Lynas Rare Earths Stock

Welcome to the Lynas Rare Earths' FY '26 Full Year Results Briefing. [Operator Instructions]

I will now hand over to Lynas.

Good morning, and welcome to the Lynas Rare Earths Investor Briefing for the 2026 financial year. Today's briefing will be presented by Pol Le Roux, Interim CEO; and joining Pol are Gaudenz Sturzenegger, CFO; Chris Jenney, VP, Sales and Market Development; Daniel Havas, VP, Strategy and Investor Relations; and Sarah Leonard, General Counsel and Company Secretary.

I'll now hand over to Pol. Please go ahead, Pol.

Thank you, Jen, and good morning, everybody. Thank you very much for your interest in Lynas, in our company. First of all, I would like to acknowledge the traditional owners of the land on which we live, work and meet across Australia. We acknowledge and value Lynas' Aboriginal and Torres Strait Islander employees, partners and communities and pay respect to their elders past and present, and this applies to the elders in and outside Australia, of course.

Prior to going through the presentation, I would like to spend a bit of time sharing with you what makes Lynas, what makes us comfortable facing the challenges and opportunities of the future. While preparing for the farewell, Amanda went around and asked everyone to define Lynas in a few words. And the best statement came from Khairul, the GM of Lynas in Malaysia, who stated Lynas is personal. Indeed, Lynas is defined by its exceptional workforce. We've gone through challenges over the years, but most important, we learned from those challenges. Today, we have in our people an exceptional level of expertise, with market knowledge recognized by our customers and competitors and in rare earth processing and innovation.

I just want to spend a bit more time on the importance of innovation capability in the rare earths industry. The dominant players and our main competitors are Chinese. They started 50 years ago before anyone else. They are experts in the field. Lynas has invested substantial effort in R&D for several years and built an extraordinary team developing specific expertise in geology, concentration, cracking, extraction and product finishing as well as developing new products addressing markets of the future.

Most important to me is that in our R&D program, we partner with the best institutes around the world from France to U.S., Japan and Australia. Believe me, 10 years ago, they wouldn't pay much attention to us. Today, they are all very eager to participate to our programs. And this credibility from scientists working in our future is a tremendous achievement from the team. In short, the team has a very strong track record of addressing and fixing issues when they arise, but also a unique capability to prepare for the future, developing more efficient processes, improving the environmental impact and developing ahead new products, especially supporting the development of new energy. So yes, is personal, a team working together to maximize our results every day and prepared to deliver on our great ambition for the future.

Going back into the pack. The first refers obviously, and Lauren, that's Page 5 to our safety performance and the status of our Yes, We Care For Each Other program. In FY '26, we are very proud to have delivered an excellent LTI ending at 0.9, which is half of FY '25. Nevertheless, safety is a never finished job. So our increase in TRIFR is being addressed by the team, focusing on reducing strains and sprains through engineering and training. And that is really something that we take very, very seriously.

Now moving to the business side. Let me share with you where we stand versus our Towards 2030 program, which we can summarize in harvesting and growing. So moving forward to Page 7, Lauren. I've been in Mt Weld the last 2 days, and I'm now in Kalgoorlie. Mt Weld is going through an exceptional ramp-up of the expansion facility. Of course, we always have small issues, but very, very little and we are almost done except for the TSF 4, which is being finalized to prepare for future production. So it's really a very good achievement of the team, both the project team and the operation team. That is an operation that we can rely on very comfortably.

Today, in Kalgoorlie, Kalgoorlie has actually delivered a very, very important improvement through the year. You remember that we had quality issues in the product, so the MREC produced at Kalgoorlie, those quality issues have been fixed, in particular through a change in the precipitation process. That was executed perfectly in a week time. Everything was changed and the quality of product improved substantially, making it very easy for LAMP, in Malaysia, to process this product. So that's this new feedstock.

We have still left minor modifications to increase the nameplate capacity, especially in gas treatment. So this is under progress. And all the products and spares that we used to source from China, it took a while. It was a bit of a trend, but now it's secured. We are 100% non-China dependent. And so that makes Kalgoorlie ready to grow and to deliver up to where we expect them to be.

Kuantan. Kuantan had a fantastic year. We had the best ever performance in cracking leaching. The SX was tested as the new nameplate capacity successfully. PF has been modified and so that improved a lot productivity, and very important, energy efficiency. And of course, we started to deliver commercially this term. So that's all about the harvesting. So it's harvesting, Lynas '25 is almost, I would say, very close to being done and ready to grow further.

So going further and starting with strengthening our sales, a very important agreement, is the agreement signed with JARE. So it's 12year-agreement. JARE is, and definitely speaking, it's a very important and exceptional partner for Lynas, and vice versa. We've gone through a difficult time together. We succeeded together, and we are working together to further enhance this partnership. So that's a very important agreement for us, and we are still working on developing this further.

As for the growth, well, we have established a specific team dedicated to the development of resources. So this applies to Mt Weld, of course, the carbonatite, addressing and I was discussing that with the team yesterday, how fast we can address the high DyTb zones in the mine and processing it in Kuantuan. And of course looking at the possible additional resources, especially if they have different rare earth distribution compared to Mt Weld, so with more heavies and less light rare earths. So these are a number of discussions going on, and we have a very well-structured team to evaluate and then discuss these opportunities.

Regarding the development of the new heavy rare earth separation, it is on track. It is on track with our plan. So the plan is -- so we have delivered in '25 DyTb. We have delivered samarium a bit ahead of schedule in March '26. The next step for us will be to deliver gadolinium and yttrium.That should be in the first half of fiscal year '28. And then finally, an increased production of samarium and finally in the first half of calendar year '28. So we are on track, under control and this is very promising development in LAMP and in Lynas overall.

The last pillar of our strategy consists in supporting the development of downstream industries. And so you saw that we signed a partnership with JS Link with an investment of $50 million by Lynas into JS Link and the rest of the project in Malaysia being funded by JS Link. This is important per se because this adds further downstream capacity magnet making outside China. It is also politically very important for us to contribute fair enough to the development of Malaysia as a rare earths hub. And we'll continue doing that because we are fully engaged in the development of Malaysia as an integrated rare earths player.

Another partnership signed with LS Cable from, again, Korea, whereas we work together on the development of metal making, which is an important step in the magnet supply chain and still quite dependent on China. So it's really an area where we work very hard. And finally, an MOU signed with Noveon in the U.S. for development of magnet making. And we have of course a lot of other discussions ongoing so it's a bit too early to discuss about, but we are on track on that development and more development are yet to come.

Under Page 8, financial results. I think the numbers speak for themselves. It's a wonderful improvement in our results, supported by this time both very price level, market price level, at price premium delivered by the sales marketing team versus market, a slight or an increase in product volume. And of course, product offering this will continue improving our top line since we add more products in our portfolio in the coming quarters, let's say. Adding to this, and you will notice a very big focus and discipline on the CapEx spending. So we are spending our shareholders' money wisely. And so the amount of CapEx spend, and that's probably on the next page, Lauren, has increased substantially in the past year in line with the big projects expansion in Mt Weld, Kalgoorlie and the industrial plan in Kuantan.

So moving forward on the business on the market side, I would simply say that the market today, and I insist on that because in the 25 years I've spent in the rare earths industry, it's not always the case. But today, the market is clearly driven by energy-efficient motors and therefore, the magnet needed for those motors. This continues to be growing very fast and at an average of, let's say, 10% a year and very few markets have such growth. I don't foresee replacement of that permanent magnet technology. There is innovation in the magnet making, but not disruptive developments. And so I think the current price which is supporting us a lot actually, well actually I'll force them to maintain -- to sustain because that's the price level needed for additional resource development. And so that will be benefit for Lynas, which is an already established business.

The key to further develop the downstream market, which is essential for us, we need to develop the downstream market outside China. I would summarize that in a few words. Number one, you need to have the engagement of OEMs. And since 2010 when I joined Lynas, there was a little bit of excitement in 2011 with the first rare earths crisis, and then this faded away. I have to say that today, when you meet with car OEM or wind turbines or otherwise, everyone is really serious about securing at least part of their sourcing from outside China, not being fully dependent on a single country. I insist, I have absolutely nothing against China, but I think for the industry, it's very important to learn that through, among other things, the COVID pandemic, that there are some risks in depending too much on one single country for an industry. So the engagement of OEM is here, and that is essential.

Of course, in this difficult challenge to catch up the development of this rare earths supply chain that has been led to China for 40, 50 years, the transition is very challenging and you here need government support. And I think you see news from everywhere and see different governments around the world quite engaged in supporting the development of the industry. And so what is under our control, the key, very simple element, what can Lynas do to support the development of downstream industry? Well, basically, it's simple. We need to produce more DyTb and we need to provide recycling of swarf. When you produce magnet, you lose 30% of your raw material in the magnet making and you need to have access to recycling capability. And that's a very important proposal for Lynas, to accelerate as fast as possible DyTb production, and that goes into the development of resource and especially Mt Weld and other opportunities, and as well as providing to magnet makers the possibility to successfully recycle the swarf on our facility in Malaysia.

So that will be -- there are more slides illustrating this project through the pack and achievement through the year. Again, a great year, a great year where we added success to our track records. Some are visible, some are in production, agreements signed with downstream players with Japan. Other successes are not visible, but they prepare for our future, and this is the step-up of our people expertise, discipline, teamwork across the organization. And this is the time to be ambitious, to seize the opportunities and there are many. So we are, I believe, best equipped for that, and face the future with confidence.

On that, I would be happy to answer or as best as I can answer questions, if there are. And I move back to you, Michelle.

[Operator Instructions] Our first question comes from Rahul Anand from Morgan Stanley.

Look, I want to ask a couple of questions in terms of future direction of the business, but I'm going to focus firstly on the cost side, if that's okay, and then I might queue back again. In terms of your cost base, I just want to touch upon the G&A and the fixed cost base going forward. Obviously, there was a footnote in your statements today, which talked about some of the costs basically being expensed in the G&A line as you were managing the inventories. But in terms of your operating cost base and fixed cost base, is this the right level for us to be using to forecast going forward? Or can you point to any initiatives that you have for either lowering your fixed cost base or otherwise, if we should be thinking about a higher cost base as you produce more in the future and ramp up?

Okay. Thanks, Rahul. That's a very good question. Obviously, we are focused on unit fixed cost and I think the reflection of the fixed cost of this year are actually the results of an increase in volume of fixed costs, whereas the volume on production will increase in a short time period. And there are -- and others can illustrate that there are also in this year, some exceptional elements in the fixed cost. I don't know how much we can disclose on that. So definitely, the current fixed cost level is something you could anticipate decreasing over time.

Gaudenz, maybe you can give some elements on what is exceptional because there are some elements exceptional for this year.

Yes. Okay. Yes, Rahul, I think the good point. I think we have seen in the G&A line increase, I think it's $34 million. Out of this, it's really $23 million is underabsorbed costs, which will work itself out when we fully ramp up or ramp up Kal. So that's, let's call it, temporary placement. The cost you have seen in the other G&A, the $10 million, there I might refer you to the Rem Report, Page 209. I think more than half is explained there. I think it has to do kind of with the leadership change. That's, I would say, a onetime effect. And overall, I would say, obviously, with having the balance more Kalgoorlie versus Kalgoorlie becoming stronger in the mix, you have a certain base effect. But I don't think the base you see today is the right one. I do see the -- also with the issues we have on the ore that if it's working itself through the process, we will also see kind of a moderation of the cost there.

So I would not use the cost base as it is, I would see an easing of it. There is one big element which is going completely the opposite side, and that's the sulfuric acid price, which is very important for us, and it's 4x more than it was kind of 12 months ago. I think the expectation there is that it will probably not -- it's a good chance that in a couple of months, we see moderation on that cost. But that's one cost which is really kind of blowing out. Geopolitical issues on that one expectation about depending what our friends in Washington and Iran and wherever are doing. We would hope it will come back over this financial year, I hope. I hope that gave you a little bit color.

The next question is from Paul Young from Goldman Sachs.

First question is on just the outlook for FY '27. Like in theory, nothing is really constraining you from ramping up NdPr production to 10,000 tonnes or so. It sounds like Mt Weld is running better. Kal has sort of proven that you don't need to run it much anyway considering the cracking leach capacity in Malaysia. But the question is actually more around additional NdPr offtake. Considering you can sell up to 7,200 tonnes to Japan, you've also got the agreements coming through with JS Link, albeit the magnet facility hasn't been FID yet and needs to be constructed in the agreement with Noveon. But the question is actually more around what should we expect on additional offtakes in FY '27? Should it just be JS Link and Noveon? Or do you actually think that you can actually announce or actually sign more offtake with Japan?

Okay. That's a good question. You understand that first, there are lots of ongoing discussions for additional offtakes from OEMs, from new magnet makers to come so there will be more. I can't tell you specifically who and when but definitely, when you look forward to 2030, Chris Jenney and his team basically are able to move the cursor back to production, so we need more production. So that's a very good trend on the sales and marketing. And all the efforts made are in line with that to accelerate the development of downstream projects and capacity increase and secure long-term offtakes from Lynas to those projects, including direct purchase from OEMs. And one critical, as I said, one very important element, very simple, we are the first DyTb supplier outside China, and we need to -- that's a great achievement. But it's very critical for us to accelerate that development because the world outside China is very short of DyTb. That's the main constraint, I would say.

The next question comes from Mitch Ryan from Jefferies.

My question just relates to, I guess, you experienced ore variation in the June quarter, specifically as you're working through that appetite ore at Mt Weld. Can you just provide an update quarter-to-date how concentrate quality is tracking and if that's worked through the system at this point in time?

So as I said, I was in Mt Weld, Monday and Tuesday, I'm in Kalgoorlie today, and I will be in LAMP in 2 weeks' time. But definitely, we have improved that. That has been, as I said, a very painful time because it was complex. So the quality, the way to segregate ore and prepare a better feed to mill in Mt Weld is now well under control, well done. And all the tests and development we made in modifying or adjusting the processing both of flotation and cracking and leaching has substantially improved our capability to go through this transition period. So today, and I cross my fingers but today, we are very happy with this quarter's production performance.

The next question is from Jonathon Sharp from JPMorgan.

Question from me. Pol, for partners like JS Link building out magnet capacity outside of China, how dependent is that build-out today on Chinese equipment, technology or even the technical know-how? Can they realistically scale the capacity with minimal dependence on China?

A very good point. For the detail, I can't disclose what is JS Link Company's knowledge in detail. What I can tell you is that their key technical people, I know them pretty well, are basically Japanese experts of very high level. And so JS Link has developed their IP mostly with Japan but not so much with China. So they are quite independent of the Chinese knowledge and expertise. And remember, Japan invented the NdFeB magnets. So they are on top of the game technically.

The next question is from Daniel Morgan from Barrenjoey.

Just wondering if you could, in any way, quantify what your production volume expectations for NdPr in FY '27 are?

You know the answer, Daniel. We don't make forward statement but definitely, we'll continue to ramp up and primarily make sure that we have enough production to supply all our customers outside China. So I can tell you that the FY '27 will be fairly higher compared to FY '26, pretty high. Sorry, I won't give you a number on that, but yes, pretty high.

The next question is from Chen Jiang from Bank of America.

My question is in regards to your capital allocation framework, if you have one. So by looking at Lynas, your balance sheet, you have $1.2 billion sitting at the bank after your equity raise last September. And by looking at your cash generation over the next 12 months, I guess you will continue to build cash even though you have CapEx cycle. I'm just wondering how the management team currently ranks the capital allocation priorities because you have so many small projects, Lynas 2030, between your additional upstream base stock opportunities, downstream growth projects in metals, magnets including your JV, organic, inorganic growth? And most importantly, how should we think about shareholder returns such as dividend?

That's a very good question. All the numbers in the yearly report include CapEx that are clearly and officially and transparently decided. I just want to first say that, yes, we raised more than $900 million a year ago, but that's for the 5 years to come, so until 2030, and we are 12 months through or 10 months through. And it's fair enough that we haven't yet executed all the projects that we have in mind. So these different projects that are under discussions, they are not included because they are not fully defined or fully negotiated when it comes to external growth. So the cash component is not known and therefore, not included in our tables.

So we rank -- I would say to summarize that which is in the report are basically the one investment that is decided, which is the heavy rare earths separation, so how much we will cash out next or this fiscal year on that, plus by priority, all the small business or quick wins CapEx that we have in the pulp so as to secure our production volume and further improve our cost position. The big ones, per definition, because they are not fully defined as we speak, cannot be shared and disclosed at the moment. But yes, we'll make announcement as other things develop.

The next question is from Austin Yun from Macquarie.

My question is also on the 2030 strategy. Looking at that slide you have, you have the downstream capacity and expansion to metallization all kind of executed with different announcements. For the additional ore resources, you finished the Mt Weld, but you continue to highlight this new feedstock potentially for ionic clay. I don't know if it's correct to make the link to the term deposit. They still have like 270 million. Just keen to understand for this part -- particular part of the strategy, should we think about it in the next 12 months or something kind of longer term after the succession plan is clarified or maybe after the environmental approval is settled with the Malaysian government? Any color on this one would be very helpful.

Thank you for the question. I think we definitely need to increase the DyTb content in our feed. The simplest, fastest way to do that is to accelerate the access, therefore, modify and that's what I discussed with the team yesterday, the mining plan of Mt Weld, so as to access the DyTb-rich that we disclosed when we disclosed our last resource and reserve statement. That's the fastest because we do not need permitting. It is still mining in the same pit of Mt Weld, process is not changed. It is simply execute that as fast as possible. There is a cost because we need to evacuate the overburden that we are not planning to evacuate so early. So it is additional mining costs or anticipated mining costs that is under calculation and that will be disclosed in due course, in the very near future.

Beside that, we are looking at the pure ionic clay options. We have basically a lot of people with development projects from everywhere around the world coming and knocking on our doors, and we are discussing with them what kind of a strategic agreement we could have, whether it makes sense for us and whether it makes an industrial sense, means we have a good complement to a material resource. Second, whether the environmental performance of these projects are in line with Lynas' strict policy on the matter. At the end of the day, if financially we can make a deal that makes sense to our shareholders. And so these discussions are underway. As soon as any one of them would be finalized, it would be disclosed to the market. It is a bit too early for that. But it has got nothing to do with succession plan or otherwise that you mentioned. It is just a matter of timing. We are on August 26th. Could be, not tomorrow, but soon.

The next question is from Dim Ariyasinghe from UBS.

Just a question on the sector's broader M&A trajectory and implications for you. So Energy Fuels is putting in a bid for Vacuumschmelze. How do you think about that in the context of your own sales book? Did you sell to them? Will you still sell to them? And then hypothetically, if that continues to happen, so you have more of your potential competitors buying downstream, how does that affect how you think about your sales book and then your downstream strategy more broadly?

That's a very good question. The first remark I would make is when you see competition growing, you should be happy because if you have competitors, it means that you are playing in a very attractive market. So I'm happy to see competition. Now what matters to us is to further deliver on the specific of Lynas. And the specific of Lynas is a track record, the supply ability, the predictive supply ability of Lynas, the quality of our products, the partnership with Japan, and with new players. So you can't marry everyone. This year, we added JS Link to the list, LS Cable for metal. There will be more and there is enough room for everyone. At the end of the day, what matters is not so much what on paper you build as an alliance, but how good a newly formed team can be to execute the strategy.

So we focus on the execution of our strategy more than worrying about how others would. So it doesn't change our plan, to answer your question.

The next question is from Matthew Hope from Ord Minnett.

Just wanted to follow up on something you mentioned during the call. It looks like you're considering recycling and adding more production to Kuantan. So I was just wondering, have you had any -- at this stage, any sort of thoughts about the size or when this project might take place? Would it take more separation capacity? Or would it sort of just backfill what you already have? Just, yes, some more details on that project.

That's a very good question. Two words, one on recycling because there are lots of communication around recycling. There are 2 kinds of recycling. One is end-of-life magnets recycling. And the other is recycling of the swarf. The swarf are 30% of raw material of alloy that are wasted during the magnet-making process.

When people talk about end-of-life magnet being the wonderful opportunity to secure critical material, I think there is a misunderstanding here. I'll take example of car industry, which sees the majority of magnet usage today. A car lifetime is 15 years average. 15 years ago, there were 200 grams of magnets per car. Today, there is 2.5 kilograms of magnet average per car. So you see very easily that if you address the 20 grams of a smaller automotive market 15 years ago to supply the existing market, you have a gap. So I think it's important to have the ability to recycle end-of-life magnet, but that will be more preparing for future because it will start to be substantial only after 2030. It's important to have, not important to execute immediately.

Whereas the swarf recycling is an immediate adapt and very important step for the competitiveness of the magnet maker. So a magnet maker who is not able to competitively recycle the 30% swarf cannot be competitive. And that's the service we offer. So we are in discussion with a number of magnet makers, JS Link, of course, being in Malaysia will be the first, but there are others that are interested. And we are discussing that scoping the size of recycling. That would be a marginal investment, adding to our existing facility, combining the heavies and the lights separation.

When it comes to increasing the production size of LAMP, LAMP has substantial upside to increase its production capacity. I know that last year we mentioned 12,000 tonnes a year as a possible target is more related to how fast the market grows. What is important for us, there are 2 elements to consider. One, when you see how effective was the CapEx, we invested around $100 million for so-called industrial plant in Kuantan, whereas we increased our production by 50%. We added up DyTb production. All of these are $100 million. That is very, very cost effective and we did that with a very smart modification of our solvent extraction system, which is unique, very different and we don't disclose how we modify that.

So cost effectiveness of capacity increase is to us very important, and that will be a big element in making decision on increasing further the size of LAMP in line with the market demand. So LAMP could go very high. We may also consider at some stage to have another site, I don't know. We have time to think of it. But potentially, LAMP has potential to grow a lot in terms of size and we'll grow that as the demand justifies.

The next question is from Rahul Anand from Morgan Stanley. We will go to the next caller. The next caller is Mitch Ryan from Jefferies.

As part of your environmental approvals, I believe you've committed to spending 1% of gross revenue on thorium extraction development at LAMP out to 2031, which I think is roughly $100 million. What progress has been made on that? Do you remain committed to that program? And is the spending commitment unchanged...

That's a very good question. We are -- we have achieved very good results at the pilot scale with a modified cracking process, whereas the thorium uranium extracted out of cracking/leaching. Now that's one element. What we are working on at the moment is to, I would say, change the vision of process. Instead of extracting only what you want from the raw material you have, making sure you extract everything that has any value from your -- anything you take from the ground. So very simple, thorium might have commercial applications, but you also have scandium, you also have phosphate, and so we fine-tune the process. And we have lots of R&D program on that to be able to produce and value every single product and elements that is in the elements that hit cracking/leaching.

So we are in the process of building an industrial pilot plant and test all the developments that have been done around the world on this program. We will see from there. It is R&D program, so in a year's time, we should have further results on that. 2031 is a challenging date, but not impossible. At the end of the day, for us, what matters is to make sure that such a process change would be profitable for Lynas. So we need to maximize the return. This goes into improving recoveries of lights, heavies, valuing all elements fitting this process. So at the end of the day, we find a process that is improving further the cost position of Lynas, at the same time, addressing the environmental consideration of Malaysia. It is a great project, actually.

The next question is from Jonathon Sharp from JPMorgan.

Pol, you've historically talked about the ramp-up in terms of tonnes per day. On my numbers, second half production averaged around 21 tonnes per day. I believe you're working towards 25. Can you just maybe let us know where did you end the year and where you want to get to through FY '27?

A very excellent question. So we have 2 ways to consider. One is, it is a formal consideration. It's called the best demonstrated performance. And this is something you measure, let's say, over 3, 5 days average because how high can you go in terms of daily production. And this differs at each stage of the process. So what we target on SX or NPF in Kuantan is 30 tonnes or even 33 tonnes a day. At the moment, we have demonstrated that we are able to get 30 tonnes a day over several days. So that's a great achievement, and we need to further develop to move up to 33 tonnes a day.

