Shares in Lynas Rare Earths fell 7.11% to AUD 15.41 on Tuesday after the company outlined its full-year 2026 results and operational outlook, citing higher costs and underabsorbed expenses tied to its Kalgoorlie processing ramp-up.
The Melbourne-based miner reported AUD 1.2 billion in cash at period-end and reiterated plans to raise AUD 900 million in equity capital over five years through 2030, raised around 12 months prior. Interim CEO Pol Le Roux highlighted a focus on energy-efficient motors and permanent magnets, noting Lynas as the first dysprosium and terbium supplier outside China. Operational milestones include the delivery of gadolinium and yttrium heavy rare earth separation in the first half of fiscal 2028, with increased samarium and lutetium output expected in early 2028.
Cost pressures remain a headwind. Sulfuric acid costs have climbed to roughly four times year-ago levels, while general and administrative expenses rose AUD 34 million year-over-year. Underabsorbed costs totaled AUD 23 million, primarily linked to the Kalgoorlie facility’s ramp-up, and leadership transition costs reached AUD 10 million. CFO Gaudenz Sturzenegger cautioned that the cost base remains elevated, though he indicated potential easing ahead.
Production metrics showed average throughput of about 21 tons per day in the second half, with targets approaching 25 tons daily. Best demonstrated performance at the Kuantan Light Rare Earths Processing Plant (LAMP) reached 30 to 33 tons per day, while cracking and leaching operations peaked at 31 tons daily. Lynas maintained a long-term production capacity target of 12,000 tons annually at LAMP, with a 30% raw material waste rate in magnet manufacturing noted.
Capital allocation included a AUD 50 million investment in JS Link and a commitment to spend 1% of gross revenue on thorium extraction development at LAMP through 2031, estimated at AUD 100 million. Safety performance improved, with the lost time injury rate falling 50% to 0.9 from FY 2025. The company did not provide actual earnings per share or revenue figures, though analysts had forecast EPS of AUD 0.1105 and revenue of AUD 317.24 million.
The permanent magnet technology market is expanding at an average annual rate of about 10%, driven by demand for energy-efficient motors. Lynas operates the Mount Weld mine in Western Australia and the LAMP facility in Malaysia, with a workforce transition ongoing following the departure of a senior staff member referenced during the call.
