Lynas half-year profit plunges on Malaysia expenses amid weak market
Western Australian rare earths miner Lynas Corp's half-year profit plunged nearly 80 per cent, hurt by security bond payment at its Malaysian processing facility along with operational expenses incurred for its mining activities, amid weak market conditions.
Lynas, the largest rare earths producer in the world outside China, on Friday reported profit after tax of $3.9 million for the six months ended December 31, while revenue rose slightly to $180.1 million.
Lynas’ Mount Weld mine in Western Australia, the richest known rare earths deposit in the world.Credit:Bloomberg
The company said it deposited $11.6 million with Malaysia's Atomic Energy Licensing Board for operating its $800 million plant in Kuantan.
On Thursday Malaysia approved a new three-year licence for the plant that allows Lynas to continue processing rare earths, subject to meeting several conditions the miner expects to meet.
Lynas will have to build a cracking and leaching facility outside Malaysia before July 2023 and have to develop a permanent waste disposal facility within the first year from the date of approval of the licence.
Lynas chief executive and managing director Amanda Lacaze described the result as 'solid' given the difficult regulatory and market conditions faced during the period.
For most of 2019 Lynas got unprecedented attention amid an increased focus on the sector's supply chain on concerns that China might use its dominant position in rare earths as a tool in the then festering trade war with the United States.
Lynas said the production of Neodymium and Praseodymium, used in magnets, fell more than 10 per cent for the half-year to 2512 tonnes, while Rare Earth Oxide production dropped 22 per cent to 7518 tonnes.
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