Cracking/leaching in Kuantan has been very amazingly performing last fiscal year. So we had up to 31 tonnes a day at some stage. But again, I mean, don't be too excited. This is exciting, but problems occur. You have power shuts, you have breakdowns, you have regular maintenance, preventive maintenance, et cetera. So you can cut it off by reliability of equipments and external factors, which currently brings us to where we are. We have delivered on FY '26. The quality variation on Mt Weld concentrate was one of these elements that was very frustrating to the team because it impacted directly the cracking/leaching both in Kuantan and Kalgoorlie performance. So this is now way better addressed.

But yes, we follow that the best. It's very important -- two aspects on capacity. One is the best demonstrated daily capacity over a few days' time at each step of the process. And I think that we are pretty well on that. And the other is improving the reliability, including reducing your exposure to external factors that includes -- included in FY '26, sometimes shortage of chemicals that we were sourcing from China and then all of a sudden was not possible to source or other external factors like the famous power supply to Kalgoorlie. Those are things that we need to take into account as well because at the end of the day, the production, the performance, the combination of how far you can go at your best versus how long you can run. Sometimes, you need to be a champion for 100 meters and marathon at the same time. That's the challenge.

The next question is from Paul Young from Goldman Sachs.

Pol, I don't want to get caught up too much in the near term, but just on FY '27, where you said that production should be fairly higher than FY '26. You stepped through Mt Weld is running better, the downstream capacity, you just outlined can do a level or so, but that's without the maintenance shuts, et cetera. But just looking at FY '27, are you planning on ramping up in line with demand and sales contracts? Or are you planning on actually ramping up faster than you can sell and you'll carry the inventory on the balance sheet? Or can your customers actually prepay for your material like, for example, we've seen with MP?

Okay. Basically, the FY '27, Mt Weld is able to deliver as much as Kalgoorlie and LAMP can swallow. As I said, the key focus for us are making sure we keep control, which is the case now, but we need to keep control on the quality of concentrate produced by Mt Weld so that the productivity of cracking and leaching in both LAMP and Kalgoorlie are not impacted. That's a very important element.

The other element obviously is to -- and that's why I spend these days in Kalgoorlie, but making sure we execute the necessary last few detail modifications in Kalgoorlie for us to secure, maximize the production ex Kalgoorlie. We have one element, which matters a lot in LAMP. You know that every year, the second quarter, we are a bit limited by the allowance of concentrate we can crack in Malaysia. So we are still working with the regulators here to increase that to 110. That would deliver a lot more production for us, since every year, normally, we focus on concentrating maintenance during that time, but we wish to make profit of that period of time to produce more.

So that will be the element for us to maximize our production. I would say, it is more linked to industrial performance this year because we have still some issues to fix rather than the demand.

The next question is from Chen Jiang from Bank of America.

So my question is a follow-up from the answers you provided earlier to my first question. You mentioned various projects in discussion. I'm wondering, is that more like a timing issue or because of the previous CEO, Amanda, has left by end of FY '26? Because it's been 12 months since the equity raise. Have you be been able to elaborate on that? And also what's your view on the inorganic growth, especially for upstream feedstock for the new ionic clay? I guess you are open for the inorganic growth given you signed an agreement with one of the Malaysia government and ionic clay is reaching Malaysia.

I understand you are frustrated because we don't spend fast enough our money or your money, but it's just 12 months. It may sound very long for you, but it's not that simple. we need to seriously assess the quality, the economics of potential resources, the permitting situation because the project for ionic clay, the regulation is -- it's in countries where the regulation is not existing or not satisfactory, and we are very careful about that. And finally, like a deal that is economically sound for our shareholders. So it's nothing to do with succession planning or whatever.

I mean Lynas and the team keeps working very hard on that on a number of projects. And if I take the Mt Weld resource development that is 100% in the hands of Lynas, it is a complex work to readjust your mining plan. I was challenging the team, as usual, yesterday, saying how can we go faster, et cetera. It is not that simple. So you need to mobilize resources to change your mining plan, and that's for the higher DyTb content. The other one is the carbonatite, for which we have a very high expectation. But this is all about not only further characterization of the resource, but also optimizing the processing concentration step and cracking step of such resource. So it's a lot of efforts on R&D for that prior to declare that zone as a reserve.

So I'm sorry. I'm like you, I wish that everything was done yesterday, but sometimes we need to be realistic. Trust me, we are very careful to make sure that the money is spent wisely. But yes, sometimes it's wise to think deeply on the project rather than go ahead and then realize that we ignore some aspects of the deal or the opportunity. So sorry, I hope that in the near future, we'll come back to you with some more announcement. But JS Link, LS Cable and Noveon is quite achievement in the last 12 months. There will be more to come. That's all I can say, and they are all under discussion.

The last question comes from Daniel Morgan from Barrenjoey.

My question is just a simple one, like if we look back when results are presented in a year's time, like what would successful outcomes be? Like what are the key things that the company wants to achieve in the next 12 months?

If you look back into our mindset, our expectations, our achievement in FY '26 versus what we were expecting beginning of FY '26, I would say, overall, I'm very happy. We are pretty happy overall by how things went. A little bit disappointed, of course, by the production volume because of this quality issue we faced in the last quarter, which is for the whole team frustrating but anyway, that is life. No reason to complain, just address and learn from that and make sure it does not repeat again. On the other hand, the development, the heavies, the DyTb commercial, and the way it was received by the market is even more positive than expected. And that is the reason why we need to further accelerate on that. The samarium production was delivered earlier than expected, so that is great.

on that. The product was delivered earlier than expected, so that's great.

At the end of the day, the safety, we were quite concerned with the last year's safety performance. The safety performance of this year has been just cutting by half the LTI, which is a very important aspect of performance of the team. As I said, and for me, not numbered, but I have 25 years experience in this business. Today, when I go around with the team, be it Mt Weld, Kalgoorlie, Kuantan, which is on top of the game, and the R&D team, I feel a level of expertise and engagement that I have never perceived in the past several years. That, to me, makes me very comfortable for future, yes. And that is achievement mainly of 2026, yes.

There are no further questions. I will now hand back to Pol for closing remarks.

Okay. Thank you very much for this very interesting discussion. I hope that you are all convinced, as I am, that Lynas is very well equipped, has delivered pretty good results in '26. But as I said, most important to me is perfectly equipped to seize any opportunities in the near future and deliver further growth. Thank you very much all.

That concludes today's call. Thank you for joining us. You may now log out.

Welcome to Lynas Rare Earths June Quarterly Results Briefing. [Operator Instructions] I will now hand over to Lynas.

Good morning, and welcome to the Lynas Rare Earths Investor Briefing for the quarter ending June 2026. Today's briefing will be presented by Pol Le Roux, Interim CEO; and joining Pol on the briefing are Gaudenz Sturzenegger CFO; Chris Jenney, VP development; Daniel Havas, VP Strategy and Investor Relations; and Sarah Leonard, General Counsel and Company Secretary.

I'll now hand over to Pol Le Roux. Please go ahead, Pol.

Thank you, Jan. Good morning, everyone. My name, that is Pol Le Roux. And as you probably know, I replaced [indiscernible] as Interim CEO following the retirement, June 30. I'm pleased to share with you my analysis of our performance in this June quarter '26. And of course, we'll then try my best to answer your questions, if any.

So during this quarter, the market continued to be strong, and all the customers are reconnected with since I took this new position, indicated a higher-than-expected growth of magnet demand, raising their concerns for security of supply and supporting, of course, quite healthy price level. So that's a great situation to be in. And this market situation beneficiated Lynas, and we achieved the record 98-kilogram average selling price through the quarter.

This performance is the result of a favorable market environment, of course, but also improved offer from Lynas, in particular with the sales of [indiscernible] and trust premium obtained by the team in recognition for reliability. This favorable situation will continue as we finalize the qualification of our newly launched samarium, a move from qualification into commercial contracts.

I'm actually in Korea. And following this call, I will head to the signing ceremony celebrating the new partnership between JS Link and Lynas. This agreement includes a $50 million contribution by Lynas. In the 3,000 tonne magnet factory that JS Link will build in Malaysia, as well, of course, as a 10 years real supply contract.

Some of you know my attachment to Korea, where I enjoyed 7 wonderful years. And I look forward to further development in this dynamic country, surprisingly called Modern country, which is not very obvious when you work here. And then, this is an important move by Lynas and one more step in the development of our Lynas 2030 Strategy, supporting downstream industry development outside China.

On the operations side, I would like to first start with safety because we have -- we are very pleased to continue operating safely on our 3 sites as demonstrated by the decrease in our lost time injury frequency rate, which went from 2 to 0.9 end of the year. So that's very good achievement, and we're looking forward for further improvement of the situation, but it's already a very good performance level safety-wise.

On production, I have to say that our product and performance was clearly not as good as expected, was impacted by the quality valuation of our concentrate as we were mining into transition zone. These variations were impacting the productivity of cracking leaching in both Calgury and Quanta therefore, reducing the feedstock, the fee flow to the sovereign extraction, and therefore, the total production. So that experience while has been very frustrating, it has mobilized all teams together from the 3 sides and the R&D and led to a step change in our expertise, including solutions to our process parameters and sequence, upstream and downstream to adjust to our quality valuations.

So again, we are disappointed, but we get out of this much stronger individually and collectively as everyone has now a deep understanding of the process from mine to [indiscernible] and how each process step influence the others. On the positive note, the production of DY and terbium was higher than expected. This includes part of the WIP. You remember last quarter, we explained that we had lower production because we had some WIP, but in fact, beyond [indiscernible] and WIP, our recovery has improved, and that's a very good sign and should continue as we start [indiscernible] during this July quarter.

Last but not least, and its quite important, reflective of the improvement of the team in Kalgoorlie. Kalgoorlie has started a new process or continuous carbonation process and they did that faster than it takes to write a report. So that's to me a very important change, reflecting the improvement of the Kalgoorlie, the process capacity in the expertise, and that is something that makes me quite confident for future.

Project-wise, we just focus on the heavy risk operations since expansion in Mt Weld is almost finished. We just need to finish the tailing pond number four. On the HR project in the quarter, we have reviewed the project so as to allow us to go for stage product by product execution of the project. So you remember, we produced this project in May '25, terbium in June '25, samarium in March '26. And now we changed the schedule so that we could produce gadolinium early fiscal year '28. So let's say, in the -- well the Northern Hemisphere the summer '27, [indiscernible] early calendar year '28 and [indiscernible] will be probably around April '28. So that is very important because we continue seeing very strong demand for every single element this project will deliver and very important to produce -- to execute and start supplying the market step by step and not wait until the full project is finished.

In parallel with that, we have had a little bit of a detailed technical discussions with specific customers. And that discussion led to some change in equipment in order for us to match with specific targets, specifically very low level of nonresecurities and even in some case, is managing the physical characteristic of the product, such as very narrow particular distribution. So modification combined with now identified stores of all equipment outside China. You know that we can't buy any more anything, and it is for us to really identify contractors who could actually deliver all the equipment needed. So now it's done. And this all modification together led to an increase of our CapEx to $294 million, Class III CapEx. So it's so well controlled and precisely defined CapEx.

And again, what is very important is, first, we are in control. And second, we managed to anticipate and start to deliver on specific product all through the project rather than waiting to the end. So all in all, this quarter had its share of challenges and successes. But altogether, this has led Lynas improving our cash position by $138 million to [ $1,209 million ], which is a great feeling and a good place to be at the moment of market opportunities. So that would be my summary of this quarter. We don't make forward statements, but we feel pretty confident for the quarter we are entering, and I will take questions now, if any. Thank you.

[Operator Instructions] Our first question today comes from Austin Yun from Macquarie.

Thank you for the update. Good to see that you made some progress on the Kalgoorlie despite the old quality challenges in Mt Weld. I'm just keen to understand, looking forward, given the improved understanding of the ore body and also improvement at the inviting facility. How should we think about the production run rate at Kalgoorlie the next 12 months?

Well, I cannot project exact numbers. What I can tell you is that Kalgoorlie is in a much better shape today than it was at least 3 months ago. And this is a bit unfair for this quality variations that we missed at the start, to be honest, impacting the productivity, otherwise, we would have delivered a very good quarter. So moving forward for Kalgoorlie, I think we can be pretty confident and what is really pretty important I try to explain that, but it's not only, I mean, all the variation comes from more condition zones. So it was frustrating, but we have developed a very, very complex new process parameters, including cracking leaching and [indiscernible]. to address those variations. So that makes me comfortable for the future because everything depends on people's expertise and I see that growing very fast. .

The next question comes from Chen Jiang from Bank of America.

Just a follow-up on your production and operational performance. So NdPr production for this quarter looks like the second weakest quarter over the last 5 quarters. I understand the quarter-over-quarter variation [indiscernible] variations. But I just want to confirm, has currently achieved 5,000 tonne per annum of NdPr capacity after month well expansion? And also there are more for issues [indiscernible] what kind of actually impacted your production mode?

Okay. So I'm not sure I heard everything you cut off quite a number of times. When it -- maybe you asked a question about Mt Weld capacity. Mt Weld had -- so Mt Weld capacity basically this quarter was impacted because we had some problems on the water recycling union. This has been fixed. Unfortunately, I would say, in case of the problem downstream, Mt Weld supply was big enough for the downstream. But now I think Mt Weld is really set up for the original design capacity.

The only step that is remaining for us is to start the IsaMill grinding very fine, so liberating more areas, so improving the return rate. That we had a few -- done very short, but normally, we should establish that [indiscernible] from this quarter, and that will be it for Mt Weld. So not too much concern on my side on the Mt Weld.

I just want to emphasize a little bit because it's a good example. The expansion came with a lot of automation, including now you have a fixed crusher. And so that makes life of everyone way easier, but we realized that in the past, they had a mobile crusher and so the people in charge were really discriminating ore and blending them nicely to have a constant feed on the floatation system. Of course, once it's all optimized, you realize that people discriminate a lot less the ore, that's something that we missed, to be honest, in the design. So we addressed that as well.

But Mt Weld is really in very good shape and except for the TSF that we'll finish this quarter or next quarter, everything is done and working pretty well.

The next question comes from Paul Young from Goldman Sachs.

Pol, can I just dig into Mt Weld a little bit more, just the challenges in the quarter. I mean I visited the site in March and the commissioning was going extremely well, and there's clear upside on the base case, 1.3 million tonnes throughput. And I just step through the mass balance clearly can produce over a couple of hundred thousand tonnes of concentrate and you hadn't had to run Kalgoorlie cracking and leaching really at all because the cracking and leaching facility in Malaysia can do 100,000 tonnes of import. So the mass balance stacks up that Kalgoorlie hasn't really needed to run, and to this point, probably more a statement, really, and the commissioning seems like it's mostly completed in all the key pricing units in Kalgoorlie, just to talk from our world, I mean, I understand you're looking at the circuit you had a mineral size of that. You've now put in a more fixed crusher. You've had some -- clearly some challenges with the particle size distribution being fed into the SAG milling circuit, when I was there at the SAG mill was running really low and more [indiscernible] mode. And you've obviously had some variability on fee size distribution and different ore types coming through. So it sounds like this is all pretty simple. So just to confirm again, just to provide more color that it really was around size addition to the flight circuit challenges with and filler sort of floating with the Mt Weld and then basically impacting concentrate grade and also particle size in the concentrate. I know that's a long-winded sort of technical question, but it sounds as though these are all Lynas commissioning issues. I guess, can I just confirm that?

Yes. So anyway, I like techniques at the end of the day. Thank you very much, Paul. The variation of quality, I mean, we are beyond the [indiscernible] not a big change on the new mill related to particle size, et cetera, but here is more variation on composition. So we have variation of [indiscernible], calcium carbonate phosphate and so it's the combination of these impurities combined, so it's not one versus the other. That's why it was a bit complex. It's the question with 4 different variables, which are surface magnesium, calcium and carbonate and depending on the respective level of one versus the other, then you have different performance in both under flotation, but most importantly in cracking.

This impacts the dynamic of the reaction when you mix with sulfuric acid, your action goes too fast. So you have -- [indiscernible] becomes terrible, so your product doesn't flow fast enough, and so that impacts your productivity in cracking. So it's more the composition and that is the result of transition zone when you have dollar appetite, [indiscernible]. You need to control that and be able to react both what in [indiscernible] and modifying the flotation process for us to take you dynamic of the reaction in the cracking that is under control and not leading to viscose space. I don't know if I answered your question, Paul.

No, no, sorry, I thought you had more pricing line on a satellite consistently rather than. But I think -- yes, just to see that obviously, the transitioning [indiscernible]

The next question comes from Rahul Anand from Morgan Stanley.

Pol, Look, I just had one on the CapEx increase that you had. Obviously, the plant was going in on the 29th of October. That was really after the restrictions came in from China perspective, and I'm aware of given past understanding that there were contingency plans also in place to sow from alternate suppliers. I guess my question is, it's taken us a fair bit of time to get to this updated CapEx estimate, is it purely the [indiscernible] is here in terms of contingency? Has the scope changed? I know you've talked a bit about purity products. But if you can provide perhaps a bit more details as to what exactly has changed in terms of the flow sheet, so to speak, that has led to the increase at the size that it is.

So you understand that I will not go into too much detail because I don't know if we have the work of our competitors. But there are 2 elements. One, you're right, the Chinese restrictions, especially for Lynas were clear from quite a while. Now to review where you can buy outside China, every single equipment that goes in a factory, it's complex and sometimes we simply don't have manufacturers existing outside [ China ]. And so it takes time for developing these kind of contractors that can build, for instance, a good face specific reactors, [indiscernible] it's -- it was a bit of a challenge for us to really develop to the level of performance we want.

Yes, it took a while and then additional cost to make sure that we would have a secured [ non-China ]supply chain for the equipment. So that's one part. The other one is -- and that was very good that the sales marketing team went way ahead with end customers because the specs of -- I used to work in this field 15 years reporting a different company. the spend has changed over time, and they are more constrained. So that at the end of [indiscernible], for instance, to have a verification stage for chemical products and to also have water purification for derive water systems. So as to make sure that we will maintain a level and achieve the level of -- low level of impurities of non-rare securities in the finished product that is required by those specific customers. So there [indiscernible] really to go through all the non-Chinese equipment including sometimes in a few cases, developing the technology for some contractors. And the other was really going far into securing the purity and the particular size of our finished products up to the targeted specifications of our customers for these new products. So that are the 2 elements that led to an increase of capacity. But I have to say, now that CapEx is fully reduced, what I said is a Class III. So it means that we have got through all that, et cetera. So it's -- the next step is construction, and we are in construction actually.

The next question comes from Jonathan Sharp from JPMorgan. .

Pol and team. Just a question on China controls. So they suspended their October 2025 export controls, and they potentially come back in on the 10th of November this year. So just those controls potentially returning. Can you just tell me what are the potential consequences for the industry, how are customers preparing? Just interested in your thoughts on those potential controls? .

Well, it is announced in November this year. definitely -- well, what I can see from our side and what I can see we're making customers the level of concern about accessing specific rares from China is I know that in China, a as producers are trying to lose, we need more business. But I think it's a very important geopolitical [indiscernible] claim. And I foresee this decision to be further strengthened. And therefore, our job is to grow as fast as possible additional capability, additional products, additional heavy areas in particular. And all of this for Lynas, whether where there [indiscernible] where Lynas cannot source any single material expertise whatever from China, and we don't. So that's a challenge ahead of us. But I think we are in a market environment where you need to go very fast because China is still in control of the majority of the risk supply. And that's a major challenge for the rest of the world.

The next question comes from Daniel Morgan from Barrenjoey.

Pol. Just back on Mt Weld, when do you expect Mt Weld to be back up to full operational run rates, i.e., do you still have a lot of transition ore in the feed in the months ahead? Or have changes being made to the operations such that it's delivering the Fed, the downstream nets currently?

We are fully done now on what we know -. So this presenting experience is in the past, and I will go in Mt Weld, well, we are always careful to not underestimate issues, but me, Mt Weld is well on track. Now it stand with. We are back in.

Just a quick follow-up, if I may. I have observed in the Kalgoorlie region, there have been several grid instability issues, other mining firms have referenced that during the quarter. This was not referenced in your release today. Obviously, if Mt Weld Upstream is not operating at full tilt. It's not giving feed to the downstream at full tilt. But if mt we're delivering with the bottleneck moved to Kalgoorlie and Power and if that's right, is -- what's being done about power supply for Kalgoorlie?

Very good question. . It's true that the power supply is not up where we want it to be. This being said, we had a very difficult situation back in Kalgoorlie January to February this year. Since then, the situation has improved, there were some modifications made on the Western Power side. And okay, it's not as good as we wish. Let's say, we are staying within our one power failure per month, which is not what we wish to have. That's what we have. It's, I would say, manageable given the excess of capacity we have between Quantum and Kalgoorlie. We're still waiting whether we should go for an off-grid solution or not. At the moment, it's not real [indiscernible] has improved, not to where you could dream of, but enough. .

Okay. thank you Pol for your perspective.

And I hope I won't be wrong in a few hours next week. Keep just one power failure per month, it would be nice. .

The next question comes from Mitch Ryan from Jefferies. .

My question relates to at world. Obviously, you're blending ore from mine for now, and that seems to be under control. But -- are there any physical modifications that the Mt Weld circuit will require in the mid- to long term as you progress through the ore body to account for that ore minerology to meet the required concentrate grade and quality?

Yes. In [indiscernible] we know that we'll have variations of ore and -- but that's not been an end and we're working on this to probably -- well, we have plenty of options process wise. And so we are addressing that now. We have time to prepare for transition, but for really addressing mining specific [indiscernible]. And so this is under progress at the moment. We work on it and get ready for it. probably later in this -- well, not even the fiscal year but the year after, yes.

Okay. And sorry, is that when you will encounter the problems? Or is that when you will communicate the solution to the market? .

Yes. We will. Of course.

Sorry, go ask my question. Has that been a problem?

No, we will not wait for the problem to happen. This happened this last quarter. So it was a problem with a transition zone. But when it comes to different kinds of ore to be mined and processed, we have time to really address that. We have different options that we are studying. And once we are done with it, we'll commit it, but that will be anticipated not in a reactive mode like this quarter. .

The next question comes from Matthew Hope from Ord Minnett.

I just wanted to know if there was any change in the plans for the heavy worth separation plan because you've spoken that then you would add [indiscernible] when they would be coming out, but my understanding was the heavy refinery resource is supposed to replace the current facilities for disposing terbium and samarium but you've given that timelines for those. So are those still going to be replaced with the new? And if so, what's the time line on the new and large production for those elements?

The [indiscernible] I understand the information didn't pass very well, but I don't know why. We today in our estimation, we produce 240 tonnes of this presume if we had it in the feedstock. So disposition production is established and will not be modified from Danone. It's just a matter of us changing the feed with the higher cost of disposal in termium for which we have different options, and we are working on them. For samarium, we have a temporary situation where we produced 400 tonnes a year or samarium that's a temporary situation that we started in March this year for the full production of samarium, which will go to 1,100 tonnes or more, that will be an asset that is under construction, and that will come beginning of calendar year '28. In between, you will have Gadea in beginning of fiscal year '28. So sometime between August, September '27. And then as I said, [indiscernible] later, and finally, the samarium and -- I'm sorry, I didn't include in my presentation, the samarium increased to over 1,100 tonnes from the current 400 tonnes. .

The next question is from Neal Dingmann from William Blair.

My question is around the JS contract. Could you talk about -- and will that be a continued strategy of will that be one of several joint ventures that you would connect more on the downstream side? Or what is the strategy going forward beyond just the JS contract that was announced?

Well, we are not a magnet maker. We are minor in the chemical processing player. So we will not manage magnet making at Lynas. This being said, we support magnet makers because we need more new magnet makers coming up. And so this partnership with JS Link was a very good opportunity for us. We are -- well, $50 million is not peanuts, but it's not the majority of the capital they need to build this factory. And they will manage this factory by themselves in the business. .

