the electricity network. Its Malaysian processing facility in Kuantan will close for about a month during the December quarter for scheduled maintenance.

CEO search drags on

The quarterly report comes as Lynas continues its search for a permanent chief executive.

Longtime CEO Amanda Lacaze announced her retirement in January after about 12 years in the role. Former chief operating officer Pol Le Roux has led the company on an interim basis since mid-year.

Chairman John Humphrey has previously said the company expects to name a new CEO before its annual general meeting on Nov. 25, Reuters reported.

Expansion plans

Lynas is pursuing an ambitious growth strategy, known as "Towards 2030," as Western governments try to reduce their dependence on Chinese rare earth supplies.

Earlier this month, the company agreed to acquire Meteoric Resources, giving it access to the Caldeira ionic clay rare earths project in Brazil. It is also investing in a magnet manufacturing partnership with JS Link in Malaysia and expanding its heavy rare earths capacity at Kuantan.

Lynas produced its first samarium oxide at its Malaysian plant in March, a heavy rare earth used in high-temperature magnets for defence applications.

"We have received strong customer demand and the customer qualification process is underway," Le Roux said in July when discussing samarium oxide.

Strategic metal in demand

Rare earths have become a flashpoint in global trade tensions, with China dominating mining and especially processing. Floor-price agreements, such as those covering more than half of Lynas' output, have been one way Western buyers and governments have tried to secure supply and protect producers from price swings.

Thursday's rebound suggests investors gave more weight to record pricing, a A$1.2 billion cash balance and recovering production than to the revenue miss and lower sales volumes.

The stock is still down about 14.7% over the past 12 months, reflecting how volatile rare earth equities have been despite strong prices.