The Lynas Rare Earths Ltd (ASX: LYC) share price is in focus after it announced significant power supply disruptions for its Kalgoorlie rare earths processing facility.
Lynas is a miner of minerals called ‘rare earths’ which are used in a wide range of electric products such as mobile phones, electric vehicles, air conditioning and much more.
Increasing power disruptions
The company said that its Kalgoorlie rare earths processing facility is supplied with power through Western Power’s eastern goldfields load permissive scheme (ELPS). Lynas decided to go with the ELPS in 2021 because Western Power said “ELPS customers are ensured access for cleaner power in lieu of costly, emissions-intensive diesel generators”.
Lynas said that it has experienced a “significant increase in power supply disruptions” at the Kalgoorlie rare earths processing facility during 2025. The outage frequency and duration in November has been at a level that has led to “significant lost production” of mixed rare earth carbonate (MREC).
Impact on production of finished goods at Malaysian facility
The company said that its Kalgoorlie team is working hard to catch up on lost production, however this product would not reach the Malaysian facility in time to be processed to finished goods within the quarter.
Lynas said that the shortfall in MREC feedstock can’t be mitigated by increased production in Malaysia as the kilns are shut down for scheduled major maintenance.
How much production shortfall will Lynas have?
The company is working “constructively” with the WA government and Western Power to identify causes and options to improve power availability. Lynas said that this is being progressed “on an urgent basis” however, even in a best-case scenario, any improvements would not help the forecast production for this quarter.
Lynas said that “whilst the power supply remains unpredictable, it is not possible to quantify the exact production shortfall”. Although it has provided an estimated shortfall equivalent to one month of production during this quarter.
The company said that it will still produce enough finished product to meet key customer needs.
Final thoughts on the Lynas share price
Lynas said that it is urgently looking into off-grid power solutions. If the company does implement short term off-grid power, it expects that lost production can be recovered within FY26.
The market doesn’t seem too fazed with the Lynas share price slightly up. However, it is still down around 30% since the October peak.
Rare earths are an integral part of our world, with increasing demand for it through the electric products being developed. Whilst Lynas is in a position to benefit from that, it also appears to be impacted by cyclical conditions and commodity prices like other big miners.
There are other ASX growth shares that I’m interested in.