We are supporting them in our position, which is basically supply of rares and most likely very soon, the recycling of swaf. That's how we position ourselves. And we'll continue doing that, supporting downstream industry, including metal making and magnet making, but not necessarily managing those assets, especially magnet to me is a step where the expertise required are very different from what we have. So that's definitely not a step -- I'm not a supporter of the famous mind to magnet theories. We have enough work in positioning.

Understood. So with most of those, would you make -- continue to make investments in the equity? Or what -- how do you see structures going forward?

It's just when needed, if it's needed for -- we can look at it. But it's not -- I think there are many pits where the key point is security of supply and can -- and we do discuss that. JS Link was a particular case where some capital injection was needed to help them take off. That's what we did.

The next question is from Chen Jiang from Bank of America.

Hello. I don't hear the Chen Jiang's question, by the way.

It appears Chen Jiang is having some technical issues. So we'll move to the next question, which is from Rahul Anand at Morgan Stanley.

My questions were answered, but I would love to perhaps test the Mt Weld thesis a bit more I know you've talked about transitional as being the key driver for the variability in production that you've had. And obviously, you have to marry up 3 different plants or 3 different sites to produce what you produce, so it's complex. But how do we think about the plan from here? I mean I know you're not here to provide guidance, but in terms of the mine plan and when you think all these 3 can be on a longer again? And how do you kind of think that the medium-term planning, what type of actions do you need to do now? Do you need to fill more, define the ore body better? Or do you have the right definition, but not the right planning in place? I just want to get a bit more sense on the mining side.

So all of this, except that we already did. So we launched additional mining drilling to better characterize the ore that is mined. So that's already launched from end of May. So to have a better acumen, accuracy on what we mine. Second most important is to -- so we are a lot more segregative in ore -- sorting ore and blending controlling back the blended ore is feeding to the flotation. But the most important to me are the improvements that have been made in variations in the flotation circuit and cracking [indiscernible] that allow us to adjust and to maintain productivity despite these valuations. So that's the reason why -- well, I don't want project. We feel much more comfortable in secured now that we were.

The next question is from Paul Young at Goldman Sachs.

Pol, a few further questions on the JS agreement, please. Can you share any details around the additional capital requirements that you also understand the $50 million going into the equity part for JS Link will go into funding part of their share of the facility. But can you share any sort of total capital numbers for the project and potentially when it could start production? And then further to that, is the supply contract at NdPr going to be at the U.S. $110 a kilo? Is that the base case?

Well, we do something that I would enjoy I will ask Chris Janney to answer that question because he negotiated on the contract with JS Link.

Thanks, Pol. Paul, yes, obviously, the commercial arrangements with JS Link confidential. The $50 million obviously is not the full CapEx required for the site. But again, JS Link is probably better positioned to answer the total cost. And in terms of the pricing in the offtake, as you know, a 12-year offtake agreement, again, that's commercially sensitive. So we really can't go into those details. But the great thing is that JS Link has commenced acquiring the site, which is very close to the Quantum facility and are busy ordering equipment and progressing that project.

Okay. Maybe Chris, I know the JS Link is building a facility in the U.S. with a norm with POSCO and have a site and agreement already locked away in -- is that a facility you might get involved with in supply in the future? Is that sort of part of the bigger plan here? .

Potentially, Paul, yes, but obviously, that's subject to ongoing discussions with JS Link. So yes, watch this space.

Probably, there will be a press release from JS Link today or tomorrow. So we should let them disclose what they wish to disclose in terms of CapEx and planning for execution. But be aware that the Koreans go very fast. Most common word in Korean is Lipa li, which is quick, quick. And so aggressive as the scale looks like, they may be even better than this.

Okay. Pol, can I have one follow-up, please, just on magnets. And that is around Japanese magnet producers. If you could share with us around what the 4 magnet producers in Japan and their strategies are considering a few of them actually have facilities in China. We've got the November deadline coming on the China export controls which are more sort of somewhat set in stone. And so are you seeing any signs of the forward Japanese magnet producers looking to actually get on with and actually expand their facilities in Japan?

Well, I haven't gone to Japan for a while, but follow from a distance. And again, Chris was in Japan last week, so he can add to my point. What I know is especially some magnet makers are really concerned in Japan about their challenge of sourcing heavy rares from [indiscernible]. And so that -- that is the reason why we, Lynas, need to accelerate as fast as possible in increasing our production in premium for them. There was an [indiscernible] share for you.

No, great discussions in Japan. I think that the key is that the Gare offtake and a agreement that we've agreed with Japan. It is critical to supporting those Japanese magnet makers with committed volume of light and heavy rare earths. And that really then supports Japanese industry with the volumes they did. So as Pol said, massive focus on ramping our heavy rare earth capacity to meet those demands, but there is some protection for Japan through that Gare offtake.

We will try going back to Chen Jiang from Bank of America.

So based on the heavy rare expansion project. Thanks for providing the commencement. I mean the timing for [indiscernible]. How about this terbium last year in your release, you have 250 DY and 50 metric ton per annum of TB, when are we going to say that expansion. I'm not talking about the current rares. It's referring to your expansion DNT. If you can provide timing and color on that?

So as I said, if we had 250 tons of disposium feedstock, we would produce 250 tonnes of pure disposium. So what was probably misunderstood is that initially, we thought of going step-by-step and supply at small portion of DY disposium. And actually, we modify and the efficiency of the is said that we realized that we could produce tomorrow 50 tonnes of DY and 50 tonnes of terbium. If only we had this in the feedstock. So processing-wise, everything is ready. The key question is how and when we will increase the [indiscernible] in our feedstock. And for that, we are evaluating different options, and it's a bit too early for me to disclose our plan, but that's the emergency for us is our solution is only no more processing. .

Right. That's very helpful. So the constraint is of producing the heavy rare expansion, the capacities coming from upstream, which is [indiscernible] your dates kind of already competitive.

[indiscernible]

The next question comes from Jonathan Sharp from JPMorgan.

Yes, a follow-up question. My questions have been answered, but I'll just ask 1 on -- you're now producing DYB, you're going to be producing Serum and the other 3 rare earth products shortly soon. But I'm just interested in your thoughts, Pol, on where the tolerating is with these -- do you see there's direct product revenue margins? I get the feeling that there's quite a bit of value there with strategic customer relationships. Can you just talk to that for us and where you see the value?

Well, you can see in the numbers. We make -- there is quite some value in supplying separately heavy rather than doing what we were doing in the past was setting unseparated heavy compound separate companies in China. So that is where the margins lie for it. And I think for as long as and I expect this to last for quite a while, as long as those [indiscernible] are in shortage outside China, you will have lots of value in supplying separated rares. [indiscernible] currently, they are supplied finally by China. And so that's where the value lies. .

Okay. And just a follow-up. I mean is there extra MVP that can be sold with those contracts?

Well, we bind the [indiscernible] okay? And if you look at the -- the reason why you don't see more magnet capacity [indiscernible] outside China. And I've been frustrating with that for the last 16 years. Until recently, one of the key questions where people were not certain of the demand growth. I'm not certain that [indiscernible] would actually would be serious about securing at least part of the sourcing outside China. Now this point is gone. So it's a matter of getting the expertise because it is complex and Chinese are really the best on that. So you need to match the best competition technology from China. And the second is accessing [indiscernible]. And currently, the most critical is to secure DY termium because -- we have an EPR. We'll continue growing our production of PI. I explained I shared with you that I was a little bit frustrated for the quarter, but we know we have to go and get there, but we need to get more DY terbium the market leads us to produce more DY terbium that is essential. .

The next question is from Mitch Ryan at Jefferies.

I'm interested in the increased CapEx of the heavy rare earth project, which is obviously to allow increased purity and physical characteristics for your customers. mean you're producing individual SKUs of each heavy for each customer? And then how should we think about that with regards to operating costs.

That's a good question. It varies, I would say, I'll take an example, DY terbium for magnet that's a standard pack. Everyone buys the same. [indiscernible] also serve MLCC, which is micro capacities, which is a very important segment that not many people talk about. But here, definitely, you need to control your particle size, particular shape of your disposium, so you have a different grade. And because you have a different grade, it comes with different price as well. And same applies for itrium gadou, where we have a very standard and spec and especially Gado when it comes as a contributor to magnet making is a standard. But if you go into specific alloys, for instance, and coating, then you really need to address purity and the shape of it.

Again, there's different grades for several of these heavies more than in their lives, and they go together with different prices

Okay. So you'll potentially be able to attract a bigger premium by providing these smaller [indiscernible] clients. Is that correct to think about it?

Yes, absolutely. And that's the reason why we decided to move ahead and improved startup some equipment so that we can do that. .

The next question comes from Matthew Hope from Ord Minnett.

I just had another question on JS Link. Just wondering with the rare plans, when do you expect to begin supplying that and the other question I had is some they will presume that we need some disposing terbium their magnets. Do you have any capability to supply that over the Korea or is it all taken due to the check contact, or is it all taken by Japan?

No. We have agreements with Japan and we have agreements with JS Link. So their factory in Malaysia, basically let's say we start -- and it's a challenge to start new magnet factory in '28, I guess, calendar year. So we'll start supplying them with NdPr and DY terbium as they move up. And as I said -- as they grow, we also finalized an force to produce higher [indiscernible] ore. You may remember, and this is one among other things. But we have areas in Mt Weld.

Pol, you seem to have dropped your audio.

Hello, you can't hear me?

It is quite faint. If you could just try moving closer.

Can you hear me better?

Much better.

So I don't know from my answer. .

We started to drop out when I think you were saying there were higher areas of...

But that's it. That's one of the options. I mean, definitely, as I mentioned, we need to increase our [indiscernible] content in the feedstock and one option is to accelerate the mining activity in Mt Weld, but there are options as well. .

You're dropping out again. But I was just interested in the contract with JS Link. I understood you also had a contract to supply the Korean brand which is currently ramping up, as I understand it. So I was wondering when that feedstock was due to start and whether you actually had any disposing terbium to supply them given that contract is on all your disposing terbium, if I understood that agreement exactly?

Their Korean line is the small lines -- we are not talking about big numbers for supplying the Korean line. If I think of the in Malaysia, differently than in the U.S. Korean will probably turn into the plan than the commercial plans, [indiscernible]. .

The next question comes from Daniel Morgan from Barrenjoey.

Pol, just a question on CapEx for the heavies plant. You've said that the budget has increased to $294 million. I imagine that there was some that was spent in FY '26. How much is less from this point in time in FY '27 and beyond of that $294 million ?

I'm not 100% sure. I may ask Gaudenz for help. Two more of you. We have committed the moment around of it [indiscernible] FY '27. And cash wise, probably a lot will be spent in the beginning of '28. Gaudenz will have more precise numbers in front of him.

Yes. I think something in the annual report. But cash-wise, pretty little has been spent so far, probably on the commitment side, we are probably 20% in but that will grow pretty particularly over the next month. So at the moment, it's really, really active on the procurement side. But you will not -- there will not be a lot of cash flow in the past financial year. It's really heavily in '27 than '28 .

Okay. And just to clarify, this is the major capital spending commitment that the company is making right now in terms of projects. There's nothing material other sustaining. Correct? .

That is the end of the Q&A. I'll now hand back to Pol for closing remarks. .

Okay. Thank you very much, everyone. That was my friend representation of the quarterly results. I hope you got answers to your questions. And we'll have more review together for the yearly results announcement, which are being [indiscernible] at the moment. So it will be next month. And I look forward for a continuous discussion with all of you [indiscernible] thank you. .

That concludes today's call. Thank you for joining us. You may now log out.

Good day, and thank you for standing by. Welcome to the Lynas Quarterly Results Briefing [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Lynas. Please go ahead.

Good morning, and welcome to the Lynas Rare Earths Investor Briefing for the quarter ending 31 March 2026. Today's briefing will be presented by Amanda Lacaze, CEO and Managing Director. Joining Amanda on the call today are Gaudenz Sturzenegger, CFO; Pol Le Roux, COO; Daniel Havas, VP Strategy and Investor Relations; Chris Jenney, VP, Sales and Market Development; and Sarah Leonard, General Counsel and Company Secretary.

To Amanda to commence the briefing. Please go ahead, Amanda.

Thank you, Jen, and thank you, everyone, for joining us again this morning. Jen tells me that we've had people registered to ask questions about a quarter 2 midday. So on that basis, I will keep my comments to a minimum. So we have plenty of time to deal with the question. But just sort of a few general comments, I often say that we've had a very busy quarter and guess what, which has had a really busy quarter, actually maybe busier than most. We were very pleased with our progress during the March quarter. When we put in place a number of initiatives which will provide foundations for the future success of the business and improved resilience and also ran an operationally a good business in the meantime in terms of continuing to be the only non-Chinese producer at scale of both NdPr of lights and heavies.

So during the quarter, I mean, I think most people have observed that the price of NdPr has progressively firmed over the year. We certainly saw the benefits of that, and we recorded one of our top 3 of our quarters in terms of revenue. And it does appear that the market settings remain positive for the fourth quarter of this financial year. And in interest sort of looked back on the very first quarterly that I ever delivered and this puts into stark contrast, the difference between maybe businesses at the start of the journey in rare earth and where they may be some years later. The first quarterly that I was -- again delivered was 445 tonnes NdPr. Well, we delivered 2,000 tonnes this quarter. $31 million in revenue versus $265 million in revenue this quarter. So it's I think, a reminder of just sort of the various steps that we have taken over that period of time to consolidate our position as a global leader outside China.

Well, our production is not quite at our 10,500 tonnes per year run rate, but it is moving towards it. During the quarter, we have continued to ramp up the final part of the Mt Weld expansion. And I am delighted to say that we have that ramp-up so far is at or above a McNulty 1 ramp-up curve. And I think that's the first in rare earth. But even with that, there are still some challenges as we bought that facility online, ensuring that like in the early stages, con grade was lower than it had been in a nice mature little old plant. And so the team has been working on that, and they've lifted that up, but that did give us a few challenges downstream. And we've had a few logistics challenges, but I'm sure that many of you on this call who have listened to any sort of results call would recognize that logistics has its own set of challenges at present.

Heavy rare earth production, that's really the performance during this quarter just reflects the batch processing nature of our heavies at this stage. And for those of you who've been up to the lab, you will have seen that the -- we're packaging this in 25-kilo drums and you will have seen the small furnace that we use. And so we accumulate material. We run it through on a batch process. And so therefore, there's a bit more lumpiness in our production outcomes.

However, suffice to say that within sort of our sales process, with respect to the heavies, we are having a great deal of success in being able to place us carefully and leverage full benefit from those sales. Of course, our sales outcome, the total revenue was very pleasing. I've seen some comments already on the sort of the price per kilo. And of course, we aim to make that clear within the report that, that reflected primarily product mix with some higher sales of lower-value La and Ce during the time. And the comparison on the NdPr is, of course, that we sell our NdPr on contracts. And with many of those, there's about a 1-month lag until we see sort of the price flow through into our revenue due to the nature of the contract.

Costs remain tightly controlled, and notwithstanding we have indicated in this that we would expect that there may be some further influences from the conflict in the Middle East. This could sort of will likely reflect those materials, which are sort of directly affected by oil and gas, but also just looking at things like, for example, the Fair Work determination last night on ensuring that transport providers are able to recover costs, increased cost from fuel as a consequence of the Middle East conflict.

However, I would point to you something of which we are enormously proud and that is, as we have moved to our hybrid renewable power station at Mt Weld that our diesel use now is on -- is virtually only in the mining fleet at the Mt Weld side. And the renewable power station is actually delivering significantly more than design where we're expecting renewables to be delivering around about 70% about our power requirement and the average renewable content was 95.7%. That is 870,000 liters of diesel saved just during the March quarter. So this does put us in a much better position as we're looking at sort of the various global effects at present.

It's a pretty exciting quarter in terms of putting together a number of the long-term building blocks for our company. The JARE offtake agreement, which was announced on the 10th of March is really significant. And I think everybody has read that in some detail by now, but firm offtake with a small price is really important to us, an upside sharing arrangement, which is, we believe, relatively modest, although beneficial to both parties and we are sort of seeing this is really a really solid base for the business as it moves forward.

Followed that up with an MoU on merging alongside our Japanese partners on further resource development, either at Mt Weld or other resources, and this is our work with JARE and JOGMEC on resource development has proven to be very constructive for our company over time, and we look forward to pursuing that further.

And in addition, we announced the U.S. letter of intent -- binding letter of intent with the U.S. government, which sees the funding, which was previously allocated to Seadrift being reallocated to the purchase of rare products from our existing and planned facilities. And then, of course, as we have indicated previously, we are focused on developing strong and constructive partnerships with respect to metal and magnet making our key announcements there during the quarter as both related to Korean firms who we see as being potentially extremely good partners technically and also in terms of efficiency and economic outcomes. So LS Cable for metal making at their Vietnam plant and continued work to move to definitive agreements with JS Link for the new Magnet facility in Malaysia.

So all in all, as I said, a very busy quarter where we focused on running a good business, continuing to take full advantage of the fact that we are the only ones who can take full advantage of the positive market at present. But at the same time, ensuring that we're setting ourselves up for success including with the sort of agreements, the agreements with both Japan and the U.S. the development of new capability and also within our sales group. So within our sales team, ensuring that we're setting up a customer portfolio, which will serve us well in the future and ensure that we leverage full benefit from our bundled sales.

And of course, the final and really significant point also which sort of underpins the ongoing success of the business is the new license, which was renewed in Malaysia. Our operating license was renewed for 10 years from the third of March. We have been advocating for some time for an extended license rather than the 3-year license period on which we have operated to date. That requires a change to the AELA, the Atomic Energy Licensing Act in Malaysia, which was affected late last year and was then under that -- those varied conditions is the issuance of this 10-year license. It certainly, we're very pleased with that. We remain strongly committed to Malaysia, which has proven notwithstanding few twists and turns to be a very productive environment in which Lynas has operated.

So having got to there. I'm really happy to take any questions now. And I think, Jen, are you the one sorting those out?

No. Maggie is going to open up for questions now.

Back to you, Maggie, then.

[Operator Instructions] First question comes from Rahul Anand from Morgan Stanley.

Amanda and team, thank you for the call. Appreciate it. Look, my one question would be around Kalgoorlie. If you can please provide a bit of an update in terms of power reliability there. Is that fully remediated now at Kal? And are there any risks into the fourth quarter as we step into that just in terms of MREC availability?

Thanks, Rahul. So since the really very serious situation towards the end of last year, we did engage very effectively, I believe, with Western Power and a couple of issues as it turned out, we're probably affecting power availability in a way that they didn't need to. And so we have had relatively stable power within the ELPS sort of framework through this quarter. It has not had the same effect on operational availability, uptime that we had seen, particularly in the previous quarter. I'm loathed to make a forecast on power in Kalgoorlie because as we have indicated previously, in Kalgoorlie, there is both a problem that she sort of the power available and also with some elements of the distribution network when everything's going well, this is not an issue, but I wouldn't want to be forecasting that everything will remain operating perfectly. I mean, I think everyone will remember the power being taken out by the lightning strikes on the transmission line -- transmission towers. So we continue to work on sort of alternatives.

We have not taken the step of putting in place a diesel power station, because as I noted in my comments, we're pretty proud to make some significant savings on diesel at Mt Weld. However, even on the stated plan with respect to the network, we would see that the lead times to really making a significant change in power availability in Kalgoorlie as such that it is prudent for us to consider alternate solutions. But right now, we are not forecasting a problem in this quarter, touch wood, but I'm loathe to make any sort of definitive assertions on that basis.

Okay, I understand. So I guess, tactically, it's quite hard to make a call on availability. But given that needs to be in your plans in terms of having reliable power going forward. Is there any time frame whereby you want to decide that and then flag that to the market so that there's clear visibility in terms of when you're planning to build a power plant?

No, I don't want to make any further comment on it at this stage.

Next, we have Paul Young from Goldman Sachs.

Amanda, good progress for the quarter as you stated in Mt Weld's ramping up and tracking well. And I saw you're on top of the improved removal at Kalgoorlie which is fantastic as well. But just a question on potential shortage of chemicals in particular, sulfuric acid. Can you talk through your security of supply and maybe some of the cost sensitivities. And I'm noting I think you use somewhere between 1 to 2 tons of acid for every tonne of concentrate cracked and leached?

Yes. Good question, Paul, and one which has our team highly exercised at present. Which, I'm sure, is the same came with most supply chain teams across the industry. So if I start first with Australia. We source -- we do not have an issue with supply in Australia at present, and we have some options for access locally, which we think is going to ensure that we're in a good position at least through to the end of the year. So the issue becomes more of an issue in Malaysia, not in Australia. And last week, I did get a few sort of inquiries when the Chinese put out an announcement that they would not be exporting acid. Well, we don't source any of our acids from China, so that's okay. The market is tight, but we're pretty confident about our ability to get the volume.

So the effect will be a price effect and I think as everybody knows, that's a day-to-day event. And so we're managing that, but we would expect that sulfuric alongside some of the other sort of transport cost increases, et cetera, will make it a little more challenging for us in terms of costs in the fourth quarter, but we are all over it at present. And once again, sort of loathed to give you a forecast because as I think everyone knows, it is changing on a daily basis, but we would expect there will be some cost impacts in the fourth quarter.

Next, we have Neal Dingmann from William Blair.

My question is around the MoU you have with JARE. I'm just wondering, how should we think about the timing of the mineral exploration around this MOU? And I'm also wondering, you didn't mention in the release, if there any update on the MoU around with Noveon Magnetics?

Neal, welcome to the call. The MoU with respect to the development and the cooperation on other resource development, I would expect that we will be in a position to provide an update on that sometime during this quarter, notwithstanding that sort of definitive agreements are not going to be a bottleneck on that. I mean we have a long trusted relationship and we find, particularly in terms of resource development, geology, metallurgy that we have higher complementary skills. So yes, we think that we will be able to give you a little more on that in the coming quarter. And I'm sorry, the line branch has got cut here, I missed what was your second part of the question?

Just any update on the Noveon Magnetics MOU if there's anything going on there?

Look, our teams are engaged there, Noveon did a further -- I think during the quarter or maybe late last quarter, did a further capital raise themselves and have a particular they're sort of completing their own internal business planning. To my understanding, we continue to work with them and particularly on offtake agreements to ensure that we are supplying relative material for some of the sort of highest priority customers. But I'll invite Chris Jenney who's on the call to add anything if there's anything there.

No, nothing to add, Amanda, Yes. So obviously, there's lots of moving parts in the U.S. market. So we're just working very closely with the team at Noveon to work out the best offtake arrangements to meet their needs and obviously, to meet our needs. So we'll just give you updates as we progress through that.

Next, we have Chen Jiang from Bank of America.

I hope this is not the last time we speak to you on the results analyst call. First question just on this quarter's NdPr production. If I do the run rate or annualize this quarter's NdPr, it gives me roughly 8,000 tonnes of NdPr or roughly 22 metric tonnes per day of NdPr. That is likely to be 75% of your current NdPr annual capacity of 10.5. So I'm just wondering, I think previously, you mentioned a run rate of like 25 metric tonnes a day of NdPr. I'm just wondering what's the best way to think of your production versus capacity is 75% utilization rate we should apply or it should be higher. I guess the question harder. I'm just trying to get what kind of production going forward versus your current capacity of 10.5.

Thanks, Chen. And I think as with all of these elements, as we've always indicated, the bottleneck tends to move around. We're a bit different from many mining companies. We have capacity at Mt Weld, at Kalgoorlie and then also at the LAMPS facility and each can be at a different stage. You're right. The annualized run rate at present is about 8,000 tonnes per annum. It would be our intention that, that is, again, in the coming financial year and the dependencies for that are partly the continued ramp-up bear in mind that we're only today, 6 months into the ramp-up of a big facility at Mt Weld. And so we're -- as I indicated, we didn't have an issue with the volume of material, but the con grade dropped a bit, which absolutely has an effect on downstream production. But I think that certainly, our objective would be to be moving up beyond the 25 tonnes per day. But maybe we're still sort of another year into consistent ramp-up right across the system to deliver that 10,500 tonnes.

