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.