The Lynas Rare Earths Ltd (ASX: LYC) share price is under the spotlight today after revealing its quarterly report for June 2024.
Lynas mines rare earths such as neodymium and praseodymium (NdPr) which are important for producing products like electric vehicles, air conditioning, aircraft engines, smartphones as a lot more.
June 2024 quarter
The rare earth miner reported it produced 2,188 tonnes of rare earths in the FY24 fourth quarter, down from 3,545 tonnes in the third quarter. NdPr production was 1,504 tonnes in the June quarter, down from 1,724 tonnes in the March quarter.
Lynas reported that it achieved quarterly gross sales revenue of $136.6 million, up from $101.2 million in the third quarter of FY24. Sales receipts were $117.5 million, up from $107.7 million in the FY24 third quarter. This is normally a key focus for investors regarding the Lynas share price.
The company saw its cash balance finish FY24 at $523.8 million, down from $616.7 million in the FY24 third quarter. It spent $131.1 million on capital expenditure, exploration and development in the June 2024 quarter (compared to $97.7 million in the FY24 third quarter).
What happened during the quarter?
Lynas said the ramp-up of the Kalgoorlie facility continued and the first shipment of mixed rare earth carbonate (MREC) was dispatched to Malaysia.
Production volumes were low as processes were “stabilised”, but the ramp-up is “proceeding in accordance with plan”. Some “essential maintenance” was completed at Lynas Malaysia during the quarter. It’s targeting 9,000 tonnes per annum as an interim goal. It’s progressively working towards 10,500 tonnes of production per annum and this target is “on track”.
The lower sales reflect the “low average NdPr price” of US$46 per kilo. Despite a “slight improvement” in China domestic end product demand, market prices are still “low” according to the company. However, the average selling price reportedly improved through the quarter as it “managed the timing of sales”.
Progress has continued on the Mt Weld expansion project, with stage one (concentrate dewatering) construction complete – commissioning has started, which is expected to finish by the end of September 2024. Construction of stage two is now expected to be completed by the end of FY25.
Lynas Malaysia is targeting first production of two separated heavy rare earths products in the 2025 calendar year. This new process will produce separated Dysprosium (Dy) and Terbium (Tb) at Lynas Malysia for the first time and will complement its existing light rare earths product range.
Final thoughts on the Lynas share price
The Lynas share price is down more than 40% from where it was in 2022. So, I’d say it’s a better buy now than back then. However, we shouldn’t expect it to return to that valuation because it’s dependent on what happens with resource prices, which is unpredictable.
I think it could be interesting to look into Lynas further, though I’d say there are other ASX growth shares with a clearer path to success which aren’t reliant on commodity prices.