Pol, did you want to add anything to that?

Yes. Can you hear me?

Yes.

Okay. Good. Yes, it's a good approach to address the nameplate capacity as tonnes per day. So we are way higher than what you can see in our numbers in terms of downstream daily capacity. And then you have two factors to take into account. One is a normal operation, you always face problems from time to time. So you have what we call OE, overall equipment efficiency, which is reflective of any failure you can have on equipment. So that's an 80% to 90% normal ratio. And then you have specific, as Amanda said, specific challenges for us is to adjust align the ramp-up of Mt Weld, Kalgoorlie and all the processes here in LAMPS. So -- but we're moving forward, it's in close to having an easier to forecast volume for easier to forecast.

So the short answer, I mean, 25 tonnes a day will be the next sort of stop on the bus route, and then we will keep on moving from there.

Right. So you are still ramping up. Okay.

We are still ramping up.

Yes. Got it. Can we have another follow-up of your price realization? So by looking at the China NdPr benchmark, quarter-over-quarter, it's a significant increase, almost 40% from USD 68 kilogram average in December quarter to USD 94 per kilogram in March quarter, excluding that, of course. But Lynas NdPr selling price is only up 25% quarter-over-quarter. So I'm wondering why -- or what I'm missing, why Lynas NdPr selling price is not increasing to the same scale to the index pricing in the March quarter? I understand some of your volumes are independent, but the price flow are still higher than index pricing. Is there any lagging or what I'm missing?

Yes, yes. So I did actually try to explain that, Chen. We have our largest customers are on contracts, which referred to the prior month's pricing. So -- and I think we've tried to explain this previously. So on the way up, it lags, but on the way back down, it also lags. So generally about sort of a month lag by virtue of the fact that we are not selling into the spot market, and that's not ever our intention.

Next, we have Daniel Morgan from Barrenjoey.

Just a follow-up on price basically or revenue. Can you help us in some way with the mix? I mean, you've highlighted quite clearly you did have a lower sales mix of high-value products. Just wondering if in any way you could give us a feel for how big the NdPr inventory build in the period was? And did you sell any Dy Tb and was there any marketing motivation behind the sales mix at all?

Okay. So no, we didn't build significant inventory the sort of final numbers on sales often depend upon how many ships sale in the last week of the month. So if they didn't go at the end of the month, they've gone in the first week of April, say, for example. So no significant inventory build. Yes, more sales of La and Ce. And given that they are high volume, low price, they can -- they have an effect on that average selling price of limited sales of the heavies. And we are using our heavies very strategically. We -- we've talked about this previously, but we seek at all times to be in the business of long-term relationships with our customers. We don't sell into the spot market.

We also don't sell our heavies just because somebody wants to buy a few heavies from us but don't have a broader relationship with us. So we bundle our heavies with other material and so our heavies sales and inventory management is managed in such a way that we can serve our customers say, for example, in the magnet market with sort of a magnet ratio of NdPr to Dy, Tb, something like 30:1. So the heavies are used strategically. And I think as we've talked previously, yes, they deliver margin in their own right, but it still remains that the Lynas cake is in the NdPr and the icing is the heavies. And so we continue to work on that basis.

Next question comes from Reg Spencer from Canaccord Genuity.

Most of my questions have been answered already. So I'm going to go somewhere where I'm not sure how you'll answer it. But clearly, there's been some M&A in the rare earth sector overnight, Amanda. And I'm certainly not expecting you guys to provide any comment on what your M&A strategy is. But when could we expect some further detail around plans for your Malaysian clay assets or your joint venture?

So we are working through the definitive documents on the magnet factory with JS Link and hopefully, we'll be able to provide sort of additional information on that relatively soon. I mean with all of these things, it's always the case that we actually have to -- we can only control our position. I mean, negotiation is a negotiation. However, we are comfortable that project is proceeding, that material relevant equipment is being ordered, particularly the long lead time equipment and we're feeling very, very confident about that. With respect to the ionic clay assets, I think that as we work through right back at the beginning when we were talking about the JARE MoU, we will provide a bit more information on some of that resource work we're doing over the next couple of quarters, I would expect.

And yes, there's lots of happy investment bankers in the world these days, aren't there? Lots of deals to be done sort of big numbers. I just would highlight the fact that we are the only ones bringing 2,000 tonnes of NdPr and Dy and Tb and now samarium to the market every quarter. And so we will continue to focus on ensuring that we have a strong position in the rare earths market.

Can I ask a cheeky very quick second question, Amanda. And again, feel free not to answer it. But do you see increasing competitive tension given, obviously, the strategic importance being played from assets, especially those with enriched heavy content. Do you see evidence of that and in all of the conversations, I assume you have?

I think that we have a very -- we know the various projects well, and we have a clear understanding of the potential and I think I might leave it at that.

That's more than I was expecting. Thanks, Amanda. Appreciate it.

Next, we have Austin Yun from Macquarie.

Just one more question on Kalgoorlie. Great to see that you finished the ramp-up of the recent process improvement I'm just keen to understand, do you have any other process improvement plan for the Kalgoorlie facility in this calendar year? And also given the tightness in the chemicals, would you actually pace the ramp-up of Kalgoorlie, given the sulfuric acid and other things, the price is going up. I understand there's no supply challenges at the moment.

Thanks, Austin. Look, the answer to the first part of your question is we are always improving the process at every facility, right? So we are not done with process improvements at Kalgoorlie, not by a long shot. What we are flagging there is that we've done a couple of sort of major improvements in terms of process flow, some of the actual flow sheet that we've executed and that really has allowed us to step up. We look on a weekly basis, I look at it, sort of what Pol was talking to, which is the operational availability, which is really the reliability question and then also looking at quality and are we producing the quality, which is going to be able to be processed at the land cost effectively.

And as we indicated, sort of early on, we had some issues associated with that, which is perfectly reasonable and to be expected and we have addressed those issues. But we are never going to stop looking for ways to continue to improve both the process and the reliability of that process. We are still assessing what are the implications of some of the price effects from the Middle East conflict. We don't think that sulfuric acid is going to be the pain point in Kalgoorlie. But I'm sure many of you would have noted the determination from the Fair Work Commission last night, which indicated that we need to be working with our suppliers on a fortnightly basis to ensure that costs are being appropriately recovered. But at this stage, we are not seeing that this would lead us to make a decision to dial back the Kalgoorlie facility. We continue to work to actually ramp that up in terms of reliability and delivering to forecast.

Next, we have Jonathon Sharp from JPMorgan.

Yes. My one question, just as previously mentioned, an acquisition of Serra Verde overnight announced. Now there's reporting that there's some offtake of Dy and Tb floor prices $575 per kilo and just over $2,000 per kilo. This looks like it's about 2 to 3x spot. How do you view this floor pricing from Lynas' perspective maybe from what you're getting yourself?

There is a reason why we have not specifically disclosed either our floor prices or our achieved prices in this market. We actually think that this is an important part of our -- we think these are appropriate and commercial and confidence. The numbers need a surprise nor impress.

Next, we have Dim Ariyasinghe from UBS.

Most of my questions have been asked, but just one on what's to come on the downstream, which I think is pretty exciting. How do you think about metallization again through everything else you're doing with JS Link and then the Vietnam announcement earlier this quarter? Like is the plan to continue metallization in Vietnam or -- and build on that? Or how? Maybe you could expand a little bit on what that could look like?

Yes. Dim, nice to talk to you. And actually Chen, yes, this may be my last quarterly report. So hopefully, we will all talk to each other at some time before a shuffle off this Lynas coil. But Dim, yes, I think we've indicated this previously that we think that metal is a somewhat unloved part of the value chain, but a crucial part of the value chain. And so we are delighted that LS Cable, which is one of the largest cable sort of manufacturers in the world still many metal processes in the world has chosen to enter the rare market. This reflects sort of encouragement, particularly from the Korean government to improve resilience in Korea, whereas we know the key industries, automotive and electronics, both rely on rare earth and rare earth magnets.

The LS Cable facility into which this plant will be integrated is in Vietnam. And so we see that as being very positive in Vietnam. It is a cost environment which is constructive for the production of metals. And there is some sort of domestically developed capability there as well. But I think that we really see LS Cable as an outstanding partner for further development of metal making and we see that Vietnam is really sort of a critical step in the supply chain, not just with LS Cable, but with our current metal maker as well.

Next, we have Matt Hope from Ord Minnett.

Just my question was what was the motivation for having the MoU with JARE for exploration? I noticed that in your announcement, you even talked about exploration and development of Mt Weld. And I was wondering in what way would you want the Japanese actually involved in your sort of key mining asset.

Just so you may recall -- maybe you weren't [indiscernible]. But you may recall that actually in some of the work that we've done on the carbonate, we have had access to some really some additional and highly skilled resources from JOGMEC in terms of particularly geology and metallurgy. And they work with us to both fund some of the cost of the Mt Weld carbonatite program, but also had on-site working with our team, some really experts in these areas. We have found this to be very helpful for our business. Accessing that additional expertise, and we have an extremely productive relationship with JARE and JOGMEC and are happy to extend that into additional project work.

All right. Okay. So -- okay. So it's the expertise that they offer. And if I could just sneak one extra one in. I just wanted to know samarium, this seems that you've had a big priority on developing that at the moment. Is that really about price? Or is it a strategic rare earth that would allow you to sort of get involved with the U.S. and because this isn't something that nobody else produces. So is it really about strategy? Or is it about the price of samarium?

So samarium is an excellent case study of the dysfunction that has existed in the rare earth market, we probably kind of produced samarium earlier than we have done. We were certainly not motivated to produce samarium earlier because the price has been sitting at basically a couple of dollars a kilo. So like with lanthanum and cerium, where we sort of produce those say, selectively. I mean, at a couple of dollars a kilo, it didn't make sense financially for us to produce that material.

As certain customers of some of these materials have understood all of the things that everyone wanted to talk about over the last 2 or 3 years around supply chain, reliability, et cetera. They have actually indicated that, well, yes, they will be prepared to pay a price, which is a reasonable price that gives us a reasonable return or, in fact, a good return on our efforts. And so therefore, producing samarium to spec and in the volumes that the market requires, bearing in mind that we are not talking with any of these heavies about sort of the same sort of volumes as we get for our lights. But notwithstanding that, we now are in a position where it is commercially sensible for us to produce samarium. So therefore, we are producing samarium.

[Operator Instructions]

Maggie, if we run out of questions, we should come into the queue.

One more question, Amanda, one more. We have a follow-up from Austin Yun.

Just a quick follow-up. Really good news that you provide 2 offtake agreements updated during this quarter. I'm just keen to understand, given a large portion of your production is not covering those, is there any intention or interest to further expand your offtake portfolio both from a production perspective also from your geolocation customer perspective, conscious that you have Japan and covered U.S. coverage, but there's a big chunk of the world that's not covered yet.

Yes. Good question, Austin. I think that -- I think the best way to respond is that the sales team has a very clear plan on ensuring that over time, we sell our material. We continue to sell it on a contract basis. We don't engage in the spot market. but we ensure that we have a customer portfolio that ensures that we are capturing the highest value, highest margin customers. The government contracts are beneficial in terms of setting -- and the focus on customers and concluding customer-based agreements, remains the #1 priority for our business. It is way more important than any other mechanism that we might have, because we're just like every other business, you don't exist without customers.

The agreement with government, right? I really about sending a message with respect to market dynamics, I think everyone has that there is -- this market has been dysfunctional for some time. And I think that the government agreement helped to address that. And in a manner, we have advocated that these, if we have consistent amplification across those various agreements, that no government should ever actually have to write a check because the price naturally will move to that level. And we have seen some evidence of that. So the sales team's focus absolutely is on customers. We have excellent long-term agreements with a number of both magnet makers and magnet buyers, and we will remain focused on doing that with the government agreements essentially helping to address market dynamics.

We have one more question. Last question, follow-up from Chen Jiang from Bank of America.

I'll take my last chance, Amanda. So Amanda, as the CEO for Lynas over the last decade, and now we have 2.5 months left until the end of the current financial year. You are going to your next chapter of your life. I'm just wondering in your view, what can the CEO quality can lead Lynas to the next level of success, which is Lynas 2030 growth story, amid the backdrop of increasing geopolitical risk, supply chain development trying to decouple from China will remain dependent on China and Lynas rounding fully integrated rare mine oxide operations in Australia and Malaysia and your view what the Board is looking for and in your view?

Okay. So I can tell you my view, I can't speak on behalf of the Board now. And I would encourage you to speak to the Chairman to get that. I mean -- and my view is only sort of a view because much as I would love and for those of you who have known me for 12 years, would know that I actually love being the final decision, in this case. I will not be the final decision maker. I wish that I was though. I wish I could say to you, this is the sort of person that we would like to see, and this is who it is. But ultimately, it will not be my decision.

However, my experience of operating in Lynas is that we are -- the profile of the person to run an organization like Lynas with it stakeholder complexity process and processing complexity is maybe a little different from many of our other Australian enterprises. Certainly needs -- we operate with more risk in our environment than many Australian businesses who sort of run their operations and sell their materials inside Australia, we operate with sort of real global risk. And of course, I've been quite vocal previously about the fact that I would be delighted to see another woman appointed to this role. I think that we have made great strides in the mining industry in terms of bringing more women into the industry, but we are yet to get to the sort of many mining companies have targets of 30% or 40% women within their workforces, but we are yet to see that within the CEO ranks. And I would be very sad if my departure was the departure of present, the only woman other than Mrs. Reinhart as the owner, who is running a mining minerals company in Australia.

So those are some of the things that I think are important. But we are a complex business and we are subject to sort of external factors that don't necessarily affect all Australian businesses, and I think that needs to be taken into account as the Board sort of proceeds with the appointment of my successor. And I watch it kindly because I've spent 12 years of my life on this, and I hate it to fall in a screaming heap. But on the other hand, I also recognized that I can't actually control what happens after I leave. So it's been great. I have loved every day in my job, and I still do, but it is time for the transition. And I trust that our Chairman will ensure that an excellent appointment is made.

Thank you, Amanda. We have no more questions.

Okay. Well, thank you very much, and I do look forward to you. It's not quite the end of the road yet. As Chen said it's another 2.5 months. I expect that I will have a chance during that time to touch base with most of you on this call, and I look forward to doing so. So thank you very much and talk to you all soon. Bye.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Thank you for standing by, and welcome to the Lynas Rare Earths Half Year 2026 Results Briefing. [Operator Instructions] I would now like to hand the conference over to Lynas Rare Earths. Please go ahead.

Good morning, and welcome to the Lynas Rare Earths Investor Briefing for the half year ending 31 December 2025. Today's briefing will be presented by Amanda Lacaze, CEO and Managing Director; and joining Amanda today are Gaudenz Sturzenegger CFO, and Daniel Havas, VP, Strategy and Investor Relations; and Sarah Leonard, General Counsel and Company Secretary.

I'll now hand over to Amanda Lacaze. Please go ahead, Amanda.

Thanks, Jen, and good morning, everybody. Thank you all for joining today. I always think that it's a bit funny. You can see me, but I can't see you, but I hope that you're all well. And I'm pleased, incredibly pleased to be able to do this presentation. The first half of FY '26 has been one of those sort of half years where we were very busy but it's really only in retrospect that the scale of what we were able to achieve has been properly illustrated.

So look, I think it will be helpful to really step through the presentation that we launched today. We've got the obligatory disclaimers. And we have the important recognition of country. as an operator in Australia in the mining sector, acknowledging and respecting the traditional owners of the lands on which we live, work and meet across Australia is important, and in particular, acknowledging and valuing our Aboriginal and Torres Strait Islander employees, partners and communities.

So in the year to date, as I said, in the first 6 months of this year, we were busy. But as we look back on the revision, Gosh, we were really busy, many achievements. So for a long time, we've been talking to you about the Lynas 2025 capital projects. And during this first 6 months of this financial year, a lot of milestones have been achieved with respect to those. The Mt Weld expansion project has been largely commissioned with the new flotation circuit operating at 70% of nameplate. I know that oftentimes, it's sort of people will look at Mt Weld. And I'll just say, oh, well, we know the Mt Weld resource. We know the beneficiation circuit. All of this is pretty easy.

I just would like to remind everyone, this is a big, complex project. As big as many other mining firms in Australia who don't do any processing past that initial beneficiation. We've had to commission 3 new mills. We've got new processes. We've got significant investment. I'll talk a little bit more about water recycling. And so all of these things it has been a complex commissioning and process and ramp-up process. And I'm really pleased with the progress that the team has made, also a really important note is our 65-megawatt hybrid renewable power station is operational, and you can see some of the photos further on of the new wind turbines.

The ramp-up at Kalgoorlie continues. We've undertaken a number of process modifications there to improve its performance. And I think as everybody knows, it has not been without its challenges, both internally and most particularly externally, it's very difficult to run a big complex plant like Kalgoorlie without reliable power. In Malaysia, where I think that we often don't put quite as much focus as we're talking about these things. There's been significant changes implemented as part of Lynas 2025, the uplift in production capacity, the processing of carbonate and of course, the -- we had our first full 6 months of HR or a separation of dysprosium and terbium.

So having done all of those things, and we've drawn the line under the line is 2025 capital program. It's really about how we setting up the business for the next growth phase. And I we started with the capital raise. We've announced the larger separation facility that will go into Malaysia. We announced some elements of our contribution to continuing industry development, including in metal and magnets, but also in terms of resource development. So as we look at all of this, I am minding to remind everybody that this is complicated. And I think I have mentioned it previously, but I would recommend to any sort of observer of this market, a particular study done by engineer, Jen can provide information on this, but a consulting engineer on ramp-up curves for critical minerals.

And the fact that if you use McNulty, which is a 1 to 5 in rare earths outside China, you've never had anyone who's -- or even critical minerals projects generally. You've only had 1 or 2 projects, and this includes things like [Binani and nickel ] and as well as rare earth and a variety of other materials. It has ever come close to a McNulty 1 or 2, which is the this merge trouble-free ramp up. In other seconders Lynas has performed best. And we were in a McNulty 4 for ramp-up in Malaysia and then we jumped up to a McNulty 2 in around about 2016.

It is easy because we are an established player for people to think, oh, well, we've just brought on a new facility here and brought on a new facility there. And everything is fine. But I would just remind everybody of the complexity and the value that derives from the fact that we are an established and experienced operator and indeed have been able to bring our new assets online, not trouble free. That would not be fair to my operations team to say that but certainly in very good order, and we continue that ramp up as we speak. This is -- we continue to put safety at the heart of everything that we do.

And I was talking to our Board about this. And as we were thinking about how do we present some of the safety information. And I made the point that it's a little bit disappointing in some ways that we hardly ever spend any time on the safety slide externally. We spent a huge amount of time, however, on safety, on personnel and process safety inside the business. And I would also take this opportunity to remind everyone that Australian mining leads the world in terms of both our approach and our performance with respect to safety and other sustainability practices.

We're incredibly proud that the major maintenance that we undertook in Malaysia late in the second quarter, which involved over 30 subcontracting companies and 100,000 workhours was executed to schedule and without injury. We're incredibly proud that Mt Weld and Kalgoorlie employees achieved 12 months without any recordable injuries in December 2025. And as our project now move from commissioning to operations. We are very focused on our, Yes, We Care HSE strategy because, yes, we really do care that everybody goes home safely and well every day.

Then if we look at our financials, well, this is very pleasing for me as I made my last half year report to be able to report such an excellent result. I'm also a bit sad that the next CEO will get all of the second half glory because as we've foreshadowed in our announcement, we expect that the market settings will continue to be positive. And I think everyone who's been following lines for some time, would appreciate it. We are only company that can take full advantage of the positive market settings because we are the company that is operating and producing today, not just lights but also heavies.

So excellent performance on revenue, net profit after tax, EBITDA, all up. And of course, we had the big jump in cash and short-term deposits as a result of the capital raise, which is setting us up towards 2030. When we look at it operationally, and this is one of my favorite photos. And I think some folk have been in Malaysia in the last 6 months. Some would have seen this new part of our product finishing. And it is just beautiful, it's part of our uplifting capacity that we have available to us now in Malaysia.

So NDPR production was absolutely on track record 6 months until we hit the problems with power in Kalgoorlie. So we're just a little bit off. But -- and as you can see from this, we're starting to roll off in terms of sort of final payments related to the capital program of Lynas 2025. Looking at that sort of was a bit of history, we've just put in the half years since FY '20, you can see that we are sort of consistently increasing like on a rolling 12-month basis, we've certainly had and rightly so with all of the investment that we've made. We continue to set new production records.

As I say to our operations team every month should be a record, as we continue our ramp-up of the new facilities. And then, of course, you can also see the benefits that come from the increased benchmark selling price. So the benchmark is moving higher, but our internal measure is how much we can beat that benchmark by as a result of our efforts and our negotiations with various customers. The market generally is very constructive right now. As we've indicated, the price in just about 2025 was sitting -- for NdPr was sitting at $74 a kilo compared to 49% in December 2024. That price has continued to firm. And yesterday, we reached over the sort of magic $110 a kilo mark.

And this really reflects a number of things. It does reflect the government actions in which is really starting to reshape market. We are seeing governments Australia, Japan, EU and of course, the U.S. taking action to create a functional market, right? We have never asked for subsidies. But there is no question there has been market failure for many years in the rarest industry and enacting policies which ensure that the ensures that the market is funding properly, we think is really important. And as those policies are implemented and the market responds then the potential cost to government just goes down like at present, as the price sits above the $110 NdPr floor price, I'm sure the U.S. government is feeling very relaxed.

We continue to be engaged closely with relevant governments and I'm sure many people would have read various articles on the likelihood of government other than the U.S. government also putting in place policy measures to facilitate a proper functioning market. So for us, huge opportunities. We make lots of NdPr, and we make now Dy and Tb. These are the products in greatest demand in terms of total volume. And we will shortly the producing some other materials, particularly Simaria, which we expect to come through before the end of this financial year. I was hoping so -- and then it will follow up with gadolinium and Intrum and then other elements as we bring our new production facility in Malaysia online.

Japanese magnet makers are winning new business. Ex China Magnet buyers are seeking direct supply to mitigate supply chain risks. As recently as yesterday, we had Chinese indicating further controls on materials to be exported to Japan. We have a very long-standing and productive relationship with our Japanese customers, and this certainly provides an opportunity for Lynas. And we are seeing significant demand for our bundled lights and heavies sort of being able to sell these together in the ratio that customers require them gives us a significant competitive advantage in the market. So we this says we can capture value. We are capturing value from the current market upside. Yes, then just everyone can step I love this picture of Matt well. We've gone from this tiny baby, little sort of concentrator, which is sitting sort of in the sort of top right-hand corner there below the process water pond, only top left, I think it's quite helpful for people to see.

Those are our tailings dams. As you can see, it's -- they're like a beautifully sort of plowed field, not ready to be sown with wheat, but certainly ready to be remined and put back through our processing facility. Some of the elements of the new beneficiation plant means that we will be able to liberate some of the materials, which we did not recover in the first instance. And in those tailings dams facilities we've actually been able to track the rare earths concentration at somewhere around about 77.5%, which means that in and of itself a highly valuable mineral resource.

Kalgoorlie continues to ramp up -- sorry, I missed, no, Jen, you can go back. You can see 3 of our 4 wind turbines there. This is just terrific. We are so pleased with the new power station. It is not cheap. And I do get frustrated when people talk about how sort of the unit cost of a kilowatt hour of renewable power is cheaper than any other option. That's true. But only after that, you've covered the capital cost of the 4 wind turbines and 2,500 solar panels and the gas turbines, which need to be there to provide baseload power and the batteries as well. Having said that, it is true that on a variable cost basis, we now have electricity, which is significantly less costly than our previous diesel power station.

