Lynas revenue jumps 43% as pricing strength masks a messy quarter for output

Key highlights

• Revenue rose 43% year on year to A$201.9 million as higher realised prices did the heavy lifting.
• Average selling price jumped to A$85.60/kg, reflecting stronger benchmark pricing and more sales priced away from the market index.
• Production fell back after power disruptions in Kalgoorlie and planned maintenance in Malaysia, but the company says both issues have stabilised.
• Cash remained strong at A$1.03 billion, with the company continuing to fund growth projects and downstream expansion planning.
• LYC shares were up about 5.9% to A$16.15 in midday trade, as the market focused on pricing momentum and cash strength.
  
   

Lynas Rare Earths has delivered a familiar kind of quarterly report for commodity markets: volumes stumbled, but prices carried the day.

The rare earths producer said second quarter gross sales revenue climbed 43% to A$201.9 million, even as production eased after a quarter shaped by operational disruption across two key sites. The share market liked the direction of travel. Lynas shares were trading around A$16.15, up 5.90%, by early afternoon, with more than 3.7 million shares changing hands.

The headline is simple enough. Higher selling prices offset lower production. The detail is where the story becomes more instructive, particularly for readers trying to understand why rare earths remain one of the market’s most strategically watched corners.

Less product, better pricing

Lynas reported an average selling price of A$85.60 per kilogram across all rare earth products for the period, a step up that helped keep revenue slightly ahead of the prior quarter and well ahead of the same quarter a year earlier.

The company attributed the stronger pricing to two factors that matter in any commodity cycle.

First, benchmark pricing improved. Second, Lynas said a growing share of sales are being struck at prices independent of the market index, which can reduce the noise of day to day spot volatility and improve revenue visibility when negotiated well.

Lynas is trying to sell more product under contracts where the price is set by agreement, rather than being fully tethered to whatever the market prints that week.

What went wrong operationally, and what has changed since

While revenue held up, the production line told a different story.

Chief executive and managing director Amanda Lacaze said the December quarter NdPr production of 1,404 tonnes came in about 30% lower than the previous quarter, reflecting significant power supply disruptions in Kalgoorlie during early November and major planned maintenance in Kuantan.

“The kiln maintenance at Lynas Malaysia was completed safely and Cracking and Leaching restarted in January 2026. Kalgoorlie power has also stabilised following works undertaken by the electricity provider,” Ms Lacaze said.

She added that the company is still working on a longer-term fix: “Notwithstanding the short-term improvement, we are continuing to develop plans for an off grid solution to ensure energy stability for the Kalgoorlie Facility.”

That line is worth sitting with. Rare earths are often discussed as a strategic commodity, but the day to day risks can be decidedly unglamorous: electricity reliability, maintenance windows, and the logistics of getting feedstock and intermediate product moving between facilities without disruption.

Volumes: softer REO production, but a notable heavy rare earth lift

On the production numbers, Lynas reported total REO production of 2,382 tonnes for the quarter, down from 3,993 tonnes in the prior quarter. NdPr production was 1,404 tonnes, down from 2,003 tonnes previously.

The heavy rare earth line item stood out. DyTb production was 26 tonnes, and Lynas noted this included consumption of all work in progress carried over from the prior quarter, alongside new production during the period.

For readers new to the sector, NdPr is a key ingredient used in high-strength permanent magnets, which are critical components in electric vehicles, wind turbines, robotics and defence applications. Dysprosium and terbium can be used to improve magnet performance in high-temperature environments, which is one reason they draw attention when supply tightens.

Demand backdrop: “outside China” supply chains are still building

Lynas’ commentary also pointed to strengthening demand from strategic customers and new supply chains being developed as the “outside China” rare earth industry expands.

The company said the December quarter sales volume delivered a higher proportion of NdPr sales than in the prior quarter, enabled by stronger NdPr production in the September quarter and increased demand from customers across both existing and new supply chains.

It also flagged that market conditions are “gradually improving” and that the “positive market sentiment seen in the December quarter has continued into January 2026.”

That matters because rare earth pricing and demand are rarely just about end markets. They also reflect policy and supply chain decisions, including how manufacturers diversify away from single-country supply risks.

Lynas noted that the relaxation of China magnet export controls in the prior quarter translated to increased demand for NdPr from China magnet makers, alongside higher market prices through October to December. It added that the market effects from a more recent announcement by China of further restrictions on supply to Japan are not yet clear, and it is engaging with Japanese customers to mitigate potential negative effects.

Growth projects: Mt Weld expansion completed, HRE plans move forward

On the expansion front, Lynas said commissioning of the Mt Weld expansion project was completed during the quarter, with the new flotation circuit ramping up to 70% of nameplate.

It also highlighted progress at its Mt Weld hybrid renewable power station, where four wind turbines were commissioned. The company reported that December electricity production achieved 92% renewable content, above its targeted 70%.

Meanwhile, Lynas is progressing its heavy rare earth separation plans in Malaysia as part of its Towards 2030 growth strategy. The company said work has commenced on modifications to enable samarium production, with first production forecast for Q4 FY26, alongside detailed engineering for the full HRE separation facility.

The balance sheet: cash remains a strategic asset

Lynas ended the quarter with A$1.03 billion in cash and short-term deposits, down slightly from the prior quarter but still a substantial buffer for a capital-intensive business.

Cash receipts from customers were A$185.0 million, and cash payments for capex, exploration and development were A$45.2 million, lower than the previous quarter.

For the market, this matters because rare earths are not a set-and-forget business. Processing capability, product mix and downstream expansion require ongoing capital, and Lynas’ cash position gives it more flexibility to keep building through weaker volume quarters.

Leadership: CEO transition is now a live variable

The quarter also sits alongside a major corporate development.

Lynas reiterated that, following a January announcement, Ms Lacaze has advised the board of her intention to retire at the end of the current financial year, after 12 years in the role. She said:

“I have been privileged to lead this company for the past 12 years and believe this is the right time to make the transition. I remain fully committed to my role, to continuing to deliver value for shareholders, and working to ensure a smooth transition.”

The board has initiated a search process for a successor, considering internal and external candidates.

For any company, leadership change adds an extra layer of uncertainty. For a strategically important producer operating in a politically sensitive supply chain, the market will be watching how continuity is maintained across project execution, customer relationships and government engagement.

What to watch from here

The next quarter’s storyline looks clear.

First, whether operational stability holds, particularly at Kalgoorlie and in Malaysia’s cracking and leaching line.

Second, whether the higher realised pricing is sustained, especially the shift toward pricing structures that are less dependent on market indices.

Third, whether Lynas can keep advancing its expansion pipeline while maintaining the discipline the market expects from a A$16 billion company that is often treated as a proxy for “non-China rare earths”.