Quarterly Activities Report

• Lynas Rare Earths reported quarterly gross sales revenue of A$136.6 million for Q4 FY24, compared to A$101.2 million in Q3 FY24 and A$157.5 million in Q4 FY23.
• Total Rare Earth Oxide (REO) production was 2,188 tonnes in Q4 FY24, down from 3,545 tonnes in Q3 FY24 and 4,475 tonnes in Q4 FY23.
• NdPr production was 1,504 tonnes in Q4 FY24, compared to 1,724 tonnes in Q3 FY24 and 1,864 tonnes in Q4 FY23.
• The Kalgoorlie facility ramp-up continued, with the first shipment of Mixed Rare Earth Carbonate (MREC) dispatched to Malaysia.
• Mining operations recommenced at Mt Weld following the signing of a 5-year mining contract with Carey Group in March 2024.
• Stage 1 of the Mt Weld Expansion Project (Concentrate Dewatering) is complete and commissioning has commenced, with completion expected by the end of September 2024.
• Construction of Stage 2 of the Mt Weld Expansion Project is expected to be completed by the end of FY25.
• Lynas Malaysia is targeting first production of separated Dysprosium (Dy) and Terbium (Tb) in CY 2025, with a new circuit designed to separate up to 1,500 tonnes of SEGH per year.
• Lynas signed contracts with Zenith Energy for a gas-firmed hybrid renewable power station at Mt Weld, aiming for approximately 70% average annual renewable energy, with installation of the wind energy component scheduled for 2026.
• The Company-wide 12-month rolling Lost Time Injury Rate was 1.04 per million hours worked, and the Total Recordable Injury Rate was 5.0 per million hours for the same period.

Score: 6

Explanation: The report presents a mixed picture. While there is progress on expansion projects and sustainability initiatives, production volumes are down, and market prices remain a concern. The company is taking steps to address these challenges, but the overall outlook is cautiously optimistic.

• The Kalgoorlie facility ramp-up is progressing according to plan.
• Mining operations have recommenced at Mt Weld.
• Mt Weld Expansion Stage 1 is complete and commissioning has commenced.
• Lynas Malaysia is targeting first production of separated Dy and Tb in CY 2025, expanding their product range.
• The company is focusing on sustainable energy solutions with the new hybrid renewable power station at Mt Weld.
• Lynas Malaysia received an award for its excellent safety and regulatory compliance.

• Total REO production decreased to 2,188 tonnes in Q4 FY24, down from 3,545 tonnes in Q3 FY24 and 4,475 tonnes in Q4 FY23.
• NdPr production decreased to 1,504 tonnes in Q4 FY24, compared to 1,724 tonnes in Q3 FY24 and 1,864 tonnes in Q4 FY23.
• Sales revenue of $136.6m and sales receipts of $117.5m for the quarter reflected the low average NdPr price (US$46/kg ex VAT) during the quarter.

• The ramp-up of the Kalgoorlie facility may face challenges in stabilizing processes and achieving desired production volumes.
• Market prices for NdPr remained low despite a slight improvement in China domestic demand.
• The Mt Weld Expansion Stage 2 completion is now expected by the end of FY25, which could impact future production targets.
• BHP's planned suspension of sulphuric acid supply from October 2024 poses a risk to the Kalgoorlie facility, requiring Lynas to finalize contingency plans.
• Delays in receiving concentrate due to disturbances to the global shipping industry and kiln maintenance shutdowns impacted downstream production.

Lynas is focused on ramping up production at the Kalgoorlie facility, completing the Mt Weld expansion, and commencing Heavy Rare Earths production in Malaysia. The company is also working on securing a stable supply of sulphuric acid for the Kalgoorlie facility and progressing its U.S. Rare Earths Processing Facility plans.

• The ramp up of the Kalgoorlie facility continued and the first shipment of Mixed Rare Earth Carbonate (MREC) was dispatched to Malaysia.
• The ramp up is proceeding in accordance with plan.
• Our average selling price improved through the quarter as we carefully managed the timing of sales, especially for Heavy Rare Earth which were quite volatile throughout the quarter.

The report highlights the challenges of low NdPr prices and the importance of managing sales timing in a volatile market. Lynas's focus on expanding its production capacity and diversifying its product range with Heavy Rare Earths aligns with the industry's need for secure and diversified supply chains. The move towards renewable energy at Mt Weld reflects a broader industry trend towards sustainability.

• It is difficult to compare Lynas's production and financial performance directly to other rare earth companies without detailed information on their specific operations and product mix.
• However, companies like MP Materials (USA) and Iluka Resources (Australia) are also investing in rare earth processing capacity, indicating a global trend towards increasing rare earth production outside of China.
• Lynas's focus on Heavy Rare Earths production in Malaysia could give it a competitive advantage, as these materials are often more difficult to source and are critical for high-tech applications.

• Shareholders may be concerned about the lower production volumes and market prices, but reassured by the progress on expansion projects and the potential for future growth.
• Employees are likely to be impacted by the ongoing ramp-up of the Kalgoorlie facility and the Mt Weld expansion, which could create new job opportunities.
• Customers can expect a more diversified product range with the addition of Heavy Rare Earths production in Malaysia.
• Suppliers will benefit from the increased activity at Mt Weld and the Kalgoorlie facility.
• Creditors will be monitoring the company's financial performance and progress on its expansion projects.

• Continue ramp-up of the Kalgoorlie facility.
• Complete commissioning of Mt Weld Expansion Stage 1.
• Advance construction of Mt Weld Expansion Stage 2.
• Finalize contingency plans for sulphuric acid supply to Kalgoorlie.
• Progress pre-construction activities for the U.S. Rare Earths Processing Facility.
• Achieve first production of separated Dy and Tb at Lynas Malaysia in CY 2025.

• March 2024: Signing of a 5-year mining contract with Carey Group.
• 27 June 2024: Announcement of Lynas Malaysia targeting first production of separated Heavy Rare Earths (HRE) products in CY 2025.
• 22 July 2024: Announcement of contracts signed with Zenith Energy for a gas-firmed hybrid renewable power station at Mt Weld.
• End of September 2024: Expected completion of Mt Weld Expansion Stage 1 (Concentrate Dewatering).
• October 2024: Planned suspension of sulphuric acid supply from BHP Nickel West.
• 27 November 2024: Lynas Annual General Meeting.
• End of FY25: Expected completion of Mt Weld Expansion Stage 2 (balance of plant).
• CY 2025: Target for first production of separated Dysprosium (Dy) and Terbium (Tb) at Lynas Malaysia.
• CY 2026: Scheduled installation of the wind energy component of the hybrid power station at Mt Weld.