But more importantly, we are really, really pleased that we've been producing, in December, 92% of our power has come from renewable electricity. The wind at night has been better -- a better source of power than we were expecting. And the power station is performing better than our initial target of 70% renewable content. So really very excited about that. And the second really significant initiative as part of the Mt Weld expansion is commissioning of some of the new water treatment facilities with our objective to achieve 90% of our tailings water to be recycled. We've been able to demonstrate that we're not yet reliably, sort of delivering at that level, but we are confident that we will get there.

And then Kalgoorlie. Kalgoorlie, I think I've said previously, we need to recognize there are 2 parts. Cracking and leaching, but -- we have many skills when it comes to sort of cracking rare earths ore in our company and the cracking and leaching path of Kalgoorlie is actually running pretty well, notwithstanding the outrageous, frankly, power disruptions that we had during the second quarter.

The mix -- the carbonation circuit, as with all new processes, we've found as we've ramped it up that bottlenecks move around and that we need to enhance or improve certain processes, and we are doing that in a very managed and measured way, just like we did when -- really when we were ramping up the lab 10 years ago. And so Kalgoorlie continues to improve, but not yet where we would like it to -- quite yet where we would like it to be on a long-term basis.

And then Lynas Malaysia is once again not giving me any sleepless nights at all. The Malaysian plant is running extraordinarily well, the particularly, we're seeing the benefits of the major maintenance on the cracking plant in the second quarter, it's running better than it has ever run in its life. The new separation circuits are stable and producing. And really, it's just a case of can we keep feedstock at the sort of rates that we want them to. I think as we said, we produced Dy, Tb last year, and we've announced the new expansion, heavy rare earths expansion plan, and we expect Samarium production soon-ish. So all looking very good in Malaysia as well.

In the U.S., the U.S. has -- well, boy, is the U.S. government really sort of discovered rare earths. We have the continuing discussions with the U.S. government, particularly with respect to an octane agreement, which is acceptable to us. Having said that, our engagement with particularly U.S. defense industries is really strong. And we are selling material into U.S. defense industries at very pleasing prices. We've also taken the opportunity to do a little brand promotion, I thought everyone would like to see. Our billboards as they were in various locations in Washington.

So just, Jen, moving on to the next one. I've really already talked about the hybrid power station and okay. Now we'll live on to communities. And I think everybody who has even spent a few minutes with me over the years knows my view, Which is that we cannot prosper if the communities in which we operate do not prosper as well. So in each and every one of our locations, we are incredibly connected to community. We think that it is a really important part of our success and also our culture. And I look at the faces whenever we have these photos, look at the people that -- our people who are engaged in community events.

And I'm just really proud of them and really proud of the contribution that we make to improving the lives of the people who both work for us, but also their families and their community. So with that, I am very happy to -- yes, then we got the stuff about people. Then I'm really happy to take questions.

[Operator Instructions] Your first question comes from Rahul Anand with Morgan Stanley.

Amanda and team, thanks for the call and the update. I just wanted to ask a question on sort of how you're going with securing that ionic clay deposit or supply from Malaysia for the HRE plant? And I guess how much can you produce from the plant currently in terms of yttrium, dysprosium and terbium if you're only using the Mt Weld feed?

So we can't produce anything from the plant yet because it's not actually constructed. So we do just have our small little circuit, but -- which is just doing the Dy and Tb, right now, we will have some samarium come out, but that's actually not from the ultimate facility. We're doing that via a bit of flow sheet development within our normal operations. We are working closely with a number of firms in Malaysia on working through the ionic clay development with the objective that we will have that as feedstock at the same time as we're bringing that new plant online, which we expect to be towards the end of calendar year '27.

Yes. So my question was related to the new plant, Amanda. But I guess just as a follow-up, if there is at all a restriction from China in terms of, I guess, IAC leaching reagents or SX chemicals. Is there a contingency plan? Or can you source them elsewhere as well on that...

We've already done that. We've already put in place contingency plans for all reactions and all equipment, which is required in Malaysia. We've been working on that since well, actually since before the initial issues in April last year, but certainly since that time. And so when we started last April, there was a couple of critical path items. We have identified alternate sources for those items. And we are confident about our ability to continue to operate. But the point that you're making about sort of availability of reagents equipment and expertise out of China is an important one and is another reason why lines in such a strong position to take advantage of current market dynamics compared to other firms.

Your next question comes from Neal Dingmann with William Blair.

Amanda, a quick question. Could you talk a little bit about offtake agreements? Maybe even including, I know with [indiscernible] you have the MOU, so I'm just wondering, it seems like, again, now that you are cranking up production, I would assume everybody is sort of knocking at your door.

Of course, sometimes we knock at their doors. Certainly, our objective is to ensure that we have ultimately that we have 100% of our offtake contracted to the highest value customers in the market. our ability to be able to sell bundles of NdPr and Dy and/or Tb certainly gives us the opportunity to be able to capture as said, the highest value customers and we're confident that as we ramp up over the next 3 years as some of the downstream capability outside China downstream capability comes online, but we will be able to place 100% of our material outside China. Having said that, China is the largest rare earths market in the world, and we're happy to participate in the Chinese market as well. .

Just remind me on that, what's your capacity on the heavies, can you remind me again?

Well, at present, we haven't provided explicit capacity on Dy and Tb because it's a bit of an opportunity sort of circuit that we've put in place. But on the -- we have provided that and actually probably be best if I point to Daniel to give that sort of data. But at present, if you take our production stats that we provided as part of the quarterly report, for the first 6 months, that's probably a reasonable sort of an indication. Daniel, did you want to add anything to that?

Well, the current circuit is doing -- has the capacity of 1,500 tonnes throughput. But as Amanda points out, we've not provided guidance on the breakdown of the Dy and Tb coming out of that. The new facility will allow us to have 5,000 tonnes of throughput. And the figures were outlined in the release when we announced the heavy circuit -- sorry, the heaviest facility that we're putting into Malaysia.

Your next question comes from Austin Yun with Macquarie.

Just first question is on the cost side. came to understand what's driving the rise in the general mine costs in this period. Also, understand how should we think about the depreciation charges given the run rate is ramping up at Kalgoorlie.

Sorry, Austin, what was the second part of that question, I just missed it. .

Sorry. The second part is on the depreciation charges.

Depreciation?

Yes. The first one is on general and the mix.

Okay. So I'm just going to ask Gaudenz to deal with both Part A and Part B, Gaudenz.

Yes, everybody. Hello, Austin. Thank you for the question. I think the first one, I understood was a G&A question. The other one was a depreciation question. On G&A, I think if you go a little bit to Note 10 which -- and note 2, which note 2 in this case. I think a bigger portion of the increase is related to not absorbed in depreciation and employment cost charges, which relate to Karl. So we are not yet running at the run rate we are planning. .

So that has impacted about $20 million, $25 million on this. And on depreciation level, I think here, important to go back to our main projects we have -- we had. I think it's $800-plus million on Karl, $550 million for the Mt Weld expansion. And most of this has been capitalized before. So you will see now the impact on the depreciation side. There is a smaller portion, $100 million, $200 million, which is still to be capitalized in Mt Weld expansion, which should happen in this quarter.

So I think it's a pretty solid base. You have seen there. There's probably a little bit more due to the second phase of the month. But fundamentally, it's just the $1 million, $1.5 billion, which are coming into operation and where we had the capitalization event. I hope that helps.

Yes, sure. So the depreciation charges will be even higher in the second half, potentially given the impact.

Yes, exactly.

Okay. Just a second question is on Hague. Amanda, you mentioned that you kind of in the ramp-up and the bottleneck is sort of shifting, I'm just keen to understand your operating model plan for this plant in the next 12 months. Are we still expecting a batch operating model or would you aim to switch to continue towards the end of this calendar year?

At present, we aim to -- at present, Kalgoorlie is extra capacity to the baseload in Malaysia. And so we manage production to that. And so that's not hard to work that out. We added 50% capacity downstream. So base load comes out of cracking in Malaysia, plus half of that, again, coming out of Kalgoorlie. And we'll just manage it whether it's sort of a decisions on batching or continuous operation for longer batches, I guess that they're just operational decisions that we will make on what's the best operating and financial outcome. .

Your next question comes from Chen Jiang with Bank of America.

Thank you for all the color on the rare earths market and comments about your sales in the presentation. First question, I'm just trying to understand your comments about Lynas continue to optimize your sales model, direct contracting? And also you have ongoing negotiation offtake agreement with U.S. government. What's going to change going forward, especially for your 7,500 tonnes per annum NdPr priority sales to Japan.

And because you're ramping up, there will be incremental sales in Japan. I guess, given -- how should we think about your pricing mechanism for NdPr because as you mentioned in the call, China and NdPr price is $19 or 17% above the price floor. So I guess, you are getting that USD 120 per kilogram higher than price floor or you can beat that benchmark for NdPr. So thank you, Amanda.

I say you've answered all your own questions, Chen. Yet our job. The sales job and the sales measure that our head of sales provides to me on a monthly basis is what percentage above the equivalent benchmark rate are we achieving in terms of price. And we do achieve a premium versus the benchmark. It is different customer by customer for customer-specific reasons. And we don't provide sort of detail on all of our customer contracts, which wouldn't surprise you. I mean, they're commercial and confidence and really such an important driver in our business.

So we do still have, however, we have subcontracts, which have floors and ceilings and the ceilings sometimes can be lower than market price. But we've made a decision that made sense when we put those contracts in place. We have other contracts, which are just pegged to the market price. So the price goes up, we make more money. And then we have increasingly longer-term contracts and our discussion with all of particularly magnet buyers is that we're not interested in short-term contracts.

We're interested in long-term contracts, which properly reflect the value of the materials that we produce. So we -- we've always said this that we have a variety of different pricing mechanisms and the task of our sales team is to optimize that to give us the best possible return. And really a key measure on that is how much value are they adding which is the size of the premium versus the benchmark, [indiscernible] really good right now, as you can see.

Yes, yes. I guess for your priority sale to Japan versus ex Japan, you would get a better price ex Japan. Is my understanding correct?

We seek to get the best price in every instance, which is the right price for our customers and the right price for us. We have a very long-standing relationship with our Japanese customers. we have commitments, which are mutual commitments as far as those contracts are concerned. But I think that trying -- I understand why you are asking this and you're trying to deconstruct our revenue line.

I'm not going to even give you bread crumbs to be able to do that because the way that we deal with our customers is an important part of adding value in our business. And I don't want to be constructing the way that we deliver the final outcome. The issue is are we continuing to drive extra growth from our business. And are we driving that growth from a combination of volume and price. And I think that our results tell you that we are doing that.

Sure. I understand. Just a second question on your balance sheet. So I guess you have over $1 billion cash sitting there from the equity you raised last year, now thinking of the incoming operating cash flow over the next 12 months, given NdPr price is so high and you continue to ramp up production.

So you will have a lot of cash printing over the next months. But your FY '26 CapEx kind of guided last year, $160 million. So how should I think about your CapEx profile? I guess you won't keep the cash. How should I think about your CapEx profile and your organic growth over the next, I guess, near term or medium term?

Thanks, Chen. So I think the first thing is that we did -- if we separate these 2 things and actually, we do separate these 2 buckets of money and even on -- yes, we still do a weekly forecast, and we separate these 2 buckets of money. We manage to the ex capital raise bucket. So really, what are we doing in terms of generating cash from operations and improving our position there. And that is really because it remains my heart desire that we are able to return some of that capital to our shareholders. .

The second piece, which we manage as a separate sort of bucket of money is the money that we raised for the towards 2030 growth initiatives. And we will spend that money on those initiatives. So far, we have announced the $180 million, which is for the new HRE plant in Malaysia, as well as that, we are progressing rapidly on detailed documentation around things like the JS Link Magnet factory in Malaysia, and we will be making further investments in terms of resource development, once again, particularly in Malaysia.

So that way that we are thinking about this with the objective that as we continue to generate more cash out of the business that we manage that accordingly and we have the ability to make a decision on how and at what time and in what form might that be returned to shareholders, recognizing that we are still a growth business. The capital that we raised in August actually underpins our growth capability, and we'll continue to do so.

Your next question comes from Jonathan Sharp with JPMorgan.

Congratulations on the good results. Nice to see those NdPr prices coming up. First question, just on the towards 2030 5-year growth strategy. which one of the pillars is increasing capacity. But my question is, will this include expanding NdPr capacity at some point beyond 12,000 tonnes per annum. I understand that you're currently embedding the expansion that you've just done and some -- but yes, will it include expanding beyond the 12,000 tonnes per annum.

And if I'm correct my understanding is there's a pathway to an additional 2.4 kilotonnes per annum at the concentrator, which was previously disclosed. You have the capacity of cracking and leaching once cow's ramped up. And I would imagine the ability to expand solvent extraction is there with not too much capital. So really, my question is, why not expand further beyond 12,000, even if that's after 2030? Or is it more to do with the market being there to sell into?

Thanks for the question, Jonathan, and welcome, I see that you're now here [indiscernible]. So yes, we will consider expansions beyond the current -- well, we've got -- we've said in the -- towards 2030, like today, we got 10.5. We've said the stepping up to 12 is sort of a bit of a no-brainer. There are, however, some more substantial investments required to take it beyond that, but we know what they are.

Some are at Mt Weld, and some will actually be in Malaysia. You're right about our ability to be able to increase throughput and solvent extraction very cost effectively. But bear in mind, we just put on about 50% capacity increase in solvent extraction without a really serious price tag attached to it. The next step is going to have a few more costs associated with it. And some of those are going to be related to utilities and other management capabilities in Malaysia.

The team is working on that. We expect over the 5-year period, yes, we will have placed 100% of what we produce outside China, and we will be looking for more production. And so therefore, we will be looking to drive production higher, but we don't have the precise plan on how all the bits of the jigsaw fit together to do that quite yet.

Okay. And maybe just to dig in a little bit more on that. Would it be right to do 14,000 tonnes per annum to 2030. Or is there a number that you could give us?

As you've noted, Jonathan, we have identified 2,400 tonne uplift that would come out of Mt Weld. And we've previously identified that, that's available and maybe towards -- I would think that our ability to place all of our NdPr outside China is dependent upon the speed with which the downstream industry develops. .

And so I think there's something like 7 different bank projects in the U.S. at present. Some of them will never say the light of day. Others will come to market. We've got the projects that we're partnering with, particularly in the Korean metal and an making projects we are confident that they will come online. So we will increase our NdPr production as downstream processing increases. So hopefully, those projects, which do successfully come to market will start producing sometime in late '27, early '28. We'll have a watching brief on those to make sure that we're matching our production to that capacity.

Okay. Great. And just second question. Congratulations on the very good...

You get 2 questions.

Sorry?

I'm sorry, Jonathan, go on. I shouldn't have joke. Yes, go on.

Now I know you're still there. But as you do look to appoint the next CEO, what are you looking at in terms of capabilities? Is it operational execution, marketing maybe government relations? And should we expect any changes in the direction under new CEO?

Look, you'll have to support that despite the fact that I think that I'm by far the most competent person to select the next CEO. The nonexecutive directors on our board think they have a say, too. anyway. I think that we have -- my job is to make sure that we have a business which is strong, which is resilient and which is able to continue to demonstrate the same sort of success we have now. But demonstrate over my tenure.

I would expect that given the quality of our track record that we would not be -- the Board would not be seeking to make an appointment, which would take the business in a fundamentally different direction. Now, I'm sorry, everybody. I've just got a message that says that there are 7 more questions in the queue, and it's 10:54. So Please, can we just have 1 question each so that we can try to give everybody a chance to ask a question.

Your next question comes from Daniel Morgan with Barrenjoey.

Amanda, just on the market, it's clearly improved. Spot prices are rallying, customer inquiry is increasing. I'd basically just like to circle back to how you plan to run the volume side of the business going forward. So can you lift volumes materially from here. When do you think you can run the system at 1.5%? Or is rectification and power issues at Kalgoorlie meaning that in the short term, you're going to be kept at 8,000 to 9,000 tonnes per annum.

Thanks, Daniel, good question. In the very short term, the 8% to 9%, you're probably right in the short term, but not quite so very short term. We continue to be focused on the 10.5, 10.5 is roughly 30 tonnes a day. We know how we get that 30 tonnes a day, and we have many days where we are achieving the 30 tonnes a day, we're just not achieving it every day. yet. And yes, that is primarily about Cargill and about the amount of feed that we're able to deliver into lab ex Kalgoorlie. .

Your next question comes from Scott Ryall with Rimor Equity Research.

On Slides 5 and 6 -- no, sorry, 5, you talked to how well the business was set up as an incumbent and with lots of capability and opportunities to expand into other areas. So I guess what you didn't say was that your legacy, so congratulations. I'm wondering, just on a 3- to 5-year basis, given the excitement around rare earths in the last couple of years that has stepped up big time. How do you keep your staff and/or protect your staff and protect your intellectual property, please, just in the context of your incumbency advantages?

Yes. When we -- I think that's a really intelligent question because many times, people forget the importance of people in the business. We talk about IP. And there is no doubt that some of it is scientific IP, which can be properly documented, et cetera. But there's huge value that comes from just every operator in the company actually knowing what their job is, and that's a form of IP as well. We're very focused on ensuring that we are an employer of choice, and I don't expect that to change when we transition to a new CEO because Lynas is so much more than a single person.

Lynas, I know that I'm the figurehead, but Lynas is every person who works in the company. And so the care and the care for each other that is a feature of the way that we operate. and our focus on achievement and excellence. I believe will survive May. Our people continue to work at Lynas because they get satisfaction from their jobs. They know they're doing something which is valuable and that they are valued for doing it. And I think that too after 12 years will definitely survive me.

So being an employer of choice, yes, about making sure that we pay well and all of those things, but it's mostly about making sure that when you go home at the end of the day, you can say I made a difference today and we work very hard to make sure all of our people can feel like that when they go home every day.

Your next question comes from Dim Ariyasinghe with UBS.

Can I just get an update on the ramp license. So it's due to expire on Monday. It feels like it's maybe just a rubber stamp that you need, but in the unlikely case that it doesn't go ahead. Yes, what contingencies do you have? Can Karl step up to ensure that the rest of the quarter is okay. Yes. that's one question, that's it.

Dim, I'm not sure that I've got a lot constructive to say about sort of the hypothetical of, let's say, we don't get sort of an extension on the license. I don't think that that's likely to happen. I think that the licensing environment, as we indicated, has changed. The new legislation went through and was gazetted at the beginning of December last year. It certainly should ensure that we're no longer in this sort of every 3 years, what's going to happen, but in a much more normalized licensing environment where if we meet sort of our requirements, we can reasonably expect that the license will continue. .

As we've indicated, we've done the things that we need to do. We've had the Atomic Energy Department, has been in, don't it, that's audit. We've received a very satisfactory rating, which is the highest rating available, and we continue to run our operations safely for our people and our communities and the environment. So yes, would I have liked all of this to be resolved a month ago, yes, but that's not the way the system works. But we will provide you with an update I would expect within the next few days.

Your next question comes from Paul Young with Goldman Sachs.

This one should be pretty easy. I've noticed that you've got a really good provisional pricing tailwind in the half of about $20 million. So your revenue, but -- the Street's expectations, and it was well above the cash receipts because of receivables increase in inventories, et cetera. But just on the provisional pricing tailwind, just to help us out going forward because you should actually see this benefit over the next 6 months as well, like a revenue tailwind on repricing of product before sell but the price hasn't been locked down. Can you just help us just think about or just explain what your quotational pricing period is like as far as -- so we can look at -- we can actually just judge provisional pricing adjustments going forward?

I can't give you chapter and verse on that, Paul, because it is different by customer and the provisional pricing mostly relates to sales which you made in Japan. So it carries that inventory and does actually denominate a certain inventory for certain customers, which is why sometimes the tail is longer than we might otherwise expect it to be. But I'll invite Gains to speak to it as well. But I would think that we should have most of it find its way through the system sort of within the next 3 months. Gaudenz, did you want to add anything to that?

Yes, Paul. I think that's correct. You see on the balance sheet, receivables side already. But yes, it depends sale-by-sale, also being the final sale is made to the customer and that varies between 1 month and 3 months. Probably best you take -- if you want to model it take about 2, 3 months lagging impact into consideration, then probably another 3 months before you see the cash really coming in or going out. I mean it's positive at the moment, has not always been like that. but we obviously enjoyed the current set up.

A little bit more color, Paul, because this is an interesting question, a little bit more color. We basically invoice when load our factory gate, we go through a process of then tolling it in our toll metal matters. And then it goes from me into the magnet makers and that actual that's part of what drives the difference here, and that is, as Gaudenz said, it's at least 2-month period that we're talking about before it finds its way into the magnet makers. So yes, for modeling purposes, I think that you could assume a 2 to 3 months sort of lag is reasonable.

Your next question comes from Austin Young with Macquarie.

A quick follow-up. Just looking at your term deposits, I can to understand how did you -- explain the budget for that figure? Should we assume that the remaining balance will be what you set aside minus working capital requirement set aside for the downstream...

I'm sorry, I have not -- you've just been garbled on my line. I don't -- can you start this question again, please? I can't understant what you're asking. .

Sorry, I'm keen to understand the thinking for this term deposit and the remaining cash for the next 12 months, would that be the amount you set aside for this ionic project in Malaysia and also the downstream plant, the capital requirement?

So that's basically a treasury question. So I'll let Gaudenz do that. I mean in terms of allocation into the different projects, we will disclose those as we finalize each of the projects. So we've disclosed the $180 million on the heavy rare earths. We understand the profile of expenditure of that money and are managing it accordingly. But in general terms, treasury, I'll let Gaudenz say a few words to that.

Yes. There, I think it's probably better to look at it as a very dynamic process. I wouldn't really draw conclusions as you try to do that this is really specifically for certain spendings later on. I think also the terms we have there in that category of between -- or beyond 3 months but shorter than 12 months. it's more interest optimization approach we have there.

So I will not read too much into the figure as such. And overall, we try to have a balanced approach, a cautious approach, but obviously, at the same time, optimizing the interest income. And at the moment, some of the shorter durations are better than the longer one. So it's pretty, pretty mixed.

There are no further questions at this time. I'll now hand back to Ms. Amanda Lacaze for closing remarks.

Okay. Thank you very much. And thank you all for your participation today and the questions that you've asked. And as with I think every CEO, I would remind you that any day that ends NOI is a good day for Lynas and Lynas shareholders. So I look forward to seeing many of you over the next week or so. Thanks. Bye. .

That does conclude our conference for today. Thank you for participating, and you may now disconnect.

Things like Banana Nicol and as we had anyone who

Good day, and thank you for standing by. Welcome to Lynas Rare Earths Quarterly Results Briefing. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Lynas Rare Earths. Please go ahead.

Good morning, and welcome to the Lynas Rare Earths Investor Briefing for the December quarter of FY '26. Today's briefing will be presented by Amanda Lacaze, CEO and Managing Director. Joining Amanda on the call today are Gaudenz Sturzenegger, CFO; Pol Le Roux, COO; Daniel Havas, VP, Strategy and Investor Relations; and Chris Jenney, VP, Sales and Market Development.

I'll now hand over to Amanda Lacaze. Please go ahead, Amanda.

Thanks, Jen. Good morning, everybody. Happy New Year, and welcome to what I plan to be our best ever year. As always, thank you to everyone for attending. As I think you all know, for me, there's not too many more of these briefing sessions. And so I am quite determined that they should all be very positive.

Following the announcement on my plans to retire on the 30th of June this year, I have received an overwhelming number of complementary messages, sufficient to make [indiscernible] in some instances. And I would like to thank all of you who have sent me sort of positive feedback following last week's announcement for your very kind thoughts.

However, as I've said to everybody, this company is not so key person-dependent that it should matter, and I'm delighted to see that, that has been the market sentiment. We've spent 12 years -- I've spent 12 years of my life working to build a strong and resilient business at Lynas. And I am delighted to be leaving the company in excellent shape with the completion of our Lynas 2025 capital program, a very strong balance sheet, a path forward outlined in our Towards 2030 strategy and a team that is really second to none competent leadership, in fact competent people right through our organization.

