Quarterly Activities Report

• Lynas Rare Earths achieved a gross sales revenue of $141.2 million in the December quarter, up from $120.5 million in the previous quarter.
• Total rare earth oxide production was 2,617 tonnes, and NdPr production was 1,292 tonnes, both lower than planned due to issues in December.
• The company reached its annual lanthanide processing limit in Malaysia in late November, causing a reliance on mixed rare earth carbonate (MREC) from Kalgoorlie.
• Impurities in the MREC required additional treatment, which was delayed due to the unavailability of chemical inputs until December 25th.
• The average selling price improved to $49.2/kg, the highest since April 2023, due to strategic customer focus and favorable exchange rates.
• Market conditions remained challenging with low rare earth prices, and this is expected to continue into the March 2025 quarter.
• The Kalgoorlie facility was officially opened and Stage 1 of the Mt Weld Expansion Project was successfully commissioned.
• Preventative maintenance was performed on the Malaysian cracking and leaching plant during the December shutdown.
• Construction of Stage 2 of the Mt Weld Expansion Project is progressing as planned, with completion expected by the end of FY25.
• A pathway has been identified to resolve wastewater management issues at the Seadrift site in the US.

Score: 5

Explanation: The report shows mixed results with increased sales revenue but lower than planned production and ongoing challenges. The company is making progress on expansion projects, but market conditions remain challenging.

• Sales revenue increased to $141.2 million, showing strong performance despite production challenges.
• The average selling price improved to $49.2/kg, indicating a positive trend in pricing.
• The Kalgoorlie facility was officially opened, marking a significant milestone.
• Stage 1 of the Mt Weld Expansion Project was successfully commissioned and integrated into operations.
• Preventative maintenance was completed on the Malaysian plant, which should improve future output.
• Technical solutions have been identified to address MREC impurity issues, avoiding future chemical treatment.
• A pathway has been identified to resolve wastewater management issues at the Seadrift site.

• Total REO and NdPr production were lower than planned due to issues in December.
• The annual lanthanide processing limit in Malaysia was reached in late November, impacting production.
• Impurities in MREC feedstock caused production delays and required additional treatment.
• Market conditions remain challenging with low rare earth prices.
• The company experienced a kiln bearing failure in August 2024.

• Market conditions are expected to remain challenging with low rare earth prices into the March 2025 quarter.
• The company is still working to resolve wastewater management challenges at the Seadrift site.
• Production can be impacted by technical issues with new feedstocks, as seen with the MREC impurities.
• The company is dependent on the availability of chemical inputs for processing.
• The company is subject to annual processing limits in Malaysia.

Market conditions are expected to remain challenging into the March 2025 quarter due to subdued demand in China and the extended lunar new year holiday period. Stage 2 of the Mt Weld Expansion Project is expected to be completed by the end of FY25.

• The company was delighted to welcome the Australian Minister for Resources and Northern Australia to officially open the new Kalgoorlie Facility.
• The commissioning and integration of Stage 1 of the Mt Weld Expansion Project are significant milestones for the Lynas 2025 growth plan.
• The sole focus on MREC processing in December has provided valuable learnings for the team.
• Technical solutions have been identified that will not require additional chemical treatment in the future.

The report highlights the challenges faced by rare earth producers due to low market prices and fluctuating demand, particularly in China. Lynas is focusing on strategic customers and optimizing product mix to mitigate these challenges. The company's expansion projects are aimed at increasing production capacity and reducing costs, which is a common strategy in the industry.

• The average selling price of $49.2/kg is a positive sign, but it is important to compare this to other rare earth producers to see if it is competitive.
• The production of 2,617 tonnes of total REO and 1,292 tonnes of NdPr is a significant volume, but it is important to compare this to other major producers such as China Northern Rare Earth Group and MP Materials.
• The company's focus on strategic customers and optimized product mix is a common strategy in the industry to maintain profitability during periods of low prices.
• The expansion projects at Mt Weld and Kalgoorlie are similar to other companies' efforts to increase production capacity and reduce costs.
• The issues with MREC impurities highlight the challenges of processing new feedstocks, which is a common issue in the industry.

• Implement technical solutions to address MREC impurity issues.
• Continue construction of Stage 2 of the Mt Weld Expansion Project.
• Progressively commission Stage 2 circuits.
• Commence energisation of the HV switchroom and commissioning of crushing circuit and bore water treatment plant.
• Continue to work with the Department of Defense to assess the pathway to resolve wastewater management challenges at the Seadrift site.
• Deliver solar panels to the Mt Weld site.

• August 2024: First ever failure of a kiln bearing in Malaysia.
• Late November 2024: Annual lanthanide processing limit reached in Malaysia.
• 8th November 2024: The Kalgoorlie Rare Earths Processing Facility was officially opened.
• 25th December 2024: Chemical inputs required for MREC treatment became available.
• 31 December 2024: End of the reporting quarter.
• March 2025: Market conditions expected to remain challenging.
• End of FY25: Expected completion of Stage 2 of the Mt Weld Expansion Project.