- Lynas Rare Earths (LYC) reports a drop in sales revenue after a recent spike in COVID-19 cases in Malaysia led to a slowdown in production
- Invoiced revenue for the September quarter came to $121.6 million compared to $185.9 million in the prior quarter
- While the majority of staff are fully vaccinated, a recent outbreak resulted in an 11-day shutdown of its cracking and leaching plant
- As a result, total rare earth oxide (REO) production dropped from 3778 tonnes in the June quarter to 3166 tonnes in the September period
- Shares in Lynas Rare Earths are down 8.2 per cent to $6.83
Lynas Rare Earths (LYC) has reported a drop in sales revenue after a recent spike in COVID-19 cases in Malaysia led to a slowdown in production.
While invoiced revenue for the September quarter came to $121.6 million — the second-highest on record — it represents a significant drop compared to the prior quarter, which saw sales of $185.9 million.
Sales receipts also dropped significantly from $192 million to $92 million.
Lynas said while 99.9 per cent of its staff and 99 per cent of its contractors in Malaysia were fully vaccinated as of October 13, a recent outbreak in Kuantan resulted in its cracking and leaching plant being either partially or fully shutdown for 11 days due to isolation requirements among personnel.
That time was used to undertake major maintenance programs, while Lynas shutdown production of non-neodymium and praseodymium (NdPr) products for 16 days in order to prioritise its NdPr production.
Lynas also noted that the pandemic continued to affect logistics, with delays in outbound and inbound shipments hampering the availability of both “key production inputs” and finished product deliveries.
As a result, total rare earth oxide (REO) production dropped from 3778 tonnes in the June quarter to 3166 tonnes in the September period, while NdPr production fell from 1393 tonnes to 1255 tonnes.
“Despite these challenging conditions (mostly related to the COVID-19 situation), our close relationships with our longstanding customers allowed us to minimise any supply chain disruption,” Lynas said in an announcement this morning.
“Demand, especially in the magnet market segment, continues to be very strong and our customers expect it to further accelerate in 2022.”
Based on that demand, prices for rare earths materials remain high. The average China Domestic Price for NdPr was US$80.1 per kilogram during the September quarter, compared to US$69.9 in the prior quarter and US$40.8 a year ago.
Shares in Lynas Rare Earths were down 8.2 per cent to $6.83 at 11:58 am AEDT.