Nikkxx Asia today. (Extract): SYDNEY -- Australian mineral...

Nikkxx Asia today. (Extract):
SYDNEY -- Australian mineral company Lynas remains "very positive" about the market for rare earths despite posting a 74% drop in half-year net profit that it blamed largely on weak prices in China.
On a call with investors on Monday, Lynas Rare Earths chief executive and managing director Amanda Lacaze said the company expected "soft demand" in China to recover, noting that the market was "quite distorted ... with dominance and market power resting in one area." “Whilst the price has been weak across the last 12 months, as we look at demand, it continues to grow," Lacaze said. "We actually see that all of the fundamental drivers for rare earths remain very positive."
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China accounts for 70% of the rare-earth supply, 85% of rare-earth processing and 90% of rare-earth magnet production. Lacaze characterized 2024 as a "transitional" year for the company. She said it retained a "strong" balance sheet and spotlighted progress on the company's growth projects, which she said would leave Lynas well positioned for the "next upturn" in prices. These included upgrades to and further exploration at its Mount Weld mine in Western Australia as well as the near completion of a cracking and leaching plant in Kalgoorlie, Western Australia, the company's first in Australia and second overall. Its processing facility in Malaysia was also upgraded to enable higher output.
Long dogged by concerns about the environmental impact of its plant in Malaysia, Lynas was given a reprieve in October when Malaysian authorities extended its license to import and process radioactive rare earths, known as lanthanide concentrates, to 2026. As part of the deal, Lynas is working on new methods to extract and reuse thorium, a weakly radioactive metallic chemical element, from its waste residues.
Lacaze said the company's experience in Malaysia had resulted in some "sleepless nights" but added that it was now on strong footing in the country. "The updated operating license provides a pathway for us to continue to not just operate but also enhance our operations in Malaysia," she said. Rare earth elements have attracted greater attention in recent years as the world moves away from fossil fuels.
While the U.S. and Australia have announced plans to reduce their reliance on China for the minerals, China's dominance of the industry makes that difficult. In December, China banned the export of some rare-earth magnet processing technologies. Backed by Japan, Lynas is the only company in the sector with supply chains outside of China. With support from the U.S. government, Lynas is planning to build a processing plant in Texas.
A contract signed in August with the Department of Defense will see the U.S. government contribute some $258 million to the project. "In the U.S., it's really starting to look like not just an aspiration but we're really on track now to get this facility constructed and operating," Lacaze said.
In its earnings report on Monday, Lynas recorded 39.5 million Australian dollars ($25.9 million) in net profit for the six months through December of 2023, a 74% drop on the year, while revenue fell 36% to AU$234.8 million.