Lynas Rare Earths posts profit miss after ‘painful time’

Lynas Rare Earths Ltd, the leading refiner of critical minerals outside China, experienced a profit shortfall for the full year due to rising costs and operational difficulties at its new facilities in Australia. As one of only two major global sources of rare earths outside China, Lynas and its American counterpart MP Materials Corp are investing in expansions to reduce reliance on Chinese sources.

Stronger demand for non-China material drove a 76% increase in Lynas' full-year revenue to A$977.9 million (US$717 million). However, the company faced challenges in its Western Australian operations, including variations in ore quality and downstream processing issues that were resolved after a "very painful time." Interim CEO Pol Le Roux attributed the difficulties to complexity, but expressed satisfaction with the current production performance.

Higher costs were attributed to increased fixed outlays at new facilities and more expensive inputs, notably sulfuric acid, whose prices surged due to Middle East tensions disrupting supplies. Despite these challenges, Lynas achieved a record output of neodymium-praseodymium oxide and commenced shipping refined heavy rare earths, which gained geopolitical significance when China imposed export restrictions.

Lynas is exploring options to secure more "heavies," including adjustments to its Australian mining plan and partnerships with third parties. The company's net income for the 12 months ending June 30 reached a record A$222.4 million, surpassing analyst estimates of A$263.2 million. Lynas' shares on the Sydney Stock Exchange fell by 5.9% following the earnings report, bringing this year's gain to approximately 26%.

The 2026 financial year will be the final one under former CEO Amanda Lacaze, who retired at the end of June and was succeeded by interim CEO Pol Le Roux. Lynas remains in search of a permanent successor.