So I look forward to a great sort of 6 months leading into the retirement date. And I think, as I've said to some, I had joked to my team that I would expect that excellent farewell .

Today, in particular, I am delighted to be able to present really a very good quarterly result despite our previously disclosed challenges at Kalgoorlie as a result of the power outages during November. So production of NdPr during this quarter, whilst it was less than the prior quarter, is as we expected and as we foreshadowed in our announcement in late November. Production of dysprosium and terbium is ahead of our plan for the quarter. But effectively, we used up oxalate, which had been produced during the prior quarter. So we sort of look at this and average it out over the 6-month stuff to give us a bit of an indication of where we will be able to continue to operate those circuits into the future.

During the quarter, we undertook some really substantial maintenance on the kilns, including some 10-year maintenance on a couple of those kilns. They have restarted in very good order post that maintenance schedule in January. Of course, as you've seen from the report, which we've launched this morning, the sales of NdPr have been -- sorry, just finishing up on the operations. As we've indicated in like November, we had significant power outages in Kalgoorlie during November, which meant that we were unable to produce and get material to Quantum to be processed in time during the quarter. We did have -- we have had much more active engagement with our supplier in this area and at least 2 issues that have been identified have been rectified. Having said that, we've had much more stable supply for a period of time. However, as recently as yesterday, we had 2 significant power outages. So we continue to assess new [ operate ] solutions. As flagged previously, diesel generation can give us reliable power, but we are very focused on continuing to reduce our environmental footprint. So it is not the most desirable path forward, but we are assessing what of grid solutions may be available to us.

Moving on to sales. Sales of NdPr were ahead of production of NdPr. And so you worked out that saw some drawdown of inventory, which we believe we will probably replace in due course. We have not sold all of our DyTb as we continue to use that material strategically. As we've indicated previously, it's in very high demand. The sales team continues to negotiate new contracts which particularly looking to how can we acquire high-value NdPr agreement alongside sort of the DyTb, which is required by particularly magnet customers.

Just a word on the cost because I saw one of the early analysis this morning, which notionally showed a significant increase in costs. Of course, some of that is related to the fact that the volume -- production volume was lower. And so therefore, things like fixed costs have been shared across a small volume. But I would just also caution everyone to recall that this is a cash report for the quarter. And so therefore, the cash costs and the actual production are typically about a month apart. And so I would suggest, wait until we put out our half year to really get a very good fix on the achieved costs within our business.

And as we look at the cash flow, I mean, of course, we're sitting on a very substantial and positive bank deposits. We are still washing out the final Mount Weld invoices, and we've got a few more to go through in this coming quarter as well.

So I think everyone understands that the market settings remain positive. And in fact, in some ways, have even become more positive during January. NdPr price continues to strengthen. And frankly, geopolitics continue to be our friend. Although we are yet to finalize various agreements with government, the policies which have been particularly implemented by the U.S. government have already fostered more functional market dynamics. As I've said on many occasions, our objective is a proper functioning market where materials are valued appropriately, right? And what we've seen over the last sort of decade or more really is a situation where that is not the case and where market dynamics are dysfunctional rather than functional. So whilst we might look at various governments and the sort of support that they might seek to be providing to industry, as we've said to government ultimately, our objective is that no government has to write a check because actually, the market functions in a proper way, and we are seeing a significant improvement in market function as a result of the various policies, which have already been implemented.

Certainly, as we've seen the relaxation of some of the -- or the proper sort of implementation of some of the export controls from China, the demand inside China has increased. And as that has occurred, the price has also started to increase. And even during this month, some of the Chinese rare suppliers have signaled a price increase, which was published earlier in January.

So bearing in mind that our objective remains to place all of our production outside China at sustainable price levels that is no government checks ultimately involved, we see ourselves on course to do so and certainly welcome many of the policy initiatives and also the development of a number of options in outside China supply chain.

So with that, just a reminder, a very good month in terms of actually production, notwithstanding the power outages certainly in terms of the completion of our maintenance program, and as I said, the start-up of it in the restart of our lines Malaysia facility in January and a particularly good quarter in terms of sales, and we're very focused on ensuring that we continue these positives in 2026.

So with that, I'm happy to take any questions.

Thank you, Amanda. [Operator Instructions] First question comes from Rahul Anand from Morgan Stanley.

Look, my one question is around the price and the pricing mix, if you can help me a bit on that. So obviously, the -- realized price was significantly above our and consensus forecast is a really good outcome. I guess there was a bit of benefit from perspective of your points noted in the release, which were higher benchmarks, higher dysprosium, terbium and perhaps a bit more NdPr in the mix. Can you maybe highlight these points a bit more and maybe help us understand a bit more as to how we should be thinking about perhaps the sales mix on a going-forward basis? And then also where we can expect better performance.

Okay, Rahul. Look, I think the first thing is that as a current producer at scale of separated NdPr and also do DyTb, every -- and an established supplier, every movement in the current market index, which is Asian Metals, delivers benefit to us every day. And that is one of the things which really sort of sets us apart from many others is that we start to bank that value from day 1.

Having said that, our objective is to continue to add new contracts, which either give us a premium in some instances, which is referred to the current benchmark or indeed agreements which are sort of tied more closely to the sort of floor prices which have been indicated by the agreement of the U.S. government entered into with NdPr materials last year. So we're doing both of these things. And we do track. Don't ask, I'm not going to disclose, but we do track very closely what's the premium that we're achieving versus various benchmarks. But we think that the strengthening market and strengthening demand for NdPr are the things that ultimately drive improved financial performance.

Next, we have Neal Dingmann from William Blair.

Just quick question is really around the production mix. Specifically, you guys are doing a nice job of continuing to grow the mix. And my question is, what is sort of the longer-term target for dysprosium and terbium sales volumes as a percentage of total mix. This looks like that's growing. I'm just wondering kind of what is -- do you have sort of a target maybe for end of this year or maybe next year on that?

Neil, so we did put out some advice on our heavy rare earths investment as we grow out -- as we invest in further capacity expansion in Malaysia earlier -- not earlier this year, late last calendar year in any case. And so we do aim to increase the proportion of DyTb. But I think it is really important to note that it is always a relatively small volume. So a magnet maker typically is using about -- and Chris Jenney, correct me if I'm wrong, but about 30 tonnes of NdPr to 1 DyTb. So what we aim to do is to really be able to utilize that DyTb so that magnet makers and magnet buyers can feel comfortable and confident to buy from non-China sources, whereas up until last year when we commenced the separation of DyTb, even if they purchased NdPr from, say, us, they still had to source their DyTb out of China. So it's less about the specific volume and more about the offer that we can make to our customers.

Next, we have Austin Yun from Macquarie.

Just a quick question on the production. Previously, you said the production rate was to the market conditions, and we can see that -- the market is quite supportive, driven by both fundamentals and the macro events. I'm just keen to understand what's the -- in the near term, talking about next 6 months, what's the achievable production rate from your whole facility? Is that 10.5 the right number to think about the kind of a near-term cap? Any color would be appreciated.

Thank you, Austin, and thank you for asking yet again for guidance, which we -- certainly, what we have provided very clearly is the fact that we've made investment in our production facilities to be able to deliver 10,500 tonnes per annum of NdPr. The operations team continues to work on ramping up to that number, and our objective is to get there as soon as possible. Other than that, I'm not going to give you a date on which that will occur. Effectively, what it requires us to be able to do is to be able to produce sort of really quite reliably between 30 and 33 tonnes a day. And we are on track to be to do that. But until we have demonstrated our capability to produce at that 10,500 tonne run rate, we don't finally say, yes, Lynas 2025 is absolutely completed, but we are in good order to get to that sort of target.

Got it. Okay. Yes, I was truly just trying to understand if there's any the near term hurdles of plant and maintenance that we need to be aware of.

Well, Austin, as always, I mean, external factors tenge these days to trip us up a lot more than internal factors. So things like power at Kalgoorlie. If we cannot get Kalgoorlie, producing reliably because we keep on having power outages then that absolutely makes it difficult for us to achieve that sort of average daily run rate. So there are always external risks, and we seek to manage them absolutely as best we can. But we have a plan, we have a very clear target and 10,500 tonnes is the objective.

We've got Paul Young from Goldman Sachs.

Amanda, back onto the -- on projects and just ramp up. I assume our world is ramp-up is going really well. I think you said it's running at 70% of nameplate, which is a pretty quick commissioning and ramp up, albeit pretty small project, but nonetheless complex than others. What is the plan to get to when you expect to get the full capacity there? And to be able to test Kalgoorlie cracking and leaching to your point, if power supply is reliable, you can actually start really testing the kiln at full capacity? Or just with the market backdrop and everything else and the timing with the refinery expansion, do you expect to maybe stockpile concentrate. So just curious around when you can achieve nameplate and what the strategy is as far as really testing Kalgoorlie cracking and leaching?

Thanks, Paul. I don't think that it's proper to describe Mount Weld as a fairly small project. That is a very substantial project. And yes, we are very pleased to be running at 70%. And -- but I would note, and this is particularly recognizing sort of the efforts of our team, that start-ups are never completely trouble-free. And so even at Mount Weld, where we are very confident about our assets and really have a lot of experience, sort of making that shift from our -- from what was indeed a little plant to now a much larger, more complex plant, that using more different mineralogies. We certainly have -- certainly has presented the team with a number of challenges.

If at present, up until we commissioned the new plant, we were actually producing even from the old part, 2 grades of [ can, ] 1 which was slightly higher grade for Malaysia versus [indiscernible] call. At present, that's not the case. We're basically producing all of the same grade.

In terms of the Kal, if we said everything is perfect outside, we would actually say that the kiln and the cracking, the actual cracking and leaching process in Kalgoorlie has proven itself to be working as designed. And so therefore, we wouldn't see that there was any significant challenge to being able to wrap that up. The area where in terms of the ramp-up from commissioning that has presented us with the most challenges is the production of the next rare earth carbonate, which is a new -- which is actually a completely new circuit in our flow sheet.

And so we -- over the last year, the team has made quite a lot of process improvements there to -- particularly to improve quality, some of the early material that we were sending up to Lynas Malaysia was not on spec for a variety of different areas. And I think that we've now got ourselves to a position where we're pretty confident about most of the quality specs. But it actually has been the area that has challenged us the most other than our inability to be able to put together so long runs because we keep having these power outages.

So we do need to be able to continue to ramp up Kal, and that remains at the heart of us getting to the 10,500 tonne run rate. Having said that, I can also tell you that the Lynas Malaysia facility and particularly cracking in Malaysia continues to improve is significantly ahead of where we were performing even a year ago, certainly 2 years ago. And so therefore -- so really balancing the 2 facilities we are confident that we continue on a good pathway towards reaching that 10,500 tonnes.

Next, we have Daniel Morgan from Barrenjoey.

Amanda, you said earlier in the call that you are yet to finalize agreements with various governments. It sounds like that's multiple governments. Can you just talk about what is the nature of what you're seeking? Is it offtake as you talk about with the Department of War? Is it price protection agreements? Or is it something else?

Thanks, Daniel. So I think everyone, even with a passing analysis of the rare earths market will recognize that the feature which was far the most significant for the deal that the U.S. did with MP was the price protection agreement. And I think that we can see that a lot of other things, even though that deal did include capital injections, et cetera, that the private markets will sum up the equity for our functioning market where you can see that there is a business that can be a successful business. And that is -- has been the positive effect of those -- the positive effect of the price protection agreement.

So we have encouraged privately and publicly sort of other markets as they're considering their policies. And if you think about the sort of notification, which has even come out of the Australian market, the Resources Minister a couple of weeks ago talking about the critical minerals, strategic reserves was really talking about managing with floor and ceiling prices. I note that Scott Besen spoke in Davos yesterday, he was talking about the conversations of the G7+ meetings and about putting in place a floor and ceiling prices to ensure that you've got a positive functioning market.

In a couple of instances, it is also relevant. So say, for example, in the U.S., whilst there's significant investments being made in future capacity, there is a current requirement for product, particularly for some of their -- particularly for the defense industry, which is really the objective of a number of the Chinese policies is to ensure that no Chinese product goes into defense applications. And so that's why in some instances, there is -- it's also relevant to be considering whether a physical stockpile is a benefit to the government. But essentially, it is the functioning of the price market for us. We don't need government to be buying our product, we need customers to be buying our product, and we need those customers to buy our product at prices that properly reflect the cost of doing business. And so really, that discussion around policy and policy execution is the most important discussions that we are having with government.

Next, we have in Chen Jiang from Bank of America.

We will miss you after this financial year for sure. One question from me is about your lost production. So I guess with your capacity 10,500 tonnes NdPr and cracking and leaching plant is running well from January at Malaysia and Kalgoorlie power situation kind of resolved or stabilized, I guess the production loss from December quarter can be recovered in third quarter and fourth quarter over the financial year. So I guess we shouldn't assume the production is lost but delayed into the rest of [indiscernible] am I understanding correct?

Yes, yes. I think we're pretty confident about always with the [ qualification ] that we are, to get to 10,500 tonnes, we must have [indiscernible] coming out of Kalgoorlie. If we have no power, then we can't have an [indiscernible] coming out Kalgoorlie. That is absolutely our #1 constraint over time. But yes, it would be our expectation that we should be able to now continue with an orderly ramp-up towards the 10,500 tonnes.

Next, we have Reg Spencer from Canaccord.

Amanda, I'd just like to start by first saying congratulations on your tenure at Lynas and what yourself and the rest of the team has achieved over those years. It's been a long journey, and at times, I think we all agree hasn't been necessarily an easy ride, but congratulations and hopefully, you get to put the toes up at some point in the next few months.

I should try to dive in a little bit earlier because I'd role the back of the queue now. So my question I have because most of the other questions have been answered relates to the magnet plans for JS Link and Novion. And clearly the market is moving ahead in the West, it seems to be almost every second day of a new magnet plant being announced somewhere. Have your plans and your conversations with both JS Link and Novion moved ahead? And are we getting closer to a point where we might be able to get some detail around what those plans might actually look like on execution?

Thanks, Reg. Thank you for your very kind thoughts, comments. And yes, we'll make sure that we had time to actually celebrate the past 12 years in good order before I ride off in [indiscernible]

So yes, discussions with both JS Link and Novion are progressing. And I might actually invite Chris Jenney who lead our sales and market development area to add comments on that.

Thanks, Amanda, and thanks, Rex, for the question. Yes, so the discussions continue with both JS Link and Novion. And just looking at what is the best partnership model based on the current geopolitics, but also the current dynamics of the market. And I think what feeds into that is the increased appetite for OEMs to create the non-China supply chain. And so we're working with a number of maker -- metal maker partners, not just JS Link and Novion to make sure we can link those OEMs to them magnet makers and metal makers to basically supply oxalates into. So we will keep you updated as we progress. But it's interesting times. And yes, we'll update you as we can.

Chris, interesting indeed. Not a lot of metal makers out there, actually. And I see one just got bid for today.

Next, we have Scott Ryall from Rimor Equity Research.

You mentioned a couple of times the electricity situation in Kalgoorlie. And it is one of the one of the hardest places designed to stand to get bulk reliable electricity in Australia at the moment. So I guess my question is, what's in your control for actually solving the issue versus third-party control? And is it the government? Or is it your electricity supplier that you're most pressuring, I guess, at the moment? And over what time period do you think you'll be able to resolve this on the assumption that at least part of its third-party pressure that you have to apply is that -- is it something that you can solve over 12 months, 24 months? That's -- I'm just after a broad estimation there.

So we are definitely engaged, Scott, with both the government and with the supplier, the power supplier. Given it's -- Western Power is government-owned enterprise and then clearly that these 2 things go hand-in-hand. I think that you're right when you say Kalgoorlie is challenged, and we're certainly not the only industrial operator in Kalgoorlie that has suffered as a result of power outages. And I would also say that the state government absolutely recognized as that and has, I believe, a sort of specific project team to address how to improve this.

However, from public commentary, they've talked about sort of that time line being somewhere in the range of like 2029 to 2032. So this clearly doesn't align to our requirements. So our team has -- it continues to work on water alternate power solutions, which would be either completely off-grid or maybe a combination of crude and off-grid activities because we would want to be able to put a solution in place. We'll be aiming to do it with and I guess, the next 12 to 18 months as opposed to the next 2 to 3 years.

A diesel generator diesel power station can be put in place pretty quickly. And if we get to a position where that's the only way that we can assure power reliability, then we will do it, but we would rather look at a better medium-term solution than burning diesel. So we've decided not to proceed at this stage with a diesel power station, but that can change and it can be implemented pretty quickly if it does change.

Next, we've got Regan Burrows from Bell Potter.

Amanda and team, congratulations on the quarter despite the disruptions there. A lot of the questions are sort of focused on Kalgoorlie and the ramp-up there. If I could just sort of summarize and make sure that we're understanding it correctly. Excluding the power outages that we've seen at Kalgoorlie and once you get Mount Weld up to sort of 100% run rate, are there any bottlenecks within the entire business in reaching that 2,600 tonne per quarter rate? Or is it -- is there anything else that we're missing there?

Regan, there's always a bottleneck, right? In fact, it's a measure of progress of your operations that you find new bottlenecks because as you resolve one, then the bottleneck moves around and you find another one. So at this stage, we remain focused on ramping up Mount Weld. And as I said, even though we've had a very positive ramp-up to date there, notwithstanding that, barely 3 months into that ramp up, and we are still identifying bottlenecks and issues to be resolved as part of a normal ramp-up. And in Kalgoorlie, likewise, as we continue to increase production, we will discover new areas that we need to improve. However, as I indicated earlier on the call, we have our sights set very firmly on the 10,500 tonnes. And the way that we get there will be by optimizing each of the production facilities, recognizing that, yes, there will be various bottlenecks either internally or externally at each of those facilities. So yes, there will always be a bull neck. If there's not, then we're not moving forward, actually.

Next, we have Dim Ariyasinghe from UBS.

Just a question on Japan. So earlier in the year, China imposed additional controls on the trade works into Japan. I figure the market is still trying to work its way through implications. But any -- can you give us any indication on how your Japanese partners feel? This is -- is there more upside potentially ahead for -- to that 7,200 tonne volume arrangement? Yes, anything -- yes, how's that [indiscernible].

Thank you, Dim. So yes, look, I think as we look at the actions that the Chinese have taken since April last year, they announced very substantive controls in April last year. And I think we all saw the outcome of the fact that they announced the new licensing framework before they implemented the systems to be able to manage that new licensing framework.

Since then, notwithstanding various other announcements and commentary and we had sort of a further set of -- sort of comments from the Chinese in I think it was in October about further constraints, effectively, the things which have been implemented in China are really those April controls and a series of nonprice controls with respect to the export of knowledge and equipment. So when we say that it's not really clear what the further commentary earlier this month with respect to China and Japan really means. It's because it's not clear that there is more than what was already announced last April, which were significant controls on what term dual-use materials, which is essentially those using -- those with heavies. And so we have been very actively engaged with our Japanese partners for many years on ways that we can increase supply of heavies into the Japanese market. So we continue to be focused on that because it's that which really gives particularly magnet makers and non-Chinese customers the confidence to be able to go forward. So yes, we're not seeing anything over and above what had already previously be disclosed. But we are seeing now that the Chinese are getting their administrative systems in place. And some of the benefit to that is that exports have started to flow again, particularly of sort of magnets. But we've not seen a significant effect from the announcements earlier this month. Is that helpful then? I have really -- yes. I don't think we can see anything more than that at this stage. And what we do see is that all of it, as I said in my opening remarks, geopolitics do remain our friend.

No, that's really helpful. Yes, and congratulations on an amazing career.

Thank you.

We have a follow-up question from Chen Jiang from Bank of America.

Just a comment in the release about the increasing share of rare sales at prices independent of the market index. I guess the most you are referring to the heavy rare earths dysprosium and terbium, but there are also, I guess, increasing NdPr pricing independent of China's benchmark. I'm just wondering if the increase in NdPr sales, independent of China's benchmark, is your new contract? So which means that is the contract sales outside of Japan or even in Japan, you can have prices independent of China NdPr.

Okay. So yes, yes, yes. But our objective is that it is not just on the heavies. Our objective is that by having the heavies, we are able to agree contracts with the target customers outside of China and Japan and that we are able to agree those at the sort of price levels, which have been signaled very strongly into the market as price levels, which are sustainable, both from a supplier and also a customer perspective.

So yes, we are starting that process. Some of those contracts are relatively low volume at present expected to grow over time, but we are aiming to write contracts which are either independent of the Asian Metals index or utilize sort of the floors and ceilings that we see being signaled into the market elsewhere. Ultimately, headings on their own don't significantly shift the dial for Lynas. I mean we need to understand that it is always -- that today, we are still very heavily dependent upon NdPr to drive value in our business. And so using all of our skills and portfolio capabilities to do that is our core objective.

It would be good to say your NdPr price can be gradually recovering from China, that would be good.

Well, that is certainly our objective. But it won't happen before I retire. That's right because I've already notified when I will retire. But certainly, it is our objective and it is our objective to continue to grow the share of our business that is -- and it always has been. We're just slightly. I think we are in a more favorable market situation, which is allowing us to execute on that objective rather more successfully.

We just have a follow-up question from Paul Young.

A quick question on the heavy rare earths circuit and the expansion. This is certainly not big picture, necessarily, I don't think material, but just to confirm on the timing of the expanded circuit and the first production of samarium, which I think you -- in your release is saying is Q4 2026. I think the prior guidance it was April 2026. I just want to confirm, are you referring to December quarter of '26, just a modest delay. And if so, is that because of -- I think you're calling out just procurement of...

No, no. It's Q4. It is Q4 this calendar year. It's no delay.

No delay. Okay. Thanks for confirming.

Thank you.

Okay. So maybe there's no further questions, no, I thought maybe not because I think many of you will be going to -- I think there's another briefing that starting at midday. So I want to give you enough time for a nature break ahead of that.

Once again, thank you all for joining us today. We are pleased to have been able to deliver the results that we have delivered. And we are pleased to be looking into a market which is looking pretty positive in terms of its various settings, and look forward to seeing all of you in the next couple of months when we release our half year results. So thank you all.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning, ladies and gentlemen. My name is John Humphrey, and I'm the Chair of the Board of Lynas Rare Earths. I'm pleased to welcome so many of you here today to this Annual General Meeting of the company. I'd like to begin by acknowledging the traditional owners of the land on which we meet today, the Gadigal of the Eora nation as well as the traditional owners of the lands on which we work, live and meet in the eastern goldfields of Western Australia. We pay our respects to elders past and present and extend that respect to any aboriginal and Torres Strait Islander people attending the meeting today. I'd like to extend a warm welcome to all shareholders joining us today, both in person and online.

Ladies and gentlemen, today's AGM is being filmed and it is being live streamed via the Internet. Details are available on the Lynas website. When we come to the Q&A section of the AGM we will take written and audio questions from shareholders joining us online as well as questions from shareholders in the room. Online attendees can submit questions via the Lumi platform at any time. Voting today will be conducted by way of a poll on all items of business. Online voting will shortly open for all resolutions. At that time, if you are eligible to vote at this meeting, a new vote tab will appear. Selecting this tab will bring up a list of resolutions and present you with voting options to cast your vote, simply select one of the options. You do not need to hit a submit or enter button as the vote is automatically recorded. However, you have the ability to change your vote up until the time I declare that voting is closed. I now declare voting open on all items of business. The voting tab will soon appear, and I will provide notice before I move to close voting at the end of this meeting.

For information on how to submit a question or vote please refer to the Lumi platform user guide on our share registry website or in the document tab of the Lumi webcast platform.

