The Lynas Rare Earths (ASX: LYC) share price continues to gain this month after a huge year in 2021. The company’s shares are currently trading at $10.44, up nearly 12% in a month.
Let’s look at what investors may have been considering recently.
Lynas is the largest Rare Earth Producer outside of China
Lynas engages in exploring, mining, and processing rare earth minerals. The company operates primarily in Australia and Malaysia. Its products include neodymium, praseodymium, and mixed heavy rare earth materials. The company also develops and operates advanced material processing and concentration plants. Lynas holds an interest in the Mount Weld project in Western Australia.
It is worth noting that Lynas is the largest producer of separated rare earth minerals outside of China. Resources produced at its Western Australian Mt Weld mine are processed offshore at its Malaysian plant. Furthermore, Lynas produces neodymium and praseodymium (NdPr), which are key elements needed to power clean energy batteries such as EVs.
Lynas share price is slipping by 6% today despite the miner announcing record sales revenue in its latest quarterly report. Thus, its share price has sunk further in afternoon trade and is currently trading at $10.44.
Let’s take a closer look at the miner’s results for the period ending December 31, 2021.
Record sales revenue for Lynas
On January 19th, Lynas released its company results for the December 2021 quarter, reporting excessive production and a record sales revenue of $202.7 million. This compares to $121.6 million in sales revenue for the same trading period in FY21.
The miner reported high consumer appetite and enthusiastic market conditions. We could anticipate that this momentum would continue into the next quarter.
NdPr was in steady demand, with the market price hitting US$100/kg in November for the first time in ten years. Production of the material reached 1,359 tonnes.
While the Chinese domestic price for NdPr was slightly higher, customers ensured supply in this current economic climate.
Furthermore, Lynas had completed its mining campaign 4-1 drilling during the quarter, and its chemical assay results are now pending.
Also, Lynas has faced coronavirus-related difficulties, although the company had risen to the challenge during the quarter. With shipping delays and disruptions doubling the transportation time on its Fremantle to Kuantan, Malaysia route, Lynas chartered a ship to ensure consistency of supply instead of using regular commercial options. Lynas will continue to combine these two shipping options in the future.
Outlook 2022 onwards
Looking forward, the company is pursuing its Lynas 2025 project. The miner is building a rare earth processing facility in Kalgoorlie, Western Australia. This will be used to process the material produced from its Mt Weld mine.
The WA Environmental Protection Authority (EPA) issued an assessment report in October regarding the project. The approval is now awaiting determination.
Lynas has also ticked off several project milestones, including the start of site recruitment and the arrival of essential equipment such as kilns, filters, and steel tanks.
The environmental regulator’s approval for its Malaysian permanent disposal facility for Water Leach Purification has also been attained.
Investors Also Asked These Questions
What are the best mining stocks to invest on ASX?
Lynas is one of the best mining stocks to invest in this year. The company produces key elements critical for the development of sustainable energy. Lynas is also strategically the only large producer outside of China.
Who are the core competitors of Lynas Rare Earths?
American Rare Earths (ASX: ARR), China Rare Earth (HKG: 0769), MP Materials (NYSE: MP)
Does Lynas pay a dividend?
No, Lynas is not paying dividends yet.
