By Lynas Rare Earths, an Australia-listed mining company, announced a 43% decline in its annual profit as prices for rare earths decreased from their previously-recorded highs. The company recorded a net profit of 310.7 million Australian dollars ($200.0 million) for the fiscal year ending in June, compared to a profit of A$540.8 million in the same period the previous year.
Despite the decline, Lynas emphasized the strength of its performance, considering the challenging market conditions. The miner acknowledged that the decrease in profit was largely attributed to the lower market prices experienced compared to the previous year’s record highs.
The company’s management decided not to declare a dividend during this period.
Lynas has been actively expanding its operations and is in the final stages of completing a new processing facility in Kalgoorlie, Western Australia. However, the total cost of this project has increased from the initially projected A$575 million to approximately A$730 million, due to cost inflation and a compressed timeline for completion.
In addition to the higher project expenses, Lynas anticipates an extra A$50 million in pre-commissioning and commissioning costs, which will be capitalized. Nevertheless, the company is confident that it can cover these increased costs from its existing cash balance.
Lynas acknowledges that cost inflation is a common challenge for projects of this nature in Western Australia and believes that the growth of the rare earths market justifies its investment in expanding its operations.
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