I would now like to introduce my fellow directors. Joining me here today are our Chief Executive Officer and Managing Director, Amanda Lacaze; and Nonexecutive Directors, John Beevers, Philippe Etienne, Grant Murdoch and Kathleen Bozanic, Vanessa Guthrie is joining us online today and can't be here because of family circumstances. If you have joined online, you will see Vanaseonscreen, while shareholders in the room will hear Vanessa by audio. We are also pleased to be joined by Sarah Leonard, our General Counsel and Company Secretary. Our audit firm, Ernst & Young, is represented by Trevor Hammond partner, who is also here in the room with us today to answer any questions you might have relating to the audit.

I understand that all shareholders present have registered with our share registry boardroom before the meeting. The Notice of Meeting was dispatched to shareholders on 27 October 2025 and accordingly, this meeting is deemed to have been properly convened. We have a quorum of more than 2 shareholders, and accordingly, the meeting is able to transact the formal business as set out in the Notice of Motion.

Before we proceed with the formal business of the meeting, I will make a short address, after which Amanda Lacaze will deliver the CEO presentation. We will then table the FY '25 financial statements. At that point, we will pause for any questions on Amanda's presentation and the financial statements. After questions, we will continue with the formal business of the meeting. There will be an opportunity for shareholders to ask questions on specific resolutions.

So good morning, ladies and gentlemen. It's great to see so many of you here joining us today, both in person and online. As you will all be aware, 2025 has been an exciting year for both the rare earth industry and for Lynas. The year marked the end of the 5-year Lynas 2025 growth strategy. Major projects at Kalgoorlie and the expansion of Mount Weld were largely completed during the year, and notably, we produced our first dysprosium and terbium oxides at Lynas Malaysia in Quanta. As outlined a 2025 strategy wraps up, our operational footprint is now larger and future fit as the market continues to grow.

So where to from here? As shareholders know, during the year, we developed our plans for the next phase of our company's development and release those plans to the market in our -- towards 2030 strategy. The new strategy release was done in conjunction with a $930 million capital raise through an institutional placement and a very well-supported shareholder purchase plan. The capital raising gives us the balance shed strength to support our strategic growth ambition. This year, the rapid evolution of the outside China rare earth market, sorry, this year saw the rapid evolution of the outside China rare-earth market. The capital investment made over the past 5 years has ensured we are well positioned to optimize assets and to capture value for our shareholders. Shareholders will be pleased to know that the Board will consider the issue of distributions in conjunction with finalization of the half yearly accounts in February 2026. Lynas' leadership position in the outside China market also enables constructive engagement with governments around the world as they develop policies and implement actions to develop and expand the current non-China rare earth supply chains.

The towards 2030 strategy announced in August sets out our plan to deliver returns from existing assets and to develop new growth opportunities. Initiatives include adding resource and scale, increasing downstream capacity for heavy rare earths and NdPr separation and expanding into the outside China metal and magnets market. The project delivered as part of the Lynas 2025 initiative provided the foundation for our towards 2030 strategy and Amanda will shortly provide you an update on the strategy and recent developments in her CEO presentation.

From a financial perspective, performance was affected by investment in new facilities and new products as well as the low rare earth market price that prevailed during most of the 2025 financial year. profit after tax or NPAT of $8 million was delivered for FY '25 and the annual revenue increased to $556 million, primarily as a result of increased NdPR production and sales. Operationally, the team delivered a number of significant achievements. During the year, this included safety improvements with good progress on the total recordable injury frequency rate, although there was a slight increase in the lost time injury frequency rate.

Pleasingly, sales volumes of 6,555 tonnes for the high-value NdPr product family increased by 18% while total REO sales volume reduced by 10% to 10,970 tonnes as we reduced production of the lower value lanthanum and cerium products. During the year, the average China domestic price of NdPr that excluded increased from $44 a kilo in June 2024 to $55 a kilo in June 2025. After a sustained period of low market prices, the upward movement towards the end of the June 2025 quarter has continued into the 2026 financial year.

Turning to operations. In Kalgoorlie, the new rare earth processing facility is now producing mixed rare earth carbonate or MREC, which we ship to lines for separation into individual rare earth products. The support of experts from our Lynas Malaysia team continues to be instrumental in the ramp-up and flow sheet improvements we have made. The team should be proud of the progress that they have made over the year. Considerable progress has been made. The Mount Weld expansion is largely complete with processing plant fully commissioned with excellent progress being made on the hybrid power station. The gas and solar components of the power station were constructed and gas was commissioned in the September 2025 quarter. Solar was commissioned and our 4 wind turbines have been constructed and are currently being progressively commissioned.

The new power station has already proven its ability to run solely on renewable energy when conditions are favorable. In Malaysia, upgrades to the Advanced Materials plant have created an expanded facility with additional processing commissioned -- with additional processes commissioned and operating an MRC receivable, solvent extraction and product finishing. Work to increase the nameplate production capacity has been completed. And as I've previously noted, the first production of separated dysprosium and terbium oxide was achieved during the year in May and June.

The production of separated heavy rare earth oxide at Lynas Malaysia marked an important milestone not just for Lynas, but for the global manufacturing supply chains Lynas is now the only commercial producer of separated heavy rare earth oxides outside of China. In Malaysia, the solar array was commissioned and began operating in FY '25 and 60,000 megawatt hours of renewable electricity was recorded in that financial year.

Recently, I was pleased to join Amanda and the leadership team in Malaysia celebrating our 15-year anniversary of the start of construction of the Lynas Malaysia Advanced Materials plant. This was a great opportunity to celebrate the achievements of the past 15 years and acknowledge the contributions of people who have been instrumental to our success over the period. Last month, the Board was pleased to appoint Kathleen Bozanic, as a new Nonexecutive Director. Kathleen is based in Western Australia and has over 30 years' experience as a finance professional in the resources sector. This industry and financial expertise will be an asset to Lynas as we enter our next phase of growth with a towards 2030 strategy. Welcome, Kathleen.

Lynas is proud of our position as the market leader in responsibly produce separated rare earth. As we embark on our towards 2030 strategy, we remain focused on ensuring Lynas' operations are safe for our people, the community and the environment. We believe it's important to continue to transparently report on our sustainability performance through our annual sustainability report. The report is available on our website at lynasrareearths.com. If you haven't already read the report, I encourage you to do so and welcome your feedback.

In closing, on behalf of the Board, I would like to thank Amanda and the executive team for their leadership during the year. I also thank the entire Lynas team for their contribution to Lynas' success in 2025. I would also like to thank all of our shareholders for your continued support. The Board remains focused on creating value for all shareholders and look forward to further developing our business.

And I would now like to invite Amanda to address the meeting.

Good morning, everybody. Thank you, John for all of those kind words. And I will probably cover some of the areas that John has at least sketched out in his speech.

Today marks my 12th AGM as CEO of Lynas and they said it wouldn't last. In fact, our business is in the best shape that it has ever been. As no doubt, you would hope after all of that hard work. As John said, we recently had our 15-year party in Malaysia. You all missed it. We did some excellent dancing. I had to teach the locals, actually had to do the nut bush, but it all went down very well. It's 15 years from first construction in Malaysia and 15 years from the first commissioning of the concentrator in Mount Weld. Then, we were a start-up seeking to establish a business requiring the application of complex and challenging and unknown technology in a market where I think [indiscernible] would suffice to say we were not welcome.

It is so pleasing -- it was so pleasing at that party to see so many of our people, suppliers, customers and partners who had been with us for each of those 15 years. And that extends to the joy of seeing so many of you here today. You have been our greatest supporters. And I look forward to every year having the opportunity to see you again. This year, unfortunately, we said goodbye to one of our most ardent supporters, but I am pleased to see so many of you still here this year. Today, our operating assets are in place, able to serve today's demand and ready to serve tomorrow's demand. We have strong customer relationships. We are a trusted supplier of quality products, we have a skilled and competent workforce. Our people know how to operate our assets and are committed to the success of our business, and we have a strong balance sheet, which is future fit, a far cry from our early days, I still carry in my heart, the wound being described as a debt written basket case. So for all of you who have stayed with Lynas since those first milestones 15 years ago. Thank you.

We are future-fit because of your continued support, most recently with our capital raise in August. The support from our shareholders, particularly our retail shareholders fortifies our determination to deliver outstanding results from our current investments and to continue to pursue opportunities to grow our business. John has already provided you with some of the highlights of FY '25. I will provide a little more detail. So 2025, we could genuinely say was the year that geopolitics really came to town in the rare east market. Sometimes, the analysts complained that we won't provide detailed guidance on Lynas' performance. But when you look at the various actions that have shaped the market in 2025, our choice seems sensible. Governments now understand the importance of rare earth today and the expected growth in demand over the next decade. And they are now looking for security of supply and finally, recognizing that the highly concentrated market were dominated by the Chinese is not healthy.

So various governments have developed and are implementing new policies to address these issues. This particular set of exciting challenges started in April with Liberation Day in the U.S. and then some further discussions with the Chinese, it was the first application of tariffs by the U.S. and it was the first response from the Chinese with at that stage, a number of nonprice controls in the market. That was followed up in July by the really industry-shaping deal that the U.S. government did with MP Materials, which included -- it was quite breathtaking really, in its breadth and its scope, including equity, debt and most importantly, price support, which really has changed the dynamics in the market in a number of ways.

That was followed then by some further nonprice restrictions from the Chinese back the ball backwards and forwards, which have now been put slightly in a band, but it is well worth noting that those which were announced in April remain in effect. And then most recently, a number of bilateral agreements which have been signed between the U.S., Australia and Australia, the U.S. and Malaysia and the U.S. and Japan. Our job at Lynas, apart from actually running our assets is to navigate a way through these changes and to take advantage of the opportunities that they present, and step over the pot holes because some of them can be remarkably deep.

So we are in the best shape ever to take advantage of the opportunities and confident of our head start versus others who might choose to operate in this market. In 2025, we delivered a number of significant achievements. We expanded our operating footprint at Mt Weld, we saw the we call it an expansion, but fundamentally, we have rebuilt the Mount Weld concentrator and operations there. And as our general manager said, I thought rather poetically, the old plant has been able to retire with distinction. Wouldn't we all like that described to about ourselves at some stage, the old plant, which is a really small plant, has served us very well for a decade. But now we are using some of those assets, but plant, the new $500 million facility is now operating for us.

We -- the Kalgoorlie facility is ramping up. This year, Poland is have done a lot to really enhance the original design there to improve some of the flow sheet operations, operating efficiency. And of course, everybody knows that we're just ready to really hit our straps and then Western Power gave us sort of the gift of really quite some significant power outages, which has made it quite difficult this quarter. And in Lynas Malaysia, we have expanded the facility and done so incredibly cost effectively. And of course, that is the benefit of being able to do an expansion on a brownfield site.

In terms of growing with the market, the first separation of dysprosium and terbium in Malaysia is a matter, which I think is really quite amazing that the team has managed to do. When we put in the changes to the flow sheet to be able to do 10,500 tonnes of NdPr, we did put in some new mix of settlers and we freed up one of the separation trains that we have had previously. And Paul's team said, "Oh, well, there's some kit, we should use that a bit wire solution and refurbished it, put in place and we started separating the DY and the TV. Now we often joke about the fact that in 2014 and 2015, our production was 100%, not on time and 100% not on spec. And that is a feature of sort of doing something for the first time and having to learn it all the first time.

For the DY and TV, it is a matter of a great deal of pride that it has been 100% on time and 100% on spec. So right first time, absolutely. So very, very proud of that. We also upgraded the Mount Weld Mineral Resource and Reserve during this financial year. And that is really important. It means that we continue to have more than 20 years mine life from Mount Weld even at our expanded rates. And as John has touched on really developing this sustainable supply chain, including best practice sustainability principles within the business. And I will show some photos and talk a little more about our renewable power station at Mt World further on.

So I'm really happy to declare victory and move on as far as Lynas 2025 is concerned. And we've got a month left in 2025. So it's a good thing, isn't it? But we have substantially completed all of the task in Lynas 2025. You will recall, 6 years ago, we said, what are we going to do? Well, we're going to increase our nameplate capacity to 10,500 tonnes a year of NdPr. To do that, we need to rebuild the concentrator at Mount Weld because we need to process a lot more ore to be able to deliver the feedstock for that, tick. We're going to build a new facility in Cargo because we need additional cracking and leaching capacity, and it is sensible to do that as close as possible to the resource, tick. We're going to upgrade our Lynas Malaysia facility so that it can go from sort of a nameplate of theoretical nameplate of about 7,000 tonnes to 10,000 tonnes, tick.

So when you look at some of the aspiring projects in the rare east market, we have actually done in the last years effectively from approvals to commissioning, what is a whole rare earth project. And so it is -- I'm really incredibly proud of the team to have been able to do that. And so now, it's where to next but some more of that as we go on. But first of all, just looking at Mount Weld. And for any of you who've been at these meetings over the past dozen or so years, of course, you will have seen photos of Mount Weld. You will barely recognize Mount Weld as it is today. And our project manager there, I sometimes tease him that previously, we had this mill, what does it do there's about 40 tonnes an hour or 34 tonnes an hour, something like that. Anyway, it's quite a baby mill. When we've had people who come to visit, they look at it and they say, "Oh, that's a mill. It looks like a pilot plant." Well, I joke that Alex actually went to the mill online catalog and he picked -- he picked one of every sort to put it in into the new plant.

We now have 3 mills. Why does this matter? It matters because those mills as they operate will allow us to process more of the materials, so particularly the fine grinding mill and will allow us to reprocess some of the tailings bearing in mind that our tailings facilities have about 7% rare earths in them, which makes them the second richest rare earths deposit after the Mount well Cabot and it also means that we're going to be able to improve recoveries and of course, the other initiatives which are part of this is that we've looked at a number of areas where we can improve cost efficiency. So we've taken out some of the manual handling. Under our previous model, we used to handle the are 5x before it became a concentrate.

Now I think we only touch it once and the rest is automated. So we have added efficiency and sustainability into the operations. And the final piece of that plant that we are commissioning at present is our water treatment facilities, which will improve our water recycling rates. And of course, Water is almost as rare as rare earth at Mount Weld. So recycling it is an important part of our sustainability approach.

Then we look at this. So we need a lot more power to run the additional mills and also to run the water treatment and water recycling. We no more wanted to burn diesel to do that than the most ardent green. I mean, who wants to be burning diesel and creating those sorts of emissions. So we have made alongside our power supplies. And the investment in a gas firmed hybrid renewable power station. There are 2,500 solar panels. It's really pretty cool the way these operate these days. They come and they like an accordion and then they put them on the ground and they just open them up like this and there you are, you've got to solar. Well, maybe not quite, but that's what it looks like to me. But it is rather cute and 2,500 of those and 4 wind turbines. I have to say when renewable power was first sort of a thought bubble in my head, in 2016, when I asked Tony Malik, who's our GM at the time to start doing some wind and solar surveys. I probably had this vision of a single wind term line sitting out there. The reality is much more complex and impressive than that.

But what is truly impressive, as John said, is that we've already had weeks where we've been able to run the plant 100% on renewable power, and that is really very pleasing. Then we go to Kalgoorlie. This might be my very favorite ever photo of Kalgoorlie. It is so pretty probably rather prettier than it is most days. But nonetheless, it's a fabulous picture. And it is the first downstream plant here in Australia. As I said, Paul and his team have done a lot to improve and enhance even the initial design as we've gone through the commissioning process. The power issue, we -- the announcement yesterday spoke for itself. We've managed outages at Kalgoorlie ever since the day we started commissioning. Unfortunately, in the last couple of months, those have reached a stage where it is just not possible for us to manage them and still produce what we need to produce to feed Malaysia. Every time that we have an outage a short outage actually a power outage translates to a long outage in terms of production.

The kiln slows down, it takes 3 or 4 hours to be able to move it back to where it was. And every outage brings with it some requirements for manual handling for our people that we're not pleased to include with -- in normal duties. And additional stress on the equipment that we've just spent so much money on putting on the ground there. We are working. I can tell you that the Western Australian government has been particularly responsive on this. We are working to identify [indiscernible] solutions with the network. And if not, we will have to put in an off-grid solution, unfortunately, most likely for us to be able to do it in the short term. It will be diesel.

So having just managed to get out of diesel generation at Mount Weld, it will be disappointing to actually have to put that in place in Kalgoorlie, but it will be an interim solution only. And then we will look for a longer term, probably off-grid solution, unless we can agree some very specific changes with Western Power. Our Malaysian plant has already seen many exciting changes. I was just talking to [indiscernible] here. He came to visit the plant in 2016. And be hard pressed to recognize it now. There's been so much sort of additional capability put in place in Malaysia. As I said earlier, the first dysprosium and terbium separation, which could only be done in a plant like this for the cost and efficiency that we've achieved.

The support of our people and our communities remain is key to our success and drives our commitment to continue to develop. Many of you probably saw the video of the first DY and TV production. And when I first saw it, I said, it's so manual and it was like, no, no. It's just they all wanted to be in the video, right, which is really a reflection of their commitment to want to be part of something which was so exciting for our business. And we do continue to focus on the U.S. where both supply and demand side policies are reshaping the market.

So I thought we would just share with you these are ads which if you go to Washington and you wonder through either Reagan or Dallas Airport, you will see these as we hope will many American politicians as well. And so as they consider further enhancement of their policies, I got to be frustrated at 1 stage when there was talk about Annex in countries and all those sorts of things. It's like, well, if you need Rescal 1800 Lynas. So we're maybe not quite as brutal on 1800 line essentially, what we've got is these which will roll through on those digital billboards, which basically says Lynas can deliver what the U.S. needs today.

So Lynas 2025, tick, big tick. And then as many of you who participated in the August capital raise. With no, we then launched a very creatively titled, Daniel, and I spent a long time on this, towards 2030 strategy. We felt that Lynas 2030 just didn't have quite the same ring to it. So this is about the strategy over the next 5 years is about making sure that we do deliver the benefits from Lynas 2025. We've just, in the last 5 years, spent about $1.5 billion on fundamentally improving our operating assets. And we are not going to be one of those companies that spends all of the money and then says, oops, here is a nice pretty pony over here. Let's now focus on that and lose the focus on delivering return on the investments that have already been made.

And so we have the opportunity with those investments to continue to grow and to preserve our first mover advantage. But we also have the opportunity and the balance sheet to allow us to grow in other areas, including via partnerships into downstream metal and magnet making and also by looking at additional resources, particularly those which will be -- will have more heavies within the resource.

So I will finish my presentation where I started. We have the assets and the skills to meet the market today and into the future. Your support 5 years ago enabled the Lynas 2025 investments and has allowed us to retain our leading ex-China position. Our experience allows us to engage with governments with credibility as we seek to develop the outside China industry and our new Towards 2030 strategy sees us continue to grow our core business and grow into new activities.

At the 2011 AGM, where some of you may have been, the Lynas Chairman commented that this was a time when there is, without a doubt, a crisis in the global supply of rare earth. There is also a major restructuring of the global rare earths industry underway, both in China and the rest of the world. Well, doesn't history have a habit of repeating itself. Those words are as relevant today as they were then. The difference is that today, Lynas is a proven and profitable producer of both light and heavy rare earth, ready as always, to bank the value of the improving market. Our position today is a triumph vision, discipline, innovation, creativity and determination over a huge number of challenges faced along the way. So we face the future with excitement and with the same determination we brought to it over the last 15 years, committed to ensuring that Lynas is famous all over the world as the source of the best rare earths that money can buy.

Thank you, Amanda. I will now table the financial statements for the company for the year ending 30 June 2025, and consisting of the annual financial report, the director's report and the auditor's report. The annual report was dispatched with notice of this meeting to those shareholders who requested a hard copy, and electronic copy was sent by e-mail to shareholders with an e-mail address and made available on the ASX website at the company's website.

We would now like to ask for questions on Amanda's presentation and the financial statements. A reminder that only shareholders, proxyholders and authorized representatives can ask questions. To ensure there is an opportunity for everyone to ask questions, there will be a limit of 2 questions per shareholder during each Q&A session. Proxyholders, please state your name and that you are a proxyholder. Shareholders joining online can ask a question by selecting the messaging tab at the top of the Lumi platform. For more information on how to ask a question, please refer to the document tab on the webcast.

For shareholders in the room who would like to ask a question, please form a queue behind the microphone at the front of the room.

Hello. My name is Helen Manning and I represent the Australian Shareholders' Association. Today, I'm stepping in for my colleagues, Len Roy and Julian Mills, both of whom have done the hard work, I haven't. They wish to heartily thank the Board of the time they have made available before this AGM, and we discuss matters arising from the annual report. And these matters include financial statements, operational performance and governance matters. Today, we're holding proxies for approximately 6,000 shareholders, totaling about 600,000 vote -- shares.

Following Amanda's very vigorous presentation. I think we're just going to continue that theme. And it's always good to acknowledge achievements, and I have been told specifically to note the following. So it's a bit of repetition. The first is that the Kalgoorlie facility continues to ramp up to nameplate capacity, well done. The second is that the Malaysian output now includes heavy rare earth oxides DY and TB with the new $180 million facility, which will ramp up early next year. Well done. That Lynas has achieved record NdPr production at a time when NdPr pricing has been on the rise. -- well done. And good news is stabilizing the supply of sulfuric acid with BHP.

And we also wish to load the high-level working relationships, Lynas rare earth has built with its U.S. Japanese, Korean and Malaysian authorities to pursue partnerships in the middle magnet supply chains. Well done. And looking ahead, we acknowledge the towards 2000 strategy, 2030 strategy, sorry, which includes the construction of the Seadrift Texas heavy rare earth processing plant based on feedstock from Mount Weld and Kalgoorlie. We do note that the U.S. Department of Defense funding ground has been increased from the initial $120 million to the updated USD 258 million.

However, the offtake agreement is still pending. We appreciate the sensitivity but ask if you can update us on the finalization of the offtake agreement. Can you talk to this, please?

Amanda?

Thank you very much for all of the positive feedback and my colleagues on the executive team, a number of them are here today in the front row as well as Sarah. And I'm sure that they will happily take those positive comments back to our teams because it's always good to hear that. The U.S., you will not be surprised that I won't provide a chapter of the negotiations with the U.S. government apart from anything else because it does change, it fairly pretty quickly. So suffice to say that we are working on it very closely with now the Department of [indiscernible]. However, we are not relying on the government to access the U.S. market and [indiscernible] who heads up our sales team is actually also very focused on dealing with the end-use customers in the U.S. because their influence on the government is important as well.

So John and I talk every week in every way. He says, "Well, have you had something to deliver yet, and I keep saying no, but it should be next week, John. So we haven't got there quite yet, but I can assure you that it is a matter of focus.

Bob Richardson, private shareholder. Congratulations, Amanda and the team for a tremendous performance to 2025. My question relates to the next 5 years. You referred today to defending Japan's market share in relation to 2030. I'm assuming that the Texas plant might be off, it appears that the U.S. is not supporting Lynas to the extent that we expected. It also seems that Lynas is pivoting to Japan, Korea and possibly the EU. We know that for the medium term, it's only Lynas in China especially for heavy rare earths. And La Russia appears to be servicing with EU. Do you expect the U.S. price floors to be influential over the next few years?

Well, you've got a number of direct and a number of implied questions to that, I think. So I think the first thing to say would be, today, close to 100% of rare earths magnets are made in China and Japan, not in the U.S. So therefore, our direct customers are actually in East Asia. And so our relationship with Japan has always been at the heart of the success of our business. So there is 1 competitor, which is MP Materials who is producing separated NdPr oxide. And so when we talk about ensuring that we retain what is a hard for position as the leading supplier of NdPr to Japan. That is what we speak to. And so a little bit of that price. A lot of it has to do with being a reliable supplier of quality materials. And indeed, supplying materials that others cannot produce.

Now whether that's DY or TB or separated Nd, which but no one else actually does. Everybody else provides it as NdPr. These are all opportunities for us to differentiate ourselves. You're right, MP has got a better deal out of the U.S. have because I have this one major benefit, they're American, we are not. And we need to recognize and acknowledge that we will never get the same treatment in an America-first environment politically, which is what is their presence.

