Lynas Rare Earths Limited

Good day, and thank you for standing by. Welcome to the Linus Red Earth's quarterly results briefing. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. I would now like to hand the call over to Linus Red Earth. Please go ahead.

Good morning and welcome to the Linus Rieris quarterly investor briefing for the quarter ending 30 June 2022. Today's briefing will be presented by Amanda Lacaze, CEO and Managing Director and joining Amanda, Garen Sturzenegger, CFO and Sarah Leonard, General Counsel and Company Secretary. I'll now hand over to Amanda. Thanks, Jane. Good morning, everybody.

I have the benefit of seeing how many people are on the call, and we've just about cracked the time again. So clearly, people are interested on a Monday morning in what's going on at MINUS. So of course, what a great year. This is the last quarter of what's been an excellent year. And as you look at the report and see the you know, sort of the evolution from the first quarter through to the fourth quarter, you can see that. About $950 million in sales. And of course, just for everybody, I want you to know that these are unordered sales results. We will put those through when we put out the full year results. But nonetheless, about $950 million in sales. And finished the year with $965 million in cash. whilst spending quite a bit of money on our growth projects through the quarter. This does set us up excellently for ongoing growth projects as we seek to ensure that we grow at a minimum with the market in the years to come. And of course, during the quarter, We had the small triumph of the US project, the award for the phase two to phase four of the HRE, funding the first heavy rare earth separation plant outside of China that has been built in many years. As the report states, we, We were a little disappointed with our production outcomes. We started the quarter really with the wind behind us and with a great deal of confidence. Water, which, pun intended, has been bubbling away in the background as an issue in Malaysia for several years, really created a lot of challenges for us this quarter. The team there has really demonstrated their very best can-do attitude as far as water is concerned. Those who have been with us for a while will remember about three or four years ago we built another processed water pond so we have the ability to have a lot of storage on site. We also have run pipes to some local sort of storage locations and we've put in water treatment solutions to ensure that we can use those in our production process. But this quarter's outages were so significant that they did actually cause us to have to shut down production on more than one occasion. The team once again though with their fabulous can-do attitude has really been looking at, and this is part of our sustainability program anyway, how can we continuously reduce the amount of water that we use so that this is no longer such a risk in the business and we are this month implementing a new change which has the objective of reducing our water consumption by about 40%. So hopefully that will give us further protection. But frankly, if there's no water coming through the pipes and there's no water coming out the sky, it can be very difficult, even with the best recycling technologies in place. Having said that, still an excellent outcome in terms of production. It was only some 90 tons less than last quarter, and last quarter was our record. And price continued to hold up despite some of the inside China market dynamics. Of course, with all mineral companies, there's a lot of discussion at present about what's going on with costs and input costs in particular. And we've not been immune to these, as you will see. Some of our costs have gone up by up to, I think one of them went up by about 70%. But on average, about 20% increase in our chemical reagents that we use in the process. and that just once again reinvigorates all of our initiatives which are targeted at improving efficient use of chemicals and the team is working on various different projects including opportunities to recycle chemicals within the process once again to ensure that we keep our muscle in terms of cost and don't just sort of get thrown around with some of those cost increases. Having said that, recently we've seen some moderation of that and so we hope that that will continue. So the growth projects, well, you know, Kalgoorlie have been there several times during the quarter. The fabulous service that is offered these days by the airlines saw me actually sleep there with half a dozen of my colleagues and another 120 of my closest friends. That was in the Kalgoorlie Airport terminal. I wouldn't really recommend it. It's not the most comfortable of places to spend an evening. It was still worth it to see our site and to see our site as it's developing. And I know that some of the people on the call today will be at Diggers and Dealers in a couple of weeks' time. We will be running bus tours. People won't be able to get off the buses on site because we've got a lot of people doing a lot of work there at present. But, gee, it's really exciting. I happened to be there once. one of the days when we were lifting one of the kiln pieces into place and that was pretty exciting. We've now got all five of them in place. The kiln's been rotated for the first time. The welding process is on foot and we have just, every time I'm there and I've been there sort of maybe only 10 days apart at different times during the quarter, I can see a difference. So we have shared, for those who won't have a chance to see it, some photos of the site so you can see just sort of how much progress is being made. The big process water tank there was pretty exciting to see that as it was constructed and lifted for each phase. So things are moving along very smartly in Kalgoorlie. And of course, as I've indicated before, the US award of the phase two to phase four for the heavy railroads is very exciting for our company. And we look forward to moving that project along. So really a very good year. We're excited to be entering the new financial year. The market continues to evidence significant growth. We're seeing accelerated uptake of many of the technologies in which rare earths are essential. including, of course, the famous electric vehicles, but also wind, automation and electronics. And as I said before, our challenge is to grow as fast as the market is growing. And you can see some of the projects that we're doing to be able to underpin our ability to continue to serve the increased demand of the customers we have today. and the firms who would like to be customers of Limus in the future. So with that, I'm very happy to take any questions.