Lower commodity prices have played a role in Lynas Rare Earths revenue taking a hit in the March 2024 quarter, along with news that the cost of its Kalgoorlie processing facility is set to rise.
A lower price for neodymium and praseodymium - coupled by a decision to hold NdPr and mixed heavy rare earths inventory - has played a role in Lynas Rare Earths revenue taking a hit during the March 2024 quarter.
Amanda Lacaze-led Lynas generated $101.2 million in gross sales revenue, down from $136.2 million during the December 2023 quarter.
Ms Lacaze told the market that given the low price of $US47 per kg for NdPr during the period, the Perth-based company elected to hold onto its inventory rather than sell into a lower priced marketplace, given prices have started to bounce back this month.
Despite the reduction in revenue, the company's overall production of rare earths oxides reached 3,455t in March 2024, up from 1,566t three months prior, with the overall amount including 1,724t of NdPr.
Lynas also provided an update regarding its Kalgoorlie processing facility, with the cost of the project set to rise by $70 million from its most recent cost estimate.
"Based on the continued finalisation of construction costs and the extended commissioning timeline, the updated project budget for the Kalgoorlie facility is estimated at a capital cost of approximately $800m, an increase on the previous estimate of $730m outlined in August 2023," the company said.
"This increase in expenditure will be covered from the existing cash balance and accommodated within the estimated $600m capital expenditure envelope for the 2024 financial year.
"Costs incurred during commissioning will continue to be capitalised in accordance with accounting standards until the facility achieves commercial production."
During its 2023 financial year results, Lynas told the market that project costs had blown out from the initial estimate of $585 million to $730 million, primarily due to cost inflation and contractor management.
It's also been an eventful fortnight for Lynas, following Hancock Prospecting's decision to take a 5.82 per cent stake in the company on April 17. Backed by billionaire Gina Rinehart, Hancock now has a substantial foothold in two of the world's largest rare earth producers outside of China.
Lynas last traded at $6.38 per share, down 0.31 per cent, as of 1.13pm WST.