On the other hand, the American market is there are elements of it which are attractive, but it does not have the substance that, for example, the Japanese market has today or the absolute commitment and determination to develop skills and competencies that, for example, the Koreans have. So I wouldn't completely agree that our -- in terms of priority, but you are right. We are focused on Japan, we are focused on Korea. We are focused on the EU. We are focused on the U.S. And actually, we are focused on engagement with the Australian government as well and really getting a combination of benefits out of all of those relationships is what I think will give us some really solid foundations moving forward. The $110 million on floor price, we put very strongly to all governments, but it is excellent that there is support for projects which may or may not come online in 3, 4, 5, 10, 15, whatever, how many years it takes them.

There is a functioning supply chain today. We're at center at that we require the right sort of air cover to ensure that this functioning supply chain continues to operate.

Chris Berman, representing Kapilan Super and Bangkok Capital. Two questions for Amanda. The first question is in respect of the 8 October announcement of the MOU with Novion Magnetics in the United States. Question 1 is if and when over the next few years, there is an Australian magnet-making plant in Australia. Will Lynas enter into a similar arrangement with an Australian magnet maker?

I've just been told to speak closer to the microphone. Thanks for the question, Chris. It's an interesting question in its formation because the assumption that there may or may not be an Australian magnet maker is a very big assumption. One of the things that you need to make metal and magnets is reliable power reliable power within sort of the second benefit being low cost, right? Unfortunately, we -- across a whole variety of areas, it's not just because in Kalgoorlie. I was recently reading in WA about in Kwinana. They put in diesel gensets to a number of the operations there.

So we would see that it is less likely that there will be a magnet maker here in Australia. We do see that there are, I think, 7 or 8 new magnet making projects sort of globally -- and we are engaged with each of them on opportunities to partner in one or other forms, whether it is as simple as a supplier of feedstock or weather as with the case of Novion, sort of we're looking for, is there a joint venture model, which may be suitable.

So I might to understand the answer to the question 1 is if an Australian plant became operational, you would deal with it on the same basis?

Sure.

All right. Question 2 is, if in about 12 months' time, the current suspension by China, of its embargo at listric minerals embargoes with critical minerals, global critical minerals imports and exports is in line. And again, after the current suspension for 12 months due to the U.S. trade do, what, if any, response would Lynas make to that having regard the impact it would have on China as a market for both oxide and magnets?

Our assumption today is that the -- this is just a hiatus in terms of some of those controls. When we think about things like the price support agreement, effectively as the price moves up, China's pricing power, which has been exercised quite extensively over sort of our time in the market, it is reduced. However, China is very nuanced and very skilled at developing somewhat more sophisticated nonprice controls that we necessarily see elsewhere. And so the licensing regime as it was introduced in April, continues to be in place, and that certainly means that there are a number of customers who are unlikely to be able to source rare earths containing materials from China in the future. And so that is an excellent target for us in terms of business development.

A number of the areas which are part of the Chinese controls some of which were announced in October and some of which they are not resiling from include things like prohibition on the export of technology, on the export of certain inputs to rare earth processing, whether it's reagents, whether it's equipment, our experience is that there is no stepping back from those. We have a team who's worked since April on ensuring that we have alternate supply chains available to us for materials that we have to date sourced from Chinese suppliers. And we are confident that we are in a position to continue our operations even if the new regulations come back in a $0.04 to $0.05.

My name is Robert Kio, on our private shareholder with my wife. 30 years ago, when I had responsibility for the Mount World lease on half of CSBP, I was advised that at least a holder of the past lease that covers that area, had collected wherever we found on traditional owner artifacts and buried. My question is in your mining, exploration and other activities, have you ever encountered any of these materials? And do you have protocols to manage sort of in the event that you do?

Okay. Thanks for the question, Robert. Our objective is always to not just be respectful of the traditional owners on the land on which we operate, but actually to constructively engage with them. And the [indiscernible] who are the traditional owners in the area in which we operate, we have engaged with them over many years, even though their claim was only validated this financial year, yes, earlier this year. But we have engaged with them and had them come in and do a number of cultural surveys of the area. I had never heard about things being buried specifically. But they have done a number of cultural surveys.

We have a social, cultural and heritage management plan with the [indiscernible]. And in fact, they have advised us that as they've done these, this essentially, our land was what they call walk-through territory. So it is less likely to have some of the sort of artifacts that you might find in other areas. We are proud of the fact that we have a number of contractors not just indigenous own businesses but are traditional owners. So our mining contractor ,[indiscernible] Mining is owned by is owned by [indiscernible] as well as some of the activities that we have in Kalgoorlie, where our contractors are also businesses which are owned by members of the [indiscernible].

So we've not heard of that specifically, but we have done a number of cultural surveys and would be surprised if we suddenly happened upon occasion of artifacts.

Steven Fonte shareholder. I'm just wondering with our competitors mapping of our health, how long does it take from the time you find a viable deposit until it gets into production. Our journey has been long, but maybe it's short of now. I don't know.

Thank you for the question, Steven. And this International Rare Conference that we were at recently, there was an industry engineer who had done a study on actually critical minerals processing facilities and compared them against something called the McNulty curve, which talks about how long it takes you to get from -- this is forgetting the exploration, but from -- you've built a plant and getting it up to nameplate. And the McNulty curve has 4 layers, the lowest takes for like for ever and the highest is very fast -- move up.

Lynas in Malaysia started for the first 2 years. I think that we were even lower than McNally for then stepped up to McNulty one. The interesting thing is that his assessment was that all of the projects, which are sort of being promoted around the place, they all assume a McNulty One start-up, which no critical minerals process or anywhere in the world has ever achieved. So if they've got something which says we're going to have separated material in 3 years' time, I'm not actually losing a lot of sleep on it right now.

Jane, Sarah, are there any online questions. Sorry.

My name is Hal, shareholder. Thank you, Amanda, for such an informative presentation. Would you also like to say a few words about how lines is addressing environmental issues, both in mining and refining the cost trading aspects?

Sure. As I said, the very initial vision for Lynas was a global firm that processed arose on a sustainable basis. And sustainability sits at the heart of everything that we think about, whether it is things like the significant investment that we've made in the rare earths -- sorry, in the power station at Mount Weld or in our management practices with respect to the residues that we produce either -- at any of our sites. And so it is actually a matter of great deal of frustration for us that still there are ride -- a journalist who will write that it's inevitable that you produce toxic residues, it's not inevitable. It is like any industrial activity. You can choose to do it in a way that is sustainable or you can choose to do it in a way that is not.

And in China, 20 years ago, you could have gone and visited a rare plant is still making plant, a coal plant and you could have found practices that were not sustainable. Today, if you go to China, you will see that many of those have been addressed. And so -- but the rare earth industry has suffered from this sort of being a badge that is being applied to the industry, which is not true. So at Lynas at our heart, we seek to be safe for our people, safe for our communities, safe for our environment. We have never been involved in a major public -- in a public health event. And so our philosophy is about ensuring that we manage our processes, and we manage our residues accordingly and 0 harm means that there is no way for them to actually sort of leave our operations. So it's absolutely at the core of everything we do.

I have read in the news a few years ago, specifically in Malaysia, you have some problem with pollution from the government or from environmental.

Yes. Well, with due respect to some of the journalists in the room today, you can't read every -- you can't believe everything you read in the newspaper. And so in Malaysia, we have a number of regulations. We have been subject to 3 different external reviews of our operations, which have found in each instance that we are compliant with regulations and that we voluntarily adopt international best practice where local regulations are not as significant as elsewhere and not at best practice.

In terms of the way that we manage in Malaysia, as I said, we manage aligned to regulations and the issue that many like to talk about is the level of naturally occurring radioactive material, either in the material or in the residue. It is a feature of the fact that Mount Weld is dated as being about 2 billion years old. So the radio activity associated with our materials is classified as very low level. So that is in the feedstock. It is also in the residue. And it compares -- so it's at about 6 metros per gram. To put that into perspective, that's not far off what you might get in the tails that you have in your kitchen, for example.

Sarah, Jane, online questions.

Thank you, Chair. We do have 4 online questions. The first 1 is from Hilarie Investment Corporation. Can we please get an update of drift in Texas seems to be a stand still most likely held up by bureaucracy has lines been superseded by MP Materials and when do we expect this to be rectified, please.

Amanda?

I thought you could take it out time did some work girls -- so that's just what we live with every day.

Okay. I'll take that. So shareholders will have seen that in the presentation. that accompanied our successful capital raising in August. But 1 of the things that we revealed was that due to issues we were experiencing with the site in Seadrift, it was possible that the Seadrift facility would not proceed. The update is that the resolution of those issues hasn't progressed. And I think it is unlikely that the proposed facility will proceed.

Thank you, Chair. The next question comes from Mr. Stephen Mayne. Thank you for expanding the $75 million share purchase plan and accepting all $182 million in applications. How hard did you market this offer, which was 23% in the money on the day the shares were issued. And then he's gone on to suggest some reasons.

We were pleased to offer shareholders the opportunity to purchase shares in conjunction with the institutional placement. I think investors will know that often, the quantum of shares made available to shareholders under the share purchase plans is constrained on the basis that we've done a number of capital raisings. We elected as a Board and we're pleased to elect as a Board that we shouldn't constrain the applications under the share purchase plan. So valid applications were all issued. We didn't market the plan hard. That's not the idea of these shareholder purchase plans.

The idea is to give shareholders many of you who have been with us for an extended period of time as we've heard the opportunity to acquire shares. And on behalf of the Board and especially on behalf of Amanda, it was very pleasing to see the level of support that was experienced. I think initially, we thought that, that support level might be $75 to $100 million, but it was considerably greater than that, and that was very gratifying.

Thank you, Chairman. The next question is on the remuneration report from Mr. Stephen Mayne. Thank you for disclosing the proxy position early to the ASX along with the formal addresses and well done in receiving such strong support on all resolutions. The annual report says we have 47,176 shareholders due to even 2% of the vote when disclosing the outcome of voting on all resolutions today, but particularly this remuneration report item, could you please advise the as how many shareholders vote for and against each item similar to the scheme of arrangement?

I'll take that on notice.

Thank you, Chair. The next question comes from Haran Investment Corporation. Given the speculation as to the merger of Lynas and MP Materials earlier in the year, has the essentially been closed -- or is there still a possibility of this being renewed, given the strategic advantage of Lynas in conjunction with the domestic advantages that MP enjoys in America?

Yes. I think the time frame in the question is slightly out that it may have been 18 months to 2 years ago. There are no current dialogue at the moment between Lynas and MP. The combinations can raise their head at any time because they involve a number of parties, and it -- we could be approached at any time by any of these parties either by NP or other entities that's always a possibility, but there are no discussions currently on foot.

That's the last online question.

Yes, Bob's down here wondering whether he wants to do something to incur my roth. So yes. Yes. He's brave he was in the Air Force for a long time. .

[indiscernible] of my investor colleagues of a long duration has texted me to say that just asked the question that there was a reference to separating [indiscernible].

That's okay. We'll assume you've asked the question, and we'll say you got a satisfactory answer.

At the end, you were going to separate Thorium for the WLP. I heard any more about that. Is there anything you could initiate?

We have a commitment and have invested over the last 3 years, up to 1% of our revenue in research and with a key investment being in thorium extraction and we have proven that it can be done at bench scale and pilot -- a small-scale pilot plan at -- and store. To take that further, we would need to be doing much larger industrial-scale trials. And then we would need to do sort of some quite substantial modifications on the plant.

The process brings with it benefits. It also brings with costs. And ultimately, we will need to make it determined -- and some challenges because instead of dealing with this very low level regulative material, we end up creating a much higher pure thorium product, which requires additional handling and management. So the project is ongoing. Most recently, just last month, we had a technical conference in Kuala Lumpur, which was attended by about 500 people, including a lot of the academic community on opportunities to continue to develop and invest in methodologies and mechanisms for management, not just at WLP, but for other, like Malaysia is seeking to develop its own ionic clays which also come with radio activity actually at a much higher level than our alongside those materials.

Did you want to add anything to that, Pol?

Dare I asked about resorcinol.

Yes. it still remains that the concept of CondiSoil, which was approved by all the Malaysian relevant department, government departments. -- is consistent with the IAEA's guidelines on how to deal with residues of the sort that we produce at Lynas Malaysia. However, that ship has largely sailed because we have invested in the construction and operation of the permanent disposal facility for the WLP, which is now substantially complete. It's fully complete in terms of construction, but now almost substantially complete in terms of the depositing and the material into that. And so it's a permanent facility. We won't be picking it out again.

Are there any further questions?

Chairman, we just have 1 further online question, which is the issue about power outages related to renewable energy issues?

Not to our knowledge. It is a combination of both a generation and a network issue at Cargile, -- for those who know carats on the end of a single high-voltage power line, that constrains the amount of energy, which can be delivered, but there is also issues associated with the amount of energy, which is available within the network. And so we don't see it being associated with the source of the energy. It is primarily a networking issue network issue.

And as there are no further questions at this stage, we'll proceed with the formal business of the meeting. Attendees in the room will have received one of the following cards upon registration: Blue, which is for voting shareholders; Orange, which is for nonvoting shareholders; and White, which is for guests. Each resolution will be discussed and then voted on by way of a poll. Details of the proxies received for each resolution will be shown on the screen prior to each resolution being put to the meeting.

As stated on the proxy form, I will vote undirected proxies in favor of each resolution. Each shareholder who is present in person and who is eligible to vote at today's meeting, will have received a blue colored voting card from the registration desk. At the conclusion of the meeting, representatives of boardroom will collect these cards. The Notice of Meeting having been duly distributed to all shareholders will be taken as read. After each resolution is tabled, I will ask for questions from shareholders online and each -- and shareholders in the room.

Resolution 1 seeks approval of the 2025 rem report, which is set out in the company's annual report. The remuneration report sets out specific details of the company's remuneration framework during the year ended 30 June 2025. Proxies received for resolution 1 regarding the remuneration report are now shown on the screen. Are there any questions on this resolution?

If there are no questions, I now put the resolution to the meeting for voting by way of a poll. On resolution -- the text of resolution 1 is shown on the screen so everybody had a chance. We'll now move to Resolution 2.

Resolution 2 relates to the reelection of Vanessa Guthrie. The Board values Vanessa's contribution and experience and the Board members other than Vanessa unanimously support the reelection of Vanessa to the Board. Details of Vanessa's background and experience are set out in the explanatory memorandum and on the screen. The proxies for this resolution are also shown on the screen.

And I would now like to invite Vanessa to briefly address the meeting.

Thank you, John, and good morning, fellow shareholders. Firstly, my apologies for not attending our AGM in person today. I have had an urgent family medical issue arise yesterday, and I therefore need to be with my husband. So I'm joining you online instead, and I thank you for your understanding. I'd also like to thank you for your support of Lynas, our Board and for me as a Director for the past 5 years.

In my time on our Board, I have endeavored to bring my 35-plus years of experience in mining, minerals processing and critical minerals to our decision-making as well as a strong governance lens including over 9 years serving on a variety of ASX-listed companies. As a result, along with my fellow directors in delivering value to Lynas through our growth agenda, I've worked hard to also contribute in 4 key areas.

Firstly, an unflinching focus on the safety and well-being of our people through our EHS Committee. Secondly, the engagement of our employees and retention of key talent as Chair of our Nominations remuneration and Community Committee. In expanding our understanding of the World Class Mount Weld carbonatite deposit through my deep geological experience. And lastly, the development of our strategy that positions [indiscernible].

Thanks, Vanessa. Are there any questions on the resolution? If not, I now put John? Sure. Sorry. sorry.

My sympathies for your family situation of an asset. We have asked you -- we have noticed that you have several board positions, and we were hoping that you might talk to your workload, please.

I think she's back hard, particularly.

Yes. Vanessa, do you want to say something? I'd just say in a preliminary way but 1 of the things that I as Chair monitor is the workloads of my colleagues, Vanessa's very hard working director has never missed a meeting and accordingly, well, we've taken Vanessa's workloads into account in framing our support of her reelection. Vanessa, is there anything you'd like to add to that?

Yes. Thank you, John, and thank you for the question. And I'm sure you will have noted my recent appointments to another Board. As a result, in the first half of next year, I will be looking at and rationalizing my portfolio to make sure that I have absolutely the time, energy and commitment and motivation to commit to Lynas as a director. .

We just wanted to ask the question.

Thanks. Are there any further questions? And if not, I now put resolution to the meeting will vote on a poll. The text of Resolution 2 is shown on the screen. And I'll now move to Resolution 3.

Resolution 3 relates to the proposed election of Kathleen Bozanic. Kathleen joined the Board last month and brings over 30 years' experience as a finance professional of listed and private mining and contracting companies. The Board other than Kathleen unanimously supports her election to the Board. Details of Kathleen's background and experience is set out in the explanatory memorandum and on the screen. The proxies for this resolution are also shown on the screen.

And I would now like to invite Kathleen to briefly address the meeting.

Thank you, John, and good morning, everybody. I'm honored and excited to have the opportunity to join the board of your company and to work with the talented and experienced group of directors and executives at Lynas. Lynas is an exciting dynamic company with huge potential, and I believe in its strategy and the impact it can have on a global stage.

Given it's the first time you've probably got to hear from me or me, I'll give you a little bit about my experience that's relevant to lines. As John said, I've been working for more than 30 years as a financial professional in mining, contracting, engineering and construction businesses, including as a partner of Deloitte an executive and a non-executive Director. During this period, I've gained a wide range of experience including all aspects of finance and governance capital management and allocation, risk, strategy, Investor Relations and IT. I've also run a large construction project. further have experience in critical minerals and downstream chemical processing.

I've worked in well-run large businesses with processes and procedures that are needed to safely and effectively execute and grow. I've also been involved in companies with challenges -- all have had to mature as they've grown. I'm passionate about people, and I really love building talented teams that are high performing. I'm currently the CFO of IGO Limited but seem to retire -- sorry, if that's not heard online and serve on the Boards of WA-1 as Chair and Rugby Australia, also on the Senate of the University of Western Australia.

If I'm successful in gaining your support to continue on the Board, I look forward to contributing to building and adding that new to Lynas. And thanks so much for the opportunity to speak today.

Thank you, Kathleen. Are there any questions on this resolution? Now if there are no questions, I'll now put resolution 3 to the meeting for voting by way of a poll. The text of resolution 3 is shown on the screen. And I'll now move to resolution 4.

Resolution 4 relates to the proposed grant of performance rights for the benefit of CEO and Managing Director, Amanda Lacaze. Each performance right is the right to acquire 1 share in the company in the future. More details regarding the performance rights that are proposed to be issued to Amanda are set out in the explanatory memorandum. Proxies for the resolution are shown on the screen. Are there any questions on this resolution?

This 1 quickie. [indiscernible] price was used for the forward share -- it's containing the meeting.

The rights are calculated using the 5-day VWAP following the date of our release of Lynas' FY '25 financial report being a price of $14.26 per performance rate.

That's the answer. Okay. Are there any further questions? I now put resolution 4 to the meeting for voting by way of a poll. The text of resolution 4 is shown on the screen.

All right. Ladies and gentlemen, that concludes the formal business of the meeting. And as there are no other items of business that can validly be brought before the meeting, I declare the formal part of the meeting closed. I would now like to complete the poll process and advise that I will close the online voting system in 1 minute. Please ensure that you have cast your vote on all resolutions.

For those shareholders present in the room, the instructions for completing your blue voting card are as follows: First, please write your name in the space provided at the top of the card. Second, unless you wish to vote a number of shares in 1 manner and another number of shares in a different manner clearly mark 1 only of the boxes on the voting paper next to each of the resolutions. You may vote for or against each resolution. Please sign in the space provided at the foot of the voting card. And finally, please lodge the completed blue card in the ballot boxes that are available at the doors when you exit the room or please hand your card to a boardroom representative.

For shareholders, Online voting is now closed. The results of the poll will be announced to the ASX and will be posted on the Lynas website later today. Ladies and gentlemen, thank you once again for attendance at today's meeting and for your continued support of our company. That concludes today's proceedings. Shareholders in the room today, we hope you will join for some refreshment in the foyer. Thank you.

Good day, and thank you for standing by. Welcome to Lynas Rare Earths Quarterly Results Briefing. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Lynas Rare Earth. Please go ahead.

Good morning, and welcome to our investor briefing for the September quarter of FY '26. Today's briefing will be presented by Amanda Lacaze, CEO and Managing Director. And joining Amanda today are Gaudenz Sturzenegger, CFO; Daniel Havas, VP, Strategy and Investor Relations; Chris Jenney, VP, Sales and Market Development; and Sarah Leonard, General Counsel and Company Secretary. I'll now hand over to Amanda Lacaze. Please go ahead, Amanda.

Thanks, Jen, and good morning, everybody. Thank you all for joining us this morning. And I am sure because I actually have a sneak preview that there are many questions. There are many in the queue already. So I will keep my introductory comments relatively short. I expect many of you will want to talk about the various geopolitics. We do live in an interesting world, don't we.

But I want to start by talking about our business performance because we had a strong quarter in terms of business operations. The operating cash flow at about $55 million positive, was a really pleasing return to a more -- what we would see as a better level. And we see that, that as we look at current market settings gives us quite a deal of confidence as we move forward.

Of course, we saw -- we are still seeing some runoff, particularly associated with the major projects, particularly Mt Weld, but that should mostly be flushed through the system by the end of this calendar year. That strong operating cash flow, of course, reflects sales. I know that everyone likes to get very focused on production numbers. And of course, we are very focused on production numbers.

But what actually matters is what we sell. We don't bank tonnes, we bank dollars. And so we had a good quarter in terms of sales at $200 million for the quarter, the best in several years, reflecting both the higher volume and also the higher prices that were achieved during the quarter.

Production at just over 2,000 tonnes of NdPr and sort of very positively nearly 4,000 tonnes in total. I thought it was quite interesting that we had a number of sort of -- we've seen a number of comments about, well, it was a bit less than what was expected. But then when I really interrogated those, we're talking about less than 100 tonnes being the difference between expectation and performance.

Put that in perspective, it's about 4 days production for us. So we had our production where we wanted our production to be. It served all of our key customers without creating any supply side pressure or causing us to need to sell ahead of finalizing a number of agreements on which we are working.

With respect to the heavies, and I may regret the fact that -- no, on the heavies, we have, for the first time, disclosed the amount of Dy, Tb. And once again, I read some commentary about it being a bit lower than was expected. And I would remind everyone that the way that we have characterized the Dy, Tb -- so we've got at Malaysia at present is it was really an opportunity sort of development for us.

We had some mixer-settlers available. It's just a small circuit which is selectively separating a portion of the Dy, Tb, not even all of it within the SEGH that we produce alongside our current NdPr, but sufficient to test the market ahead of our larger expansion.

I would also just to assist people to understand this, we're not actually selling our SEGH into the market at all, at present we are stockpiling it ahead of future processing capability. And then in response to some of the questions I've had about sort of sales volumes and how quickly do they come online. Some are done and dusted. Others, this is a new product and customers have certain qualification periods.

Suffice to say that in terms of testing the market, we have identified extremely strong demand and we have also identified a preparedness to pay because of the scarcity of the material from outside China sources. And of course, that is the reason why it is the first of our -- towards 2030 projects that we will be bringing online, which is the full-scale HRE separation facility.

And to do the full-scale separation requires us ultimately to put in a new building, put in new mixer-settlers, precipitation, filtration and tunnel -- and furnaces. So -- but we -- as I think everybody who follows us knows, we are always keen to move as quickly as we can. And so we have looked at what are opportunities to incrementally increase production as we move forward with the larger plan.

And that includes doing some work with our current FX configuration, which would allow us to bring samarium online, samarium production online in the first half of 2026 calendar year. And samarium is an element which is in demand at present. We require those customers who need it to finalize some agreements with us on price.

As I said, the little circuit that we've got at present is sufficient to have given us an opportunity to test the market. And as we think about how we derive value from our heavies, it is a combination of the margin just on that sale of the heavies. But bear in mind, it's relatively small market. The total outside China market for Dy, we estimