Lynas Rare Earths Limited

Thank you all for standing by and welcome to the Linus Rare Earth Quarter Results Briefing. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question at that time, you'll need to press star 1 on your telephone. Please be advised that this call is being recorded today. And I'd now like to hand the conference over to Linus Rare Earth. Thank you. Please go ahead.

Good morning and welcome to the Linus Veris briefing for the December 2021 quarter. The briefing will be presented by Amanda Lacaze, CEO and Managing Director. And joining Amanda on the call today are Gauden Sturzenegger, CFO, Paul Leroux, VP Downstream, Daniel Havis, VP Strategy and Investor Relations, and Sarah Leonard, General Counsel. I'll now hand over to Amanda. Please go ahead, Amanda.

Thanks, Jen. Well, good morning, everybody, and happy new year. I am so pleased. I know how many phone lines there are that people have called in, so I know that the interest in our company continues to be high, and so I'd really like to thank you for joining in the call today. Let's hope that this is a year when we are able all to return somewhat to normal or at least where we have a more normalised approach to COVID and some of its effects on our businesses and our lives. We're looking forward to a very busy year at Linus. Unlike all those others when we had such a gentle time, No, every year is a busy year for us, but I guess that the year ahead for us is particularly exciting because we are now firmly focused on growth, growth activities and ensuring that our business is able to grow with the market at what appears to be an accelerating pace. But today is primarily about our quarter two results. I'm assuming most people on the call will have read those and certainly it's a delight to be presenting them. You will have also heard that on the call today we have Paul Leroux joining us as well as Danielle and Sarah. Paul has actually... been shouldering the load of leading the firm for the last month or so whilst I've had a little bit of time off. And so I'm pleased he's here and we'll be able to answer any questions that you might have about the market or indeed about some of our operating performance through the quarter. So in the quarter, externally, the market continued to be very kind and demand is strong across all segments in the market. Our Japanese customers' demand is growing at rates that we had not forecast to kick in quite so aggressively and quite so early. But as well as that, certainly... For us, inbound inquiry for our material from other consumers, you know, magnet buyers in particular outside of China is very strong. And that, of course, is translating to really very strong prices. As we've indicated in the report in November, the price for NDPR crossed the $100 a kilo, which is a bit of a benchmark. It's not been there since 2011. And it's certainly a great price for us to be selling our material. Internally, as always, I'm always much... more proud of the way that our people have been able to meet some of the challenges of the market. And despite continuing challenges from the pandemic, and that's both with respect to workforce and also to logistics effect, our production increased again to around the mid-1300 tonnes of NDPR. And I have to say the plant in Malaysia is running better than it ever has. And so we continue to improve our ability to deal with some of the challenges. In Malaysia, many of you will recall in the first quarter, we were looking at really high case rates in Malaysia, which translated to us really having a lot of people who were either isolating or unable to attend the workplace. Now, the case numbers in Malaysia have significantly reduced, but we've retained a number of our protective mechanisms as we manage this as an endemic rather than a pandemic in that environment. And of course, in Western Australia, as we look towards the opening of the borders in early February, we right now are progressively implementing many of the strategies that have served us very well in our Malaysian workforce. So we continue to have some effects on our workforce in Malaysia because there's still quite significant rates of infection in the community. In December, we had, I think, some of the most severe floods that we've seen in Malaysia since, certainly, I think the first year that I was there in 2014, we had a very big monsoon and widespread flooding. And that was quite significant this year. And I was just sort of going through some of the stats from that this morning. And we had about 30 of our families who were actually flooded and probably twice that number that required us to provide specific assistance through... you know, sort of through that period. And, you know, we do every year, we put buses on to help to bring people, to transport people from areas where they may have been, you know, sort of flooded or otherwise so that they can continue to work. So quite a lot of, you know, sort of challenges domestically as well as, of course, international logistics. I mean, I don't have to write a book on this. You know, there's an awful lot being written about the challenges of international logistics. But we're getting better at managing that as well. And so we're now complementing the rather less predictable sort of commercial shipping with charter shipments of concentrate from Fremantle up to Malaysia. And that certainly has provided us with better stability and the ability to continue to operate the plant at the rates that we choose. So all of these things have seen us with really a great revenue outcome and accompanying excellent margins. And our customers have confirmed to us not just qualitatively but quantitatively with confirmed purchase orders, their expectation that the demand will continue to grow strongly as we move into the 2022 calendar year. So as I said at the beginning, our focus really is about delivering on our growth project. We've given you a bit of an update. I note that people still think that there's risk for delivery of the Kalgoorlie project. Hopefully the sort of information that we're providing you, you can see that it's progressing well. It's quite exciting. I got to go to Kalgoorlie in November and it was terrific to see the site as it was then. And it's accelerated since then. We've included some photos in the quarterly report showing the kiln actually coming up to Kalgoorlie, which is quite spectacular. And I'm hoping that I will have the opportunity to be there to see it being lifted into place. So... You can see the progress which is there. Of course, we've also disclosed that the EPA has recommended the project for approval and now we're just awaiting the ministerial determination on that. In Malaysia, likewise, we've received the EIA approval for the PDF and we are working with our partner there to ensure that not only do we commence construction on time and in alignment with our licence conditions, but actually that we work as quickly as we can together to complete the project and to ensure that this particular issue is properly managed and safely managed as always for our people, our communities and the environment. And of course, All of this increase in production ultimately has to come from Mount Weld. Included some photos also of some of what we're doing in Mount Weld at present. We are continuing to invest in Mount Weld but we expect to accelerate that investment as we move forward to ensure that it can continue to feed our growing business. So all in all, it's an excellent result. You know, the team has really done an amazing job within, you know, in terms of dealing with some of the challenges that we have, but we feel that we're now in the best place that we could be as we look to growth continuing through this year which is sort of what our customers are indicating to us and we're all sort of set to ensure that we can deliver on not just today's business but also deliver the actions and the activities and the projects that are going to make us even more successful in the future. So with those as a few opening marks, I'm happy to take any questions. Also happy if when you ask them, if you want to direct them to Paul, then please feel comfortable to do so.