Australia’s Lynas posts over 90% fall in annual profit; to raise A$750 million

AUSTRALIA’S Lynas Rare Earths warned of considerable uncertainty over the future of its heavy rare-earths processing plant in Texas and also reported a steeper-than-expected drop in its annual profit on Thursday (Aug 28).

Lynas, the world’s largest rare-earths producer outside China, said it is in negotiations with the US Department of Defence to reach a mutually acceptable offtake agreement for production from the Texas-based Seadrift facility.

“While there can be no certainty that offtake agreements will be agreed, any offtake agreements would need to be on commercial terms acceptable to Lynas,” the miner said.

Lynas has been developing the facility under a contract with the Department of Defence, with plans to begin operations in fiscal 2026. However, the company indicated that construction of the plant may not move forward.

The company’s net profit after tax came in at A$8 million (S$6.7 million) for the year ended June 30, a sharp decline from an A$84.5 million reported a year earlier.

The annual figure also missed the Visible Alpha consensus estimate of A$30.4 million.

Lynas attributed the drop in profit to depreciation costs from its Kalgoorlie and Mt Weld facility expansion, noting that production at Kalgoorlie fell short of nameplate capacity.

It expects its fiscal 2026 capital expenditure to be around A$160 million.

Separately, the miner announced a A$750 million equity raising to “pursue new growth opportunities”.

The capital raise will see new shares issued at a price of A$13.25 apiece, representing a discount of 10 per cent to its last close on Aug 27.

Shares of Lynas were placed on a trading halt earlier in the day ahead of the announcement of its annual results and the upcoming equity raising. REUTERS