Shares in Lynas Rare Earths rise on higher product prices and improved power supply to Kalgoorlie refinery

Lynas Rare Earths is already seeing improved product prices from government intervention, which offset major power supply issues at its $780 million refinery in Kalgoorlie.

Western Power has fixed some of the problems that hampered December quarter production at Lynas Rare Earths’ Kalgoorlie refinery, according to the mining company’s outgoing boss, yet the tenuous situation remains.

“We’ve had much more active engagement with our supplier in this area, and at least two issues that have been identified have been rectified . . . we’ve had much more stable supply for a period of time,” Lynas chief executive Amanda Lacaze said on Wednesday.

“However, as recently as yesterday, we had two significant power outages.

“So we continue to assess new off grid solutions as flagged previously, diesel generation can give us reliable power, but we are very focused on on continuing to reduce our environmental footprint.”

In November, Lynas said major outages of clean energy supplied by Western Power to its Kalgoorlie refinery had put production about a month behind schedule.

On Wednesday, Lynas revealed its rare earths oxide production fell quarter-on-quarter from 3993 tonnes to 2382 tonnes.

But a strong uptick in prices meant sales receipts rose from $171.3m to $185m.

“We are seeing significant improvement in market function as a result of the various policies which have already been implemented,” Ms Lacaze said.

“Certainly as we’ve seen the relaxation of some of the proper implementation of export controls from China, the demand inside China has increased, and as that has occurred the price has also started to increase.”

Prices for rare earth elements have improved as the US rolls out a price floor policy, while China reins in export controls it introduced to prevent the formation of a strong Western World supply chain.

Shares in Lynas were up 5 per cent at $16 by 10.30am.