Lynas Rare Earths Limited

Good day and thank you for standing by. Welcome to Linus Rare Earth's quarterly results investor 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 need to press star 11 on your telephone. You'll then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to turn the call over to Linus Rare Earth. Thank you. Please go ahead.

Good morning and welcome to the Linus Rieris investor briefing for the quarter ending 30 June 2023. Today's briefing will be presented by Amanda Lacaze, CEO and Managing Director, and joining Amanda are Gauden Sturzenegger, CFO, Paul Leroux, COO, Daniel Havas, VP Strategy and Investor Relations, and Sarah Leonard, General Counsel and Company Secretary. I'll now hand over to Amanda. Please go ahead, Amanda.

Thanks, Jen. Good morning, everybody. So fourth quarter results, which of course means the end of the year. Really pleased that even accommodating for our significant investment in growth that we have finished the year with just over a billion dollars still sitting in cash, which means that our continued growth plans are very secure. So just turning to the quarterly itself, despite really a much lower market price, I think this is a really excellent result driven by our record operational performance. And as we look at that, we really can see the value of the line of incumbency in this market and the fact that we have facilities which are in place and which are operating really well. very efficiently. So just turning to production to start with, 1,864 tonnes for the quarter is a record, it's our second record in a row as we look at this financial year which has just passed. In the first six months production was significantly lower as a result of external disruptions to our ability to operate, most specifically the average caused by the lack of water in Malaysia. The second six months of the year shows what we can do when we're not troubled by some of those external factors. And it really was an excellent performance at the LAMP. but also well worth recognising that at Mount Weld we also broke records in terms of concentrate production with sufficient produced to feed the record production in Malaysia and also to accumulate inventory of concentrate ahead of the start up of our Kalgoorlie facility. The record production outcomes means that we have been able to secure supply for our major customers ahead of any of the transition challenges that we've covered previously if and when we are required to move from a sole cracking and leaching facility in Malaysia to operating our cracking and leaching facility in Kalgoorlie. As we look at market conditions and the market prices, we have made a choice that we will now hold additional inventory once again as safety stock on that, but also because today with the price where it is, we feel that it's prudent that we hold that inventory for what we believe will be an inevitable uptick in the market as economic conditions, particularly inside China, improve. Major projects are operating on each of our sites. I think we always spend quite a lot of time thinking about Kaohsiung, of course, because it's such a substantial new facility, but we do have major projects construction activity occurring on each site. At Kalgoorlie we are very busy. I was there just over a week ago and we still have a lot of people on site finalising all the last parts of the plant ahead of our first production. In Mount Weld we've really broken the back of all of the major earthworks and had some really substantial process as far as our early cement pours and we're actually seeing that expansion starting to take shape on the footprint. Once again, I was out there just a week or so ago and looking at the site is really very exciting. We've been operating with a very small facility now for a decade, but this is really a significant step up in terms of our processing capability as we move forward. In Kwantung, we often don't really reflect on the scope of the work which is being done as part of the introduction of mixed rare earth carbonate as a feedstock in addition to the lanthanide concentrate that we feed to Kwantung at present. And that receivable facility, we have taken the opportunity to also includes some operating enhancements to continue to improve efficiency of the Kwantung site as we move forward, because as we see with the current price scenario, we need to be able to be successful even when the price is lower. and that's included some enhancements around things like soda ash loading and unloading as well as a sulfate removal circuit as well as a new initial solvent extraction circuit which is going to allow us to continue to drive improvements in site operations. And then finally everyone will have seen from today's report that We have named the site that we have purchased in Seadrift, Texas. It's in Calhoun County, not far from Victoria. I visited the site some time back. It was previously part of the close by Dow site. and as neighbours they will be, we believe, excellent neighbours. They've already shown themselves to be very welcoming and there are opportunities for us to enhance operation of that site as it's constructed, utilising some shared capabilities with our neighbours. It would not be proper to not reflect on the fact that we're very disappointed that we've had three lost time injuries during the quarter, one each at Mount Wells, Kalgoorlie and Kwantan. And we really are taking the opportunity to pursue very clearly initiatives on each site to remind our people that safety must always be prioritised over any of the other deadlines or production outcomes that we're driving to achieve. I'm sure that many would like me to make some comments about the licensing situation in Malaysia as well. Of course, during the quarter, We received the six-month variation to our existing licence, which sees us able to continue to import and process lanthanide concentrate through to the end of this calendar year. You would have also seen that last week we lodged our application for judicial review of the two appeals that we had lodged with the Mosty Minister. and which were heard in April. We believe that these are very strong and we're pleased that Malaysia offers excellent processes to get proper reviews of these types of decisions and so we're commencing that process now. But alongside that, and I think much more importantly, we're spending a lot of time aligned with various departments within the government and various leaders within the government to really look at the opportunity to focus on industry development in Malaysia. The development of industries which are based upon rare earths, materials is something that is well recognized as value adding for an economy in, well, of course, China, but Japan, the US, Australia, the EU. And I think that Malaysia and many in Malaysia who may not have put their minds to this so much previously, really now understand what this opportunity is for Malaysia and the unique opportunity that having the Linus processing plant represents. So really focusing on opportunities to enhance the Malaysian economy development as far as RERA is concerned is as important for us as the fact that we have launched those judicial review proceedings last week. So with those as starting comments, I'm very open, of course, once again, to questions. Just key points. The most important, I think, is really the operational performance. Record production levels at both of our current operating sites gives us great confidence as we look to the future in a market that we believe will continue to grow and will continue to grow not just in terms of demand but also in terms of value. So happy to take questions. All my colleagues, Gaddens and Danielle and Sarah and Paul are also happy to take questions.

Thank you. We will now begin the question and answer session. To ask questions on the phone, please press star 11 and wait for an AMDB announce. If you'd like to cancel requests, you can press star 11 again. Please stand by while the questions are being collected. The first question comes from the line of David Dettelbaum from Colwyn. Please go ahead.

Good morning, Amanda and team. Thanks for taking the questions this morning.

Hi, David.

Hi there. I just wanted to follow up on some of your prepared comments about stocking inventory. It seems like there's a combination of factors at work here, one just being maybe the timeliness of a weak market that you anticipate getting better, but just Two, I'm just curious what your expectation would be, I guess, in the ensuing quarters. Any guidance you can give on how much sales would be impacted relative to where you were in this fourth quarter as you start stocking inventory to sort of maintain volumes for key customers?

Yeah, it's going to be, it will be noticeable but not really significant. I mean, our key customers continue to have demand, which is, you know, amongst our really sort of key customers, it's at least 75% to 80% of what we produce. And we will continue to do that, but where we might, in other circumstances, actually allow some inventory build within the various, you know, sort of supply pipelines We feel that it's prudent at this stage to hold those within our own facilities rather than have them sitting in the pipeline.

That makes sense. As my follow-up, I was hoping that you could talk a little bit about just the Kalgoorlie commissioning process and the timeline there, recognizing, of course, that you're at some final stages, I guess, in finishing construction there. And you did say that this was sort of part of one of the considerations or paths of timelines that you're looking at. So I guess, how are you thinking about that progression towards getting to where you want the facility to be going into this next fiscal year?

So I think everybody knows that we always had very challenging timelines on Kalgoorlie, which were quite arbitrary, really, based upon some of those licence conditions which were set previously in Malaysia. And our focus has been on ensuring that we have the productive capability even if we don't have every last bit, you know, like at new buildings and those sorts of things finalised. And we're in a good place as far as that's concerned now. We only have one critical path element left on the project and that's the waste gas treatment plant. I think 99% complete on structural and mechanical and we're in the piping and electrical phases of that project now. Because that sits as a separate plant within the area, we are able to complete our commissioning on all other parts of the plant, but we do need that plant finalised before we can start the heat-up cycle on the kiln. And we expect that to be within weeks, but we certainly... you know, as we said, we're continuing along this path, but as well as that, we need to make sure that we're not putting our people at risk by having too many people working in too small an area, which is basically our comment about, you know, sort of work front availability.

Thanks, Amanda. I appreciate the answers today.

Terrific. Thanks, David.

Thank you for the questions. One moment for the next question. Next from the line, we have Tim Ariasinghe from UBS. Please go ahead.

Thanks, Amanda and Tim, and congrats on the strong operational result. Just a question maybe following up on David in terms of the inventory. So am I right to assume then that we can expect inventory to continue to build while the NDPR or the rare earth price complex is depressed? And maybe if you could just help us with any other considerations like how much capacity you have available to build in maybe relative terms. And, yeah, anything on that?

