quarterly is out

QUARTERLY REPORT
FOR THE PERIOD ENDING 30 JUNE 2013
HIGHLIGHTS
? By early June 2013, Lynas achieved nameplate production capacity in the cracking and leaching units of Phase 1 of the LAMP. Subsequently, the Company has identified some clogging and premature wearing of equipment that is affecting its ability to maintain this production rate in the cracking and leaching units. A series of work programs involving equipment changes and materials handling to allow the cracking and leaching units to operate continuously at nameplate production capacity have and will continue to be implemented. None of these programs involve significant capital investments and are expected to be in place over the coming months.
? Total tonnes produced for the quarter were 144 tonnes, on an REO equivalent basis, and total tonnes shipped were 117 tonnes, on an REO equivalent basis. Several of the Company’s products have now been qualified by customers. For other customers, the qualification process remains ongoing in part due to the customer specification process timeline.
? Since the commencement of LAMP operations in November 2012, the measured emissions on site have consistently been significantly lower than the regulatory limits.
? In response to challenging Rare Earths market conditions, the Company has taken a number of steps to strengthen its position during this subdued period, and in turn, be ready to respond to improved market conditions. As previously announced, the Company has decided to optimise its production levels at the Lynas Advanced Materials Plant (LAMP) at the Phase 1 capacity level of 11,000 tonnes per annum REO until market prices recover. Subsequent to the end of the quarter, there is emerging evidence of improved supply-side discipline in China resulting in higher offer prices for Rare Earths products. The Company will continue with the commissioning of the Phase 2 expansion of the LAMP ahead of an expected start-up in Q3 2013. The subsequent ramp up of Phase 2 production will be determined by various factors, primarily being market conditions.
? In the current environment, a key focus of management is on cost savings, both operational and at the corporate level. These cost savings programs remain ongoing and have already delivered benefits through the more optimised use of Group shared services and the deferral of discretionary operating and capital expenditure. Management will continue to explore ways to further optimise the Group’s cost base and minimise its working capital requirements. Lynas remains committed to being a global leader in the supply of Rare Earths and its sustainability-based business model; one that is safe for people, safe for the environment and secure for customers.
? The Company had $125.7m of unrestricted available cash on hand as at 30 June 2013.
? The 12-month rolling Lost Time Injury Frequency Rate for Lynas’ global operations (employees and contractors) as at the end of June 2013 was 0.9.