Sure, sure. So as I said, you know, we have contracted volumes within a number of our key customers, which, you know, we will need to continue to serve through this period of time. And with many of those, we have a pricing adjustment mechanism, which means that if the price does go up, even if we have material sitting in the pipeline, we will be able to adjust for that price. But then we always have had a proportion which is sitting at around about 20 to maybe 25% of what we produce, which is available for sale, not into the spot market, but we have more demand from you know, non or customers who are contracted but not at assured volumes, then we actually, you know, sort of supply on an ongoing basis. And we will, as I said, we've made a choice that with some of that, we will not supply at the lower prices, but we will hold that material until the price starts to improve.

Yep. Thanks. That makes sense. I guess then, just a follow-up question, then I'll maybe rejoin the line. But it sounds like, you know, I sincerely hope it is a question of when, not if, but maybe could you help us in terms of, like, when you think prices could pick up again? Like, is it the H2 production quota? Maybe help interpreting the tea leaves, please.

Oh, yeah. Well, we all... have our inside liners. I don't think any of us have ever had consistent winning bets on what's going to happen with the price of rare earths. Having said that, yes, I think that there's much written about the softness inside the Chinese economy and we do believe that that will pick up and there will be additional stimulus into that economy. see that the softness actually is different across different segments of the market. So we still see the primary driver of growth in electric and hybrid vehicles continues inside China as well as outside. But some of the other applications which can be a little more optional, the rate at which they grow. So things like, yes, there's been a bit of slowing of use in the wind turbine segment and in things like industrial automation or in China, home applications like new air conditioners and those sorts of things. Really, I think that that's going to, as some of those conditions pick up, particularly inside China, we'll see the market price start to pick up. And yes, I think also what happens with the second half production quota will also affect confidence levels in the inside China market.

Okay, cool. Thanks, that's thorough.

I just wish I could give you a crystal ball forecast which was correct but I can't and I think that what our position on this has always been is that the long-term settings of the market remain really very positive and that We need to be in a position where we can be successful if the market price is low, and we can be very successful if the market price is high.

Understood. Thanks.

Thank you.

Thank you for the questions. Next question comes from July, or Paul Young from Goldman Sachs. Please go ahead.

Morning Amanda and team, I hope you're well. Amanda, great to see record production from LAMP and also Mount World. A question first of all on LAMP, producing a run rate of 7,500 tonnes per annum in the quarter. Have you tested, I'm just curious about what you think the current capacity actually is, have you tested all the bottlenecks in the refinery and I guess from a long-term perspective, where do you think you'll take rated capacity to on LAMP as well?

Oh, yeah, so, look, I think that it's... I'm happy for Paul to respond to this as well, and since he's in France and he's got up at 2 o'clock in the morning, I should probably give him a chance to talk to make it worthwhile getting up. But I've got to say, you know, that looking at what the team is able to achieve, and we did still have some downtime for... various pieces of maintenance during the quarter. So I think that we see that we've got a little bit more that we can achieve out of this. How far we take production at the LAMP, of course, is going to be dependent upon further discussions with the Malaysian government with respect to the licence conditions. to step up production by, you know, we've got an industrial plan for the site, which we have put on hold at this stage as we await some of the decisions on the licence. But certainly we're able to step up production initially by 50% and then by 100% for relatively low cost at the LAMP. given that we have the facility to operate the whole of the plant. But why don't I invite Paul to make some comments because it's his team that's delivered this outstanding result.

Paul, are you there? Okay.

Maybe the alarm didn't go off. Go ahead.

No, he's there. I know. You spoke before. He's there.

Thanks, Paul. Thank you for the questions. One moment for the next question.

Yeah, go ahead. Oh, sorry. I'm still here. Thank you. Sorry. I thought Paul was going to speak. Amanda, he might have some technical difficulties. So can I just move on to Mel Weld and the record production there? And I think your rating capacity is... you know, on an all-triple basis is 240,000 tonne per annum. That's an environmental licence. I think you generally produce, give or take, you know, 60,000 tonnes of concentrate per annum, so 15 a quarter. Just to put it in perspective, you know, what does record production mean from our world? Does it mean 20,000, 25,000 tonnes of concentrate in the quarter?

Look, actually, Paul, I'll need to get... Daniel to come back and actually confirm those numbers for you because I just want to be sure we're talking apples and oranges because we tend to think about this just on a contained tonne basis, an REO contained basis rather than a total throughput. I'll just get him to come back and do that. Suffice to say that the objective is to make sure that each of our supply stages is aligned. Your point, Paul, which is can we get it some even further incremental improvements in the lab, we are focused in the same way at Mountwell to continue to get incremental improvements there. And as we're doing the work on the expansion, we have prioritised the areas where we will be able to improve melt weld operations. So the current bottleneck is the dewatering circuit, and that will be the first part of the expansion that comes on board. So we won't be able to make the jump from the equivalent 600 tonnes to 1,000 tonnes of NDPR per quarter. in one go, but we will get some steps up as we actually release some of the bottlenecks.

Yeah, okay. That's great. Obviously, it gives you the flexibility, Amanda, if Mount Weld's running well, but I'll chase Daniel on that data. Just last question on this round. Back on Kalgoorlie and the commissioning there, you're commissioning the back end of the circuit on the the mixed rare earth carbonate, sorry, or concentrate from LAMP, that's good. But just on the front end of the circuit being the kiln, and you mentioned about that commissioning the kiln in September with the waste gas circuit being completed. With respect to the kiln commissioning, do I infer that, yes, you're pushing through first high-grade direct, high-grade or malware concentrate through the kiln in September? I'm just curious about your experiences running the kilns in Malaysia and commissioning there. What sort of typical sort of process or timeframe did it take to sort of commission the kilns there and ramp them up?

Yeah, so it's an interesting comparison, but not all that useful. I mean, it's useful. In fact, we've brought the team down who've already done this. We've got quite a lot of our Malaysian team either already on site or going to be there shortly. But when we think about the heat up cycle for the kiln in Kalgoorlie, it's much shorter than the initial heat up cycle a decade ago in Kwantan. It is more like we see with the way that the plant's been designed, it is more akin to if we take our kilns down, say for major maintenance or something like that, and they go completely cold in Malaysia, then the heat up cycle that we get after we bring them back up is going to be more like the heat up cycle here. And we're estimating that at some point, less than a couple of weeks where I think the initial heat up cycle in Malaysia took longer than that but remember there was four separate kilns and we certainly had issues there with specification of materials on that front end which have been addressed at Kalgoorlie Okay, alright Amanda thanks very much, I'll leave it there

Thanks, Paul. For the questions, one moment for the next questions. Next on the line, we have Regan Burrows from Bell Porter. Please go ahead.

Yeah, thank you. Good morning, Amanda and Tim. Congratulations on the good result there. Just perhaps leading on from Paul's question before, just so we get the timing right. So just in terms of the mixed rare earth carbonate production now sort of targeting September, Just in terms of final production out of the end of the plant, I think last time we spoke, you said roughly two weeks to get it up to Malaysia and then another couple of weeks to flow through LAMP. So are we thinking October, November production coming through?

We certainly think that it's going to be within this half year. I think that the speed with which it comes out the other end comes down to the speed of the ramp up. And as I think I've said to everybody here previously, ramp up trajectory is inherently unpredictable. We have a number of scenarios under some of them, you know, we ramp up really quickly and efficiently and under others, we find ourselves with some challenges to deal with along the way. One way or another, we expect we will be getting first production at the other end in the second quarter of this year.

Great. Okay. That's good. And sorry to sort of go back to this question, but just in terms of the sort of preferential, in terms of the stockpiling, are you sort of preferentially stockpiling more NDPR, or is it other areas? Is there anything, I guess, you can give us in terms of the breakdown of that stockpiling?

Sure. It's NDPR and ECG, which is the heaviest compound. So the lanthanum and cerium, we will continue, and despite significant oversupply in China, we're pleased that lanthanum and cerium demand for our materials, particularly our you know, sort of higher grade materials has remained very strong. But we always have plenty of lansin and mincerium and it's really the NDPR and the SEG that will hold.

Yep, yep. And that's probably going to be roughly 10% a quarter if you sort of take the numbers going forward. Maybe a little bit more, yeah. Okay, cool. And just finally, if I could just squeeze one in just on capex um obviously capex picked up a little bit this quarter um just in terms of your overall guided sort of expenditure from that world and and kaguli i assume kaguli is mainly done and it's just now focusing on that world just thinking i guess how you're you're approaching the remaining cash balance after you've completed the expansion of that world and those adjustments to to lamp um you've got a fairly Fairly robust cash balance there, just sort of thinking about the strategy from how to best deploy that.

Sure. But we still have quite a lot of construction ahead of us as part of the growth plan. But yeah, so this year's cash is pretty much almost exactly in line with sort of the guidance that we provided last year on growth. on CAPEX and it was for about $1.2 billion over the financial year just finished and the financial year ahead of us and we haven't varied that. There can sometimes be a bit of movement between different projects and certainly we won't know the final cost of Kalgoorlie until we've All the variations, I think everyone on this call understands that that's part of projects. But the other thing is, you know, so we'll sort of see that. So we get some pluses and minuses across, you know, sort of across it. But the envelope that we've indicated, which is the $1.2 billion in capital over the two-year period remains current. We'll update that if we see that there's any significant change.

Great. I'll leave it there. Congratulations and we'll speak to you soon.

Thanks.

Thank you for the questions. Our next question comes from the line of Rach Spencer from Cantercourt. Please go ahead.

Thank you. Good morning, Amanda. I've had some connection issues, so these questions may have been asked already, but I was wondering whether you could provide some comments on what you expect the Kalgoorlie ramp-up profile to look like relative to your concentrate production from Mount Weld. And again, apologies if this has already been asked already.

So I'm not quite sure I understand the question. However, I think that the short answer is we won't have any destruction to the ramp up schedule at Kalgoorlie based upon supply of corn. So at Mount Weld, we have built a significant supply of corn. We've done a first test that will now be moving that material in retainers. We've sent a container to Kalgoorlie and back and sort of tested it, tested its flowability and all of those sorts of things. So Mount World have built the stock which is required to ensure that we have no disruption to the Calvary ramp up from availability of raw material. The other thing which is sort of pretty exciting is that our silos are various of the raw materials required for start-ups. had now got product in them. So we've received and are storing the various different reagents and other chemicals used in the process. So that's another part of the commissioning, of course, but making sure that we've got that material on site. And as people would have seen, even with the fact that we've had to implement an LPG gas solution ahead of resolving some pipeline gas issues, we've got the first spill of that occurred as well. So the site is progressively very well prepared for this final commissioning and start-up, but we remain We remain cautious in making any statements about it because any ramp-up is inherently unpredictable.

Okay, great, thanks. I guess my question was really more about where you would target capacity utilisation relative to your concentrate production from Mount Royal, noting that that expansion there's still got a little bit of time to go. But I take your point, Amanda, thanks for that. Maybe I'll follow up offline. My second question relates to rare earth market outlook. I think this is the first time you guys hadn't made mention of strong apparent demand in your quarterly for some time. While I note your earlier comments there about the longer term outlook, is there anything you can help us with on the short term outlook? Production quotas have increased earlier this year by a lot. We're expecting the Chinese to announce something more in August, perhaps, in relation to potential further quota increases. You mentioned in your report the demand for magnets. Is there anything that yourself or Paul can help us with, say, in the next 12-month outlook to give us some comfort around where we might expect pricing to go?

So we tried to get Paul to speak before and seemed to have troubles connecting. I'll try to give him another chance, but essentially, Reg, we're seeing demand is different by application. So electric and hybrid vehicle demand continues to be strong. But we're seeing a bit much softer with some delays on projects and things like in the wind segment and also in household applications. For example, things like new air conditioners and those sorts of things in China. But I don't know, Paul, are you back on, are we able to hear you?

Yeah, I'm online. I don't know if you can hear me.

We can now.

Thanks, Paul. I don't have it anyway. The two factors is basically the production quotas of China will be released probably this coming month. And I would say again in terms of demand, China, if the real estate industry recovers in China, then because this is the weakest segment, market segment, then the demand will be back on. So that are the two factors to look at, the general economic situation of China which drives real estate and the production quotas.

Okay, I'll cheekily ask one last quick little question. Paul, would you expect China to deliver another production quota increase, and where does that sit relative to what we might think capacity utilization to be in China?

I can't answer that. Okay, no problem.

No, all right. Thanks, Paul. Thanks, Amanda.

And whilst we've got you, Paul, because the earlier question about Paul's question about how much more do we think we can get out of the lab than, you know, sort of our current performance?

This is an interesting question. So provided we have clarity, of course, with the regulators in Malaysia, I think we have, of course, studied a lot on the industrial plan for land. And I would say that overall land site structure is fit for twice more production than what we have today. So that, of course, with investments, but the bottlenecking kinds of investments could double the production in Quentin if we wish to. After that, we talk about a new site. There's different stories and different economics, but that's the potential.

Okay, thank you.

Thank you for the questions. One moment for the next questions. Next on the line, we have the line for Al Harvey from JP Morgan. Please go ahead with your questions.

Good morning, Amanda. Just wanting to get a little bit better understanding of that ramp up and the sequencing between Calc coming online and Malaysia taking the product. So I guess you got to switch things off, the cracking and leaching off in 2024. I know you're not providing guidance just given, you know, difficulties ramping projects up, but you have talked about some scenarios there. So just trying to get a sense of the range of outcomes around the ramp-up. So, you know, is it likely that we see, you know, things ramp up at Kalgoorlie from September? That kind of gets you up to 50% capacity that can then feed into Malaysia, or are you expecting it to be much faster or less fast? Just really trying to get a sense of what happens into calendar year 2024.

Well, yeah, Al, it is difficult. I think that as we look at our various scenarios, we can see ourselves with the potential for at least still a couple of months where we would have lower production. you know, so let's say a quarter of lower production, where previously when we were looking at, you know, sort of the 30 June deadline, we were looking at a quarter of no production. So that would be the difference that that additional time in Malaysia has given us.

Great, thank you. And maybe if you could just expand a bit on next key milestones for the US facility? Are you going to get a study or anything like that on the program? Just wanted to know what to look out for.

Sorry, you just broke up. Are you going to get what?

Sorry, so for the Texas facility, just wanting to understand the next key milestones there. Will we get a study or, yeah, what should we look out for there?

Yes, we will have a more detailed study. Our team is actually working on that at present and we will be able to provide additional information. But as I've indicated previously, we are constructing this plant in partnership with the US government and so together We certainly have to accommodate their view on what we disclose and at what times, but we will have a completed study which looks to all of the activities that need to be completed on that site in the relatively near future.

Great. And just finally, you mentioned in the downstream part of the release, low hydrochloric acid availability for cerium and lanthanum production. You did say that demand had been pretty resilient for that product. So I just wanted to get an understanding of if that low availability has been resolved and if that can kind of help you backfill some cash flows in the near term.

Yeah, we're in a much better position as far as supply is concerned. In terms of its effect on cash flow outcomes, it's relatively moderate. It's improving as we're bringing even more higher spec materials to market, but it still remains that cerium and lanthanum materials are in oversupply. And so therefore, you know, sort of the pricing for those remains pretty low. So it helps, but it won't make the difference compared to the material that we'll be choosing to hold as inventory on NDPR and ECG.

Yeah, sure. Makes sense. Thanks, Amanda.

Thank you.

Thank you for the questions. One moment for the next questions. Pull-up questions from the line of Paul Young of Goldman Sachs. Please go ahead.

Yeah, hi, Amanda. I've got a follow-up question on the downstream or refining capacity. I'm just trying to square that away. Considering we have the CAPEX, you know, guided on Cal and Mount World, we don't have the CAPEX estimate for the expansion from, you know, 7,000 tonnes to 12,000, 12,500 tonnes of NDPR. Paul just mentioned that you've got, you know, installed sort of utilities and a good footprint at LAMP. So it's a very low cost Branfields expansion there, I presume. And the US, you've bettered down the site location, but still studying, you know, I presume the size of that refinery. So how do we think about, you know, what the, well, first of all, what the size of US refinery is, is it still 5,000 tonnes of total reverse? And, you know, where will you expand and what's the capex associated with the refinery piece?

Okay, so if we take the first in Kwantung, the capital that we expend in Kwantung is wholly dependent upon the resolution of discussions related to our licence. And so as Paul indicated, we have developed a plan and it is orders of magnitude lower cost than anything else that we could invest in. And certainly within the $1.2 billion guidance that we've provided, we have some of that capacity up plan, about 50% of that capacity up plan is included within that number. So that gives you a sense really for how efficient any increase in capacity in the LAMP is. But the decisions on what we invest and how we invest it in the LAMP will not be finalised until we have some of the current licence discussions that we're having complete. With respect to the US, we've got two components to that plan. One is the heavy rare earth separation facility and the other is the light. and together we expect that that's about 8,000 tonnes of separation capability and we will, as I said, be providing some final work on that. The team's been working very diligently with our local engineering partner on updating all of our forecast costs in those areas and also ensuring that we've got those costs fit for purpose with the site which has now been acquired.

Thanks, Amanda. That's great context and info. Just back on LAMP, as far as if you do decide to expand LAMP to whatever the number is, how long will it take to do engineering studies and how long will it actually take to to complete that expansion, i.e., if you pulled the trigger, say, let's just say, for example, you get an extension in Malaysia, hypothetically, to run the cracking and leaching beyond 1st of January, and you do decide to commit to expanding LAMP, would it be ready in time to take the expanded material from our world, by, say, middle of 2025 calendar year?

We would expect it to be... it will precede the completion of the Mount Weld upgrade.

Great.

Again, thanks, Amanda. That's great. Thank you for the questions. We also have another question, full-up questions from Dim Aryasinghe from UBS. Please go ahead.

Thanks, Amanda. Just one more on costs. I know you haven't guided too much on this, but like how... Can you give us a relative guide on how the cost base increases? You know, just assuming, like, so you've got the Aptide in, you've got CalOnline, like, how that potentially changes the cost base given where the NDPR price is. I think it's pretty just pertinent to revisit what you've said about this.

Sure. What can I say? Australia is a more expensive place to do business than Malaysia. Gosh, that's a significant insight for all the analysts on the call, isn't it? So there are elements for operations in Kalgoorlie which clearly are challenging for us. But having said that, we also see opportunities for us to be able to improve efficiencies on a number of the cost elements in Kalgoorlie. I think under our new scenario with our three sites that it will take us some time to really optimize the efficiency across the three sites and then when we have the fourth come online at US that will be another challenge. Landside logistics is probably the most significant sort of difference that we're talking about because a lot of the cost disadvantage at Kalgoorlie we've engineered out by engineering sort of scale into the facility and I think everyone would know that when you've got sort of extra scale you do get sort of cost improvement So, yeah, we do have some cost challenges, but certainly, as this result shows, we are able still to be successful even when the price is not at those very attractive levels that it was a year ago.

Yeah.

Cool. Okay. Thank you.

Thank you for the questions. We have another follow-up question from Reagan Boros from Bells Porter. Please go ahead.

Thank you. Yeah, apologies for the follow-up question. But now that we've got Paul on the line, just potentially following up from Reg's question on production quotas earlier, just trying to get my head around, I guess, the internal production in China. I think, Paul, you've mentioned previously where they're operating in terms of the cost curve. Do you take a view on, I guess, are the internal producers within China, are some of them coming under pressure at these levels? And where is the cost curve currently?

Well, the cost curve, the competitiveness of Chinese producers vary from one to another. So it would take too much time for me to comment on each of them. Again, it wouldn't make so much sense that I discuss my guess about the production quotas. I haven't been to China for a while, but my team has. I think what is important to understand is that Chinese are very confident on the demand increase. They are all investing in additional capacities, and you have to give them this. They are not stupid people, and they love money, so they don't spend money for the pleasure of spending it. So that means that, yes, we are going through a weak demand period at the moment, but the long-term strategy is really quite enthusiastic on the Chinese side. I cannot comment on the cost of each Chinese producer.

Yeah, I guess just trying to figure out how much lower prices can go with that, and I guess their internal thinking, but I guess, yeah.

Well, we've been quite stable for a while, around $60, VAT excluded.

Yeah, yeah. No, thank you for that. I appreciate it. Thank you for the questions. That's the end of the Q&A sessions. I'd like to hand the call back to Amanda for closing remarks.

Terrific. Thank you so much. Once again, thanks everybody for joining us today. Alice, any follow-up questions? I know that Daniel's sitting eagerly by his phone waiting for any of us. I know he's very happy to take any further questions. And I look forward to speaking with you all again as we release our annual results later this month. Oh, next month. It's the last day of July, isn't it? Yeah. Okay, so thanks all. Talk to you soon. Bye.

Bye. That does conclude today's conference call. Thank you for your participation. You may now disconnect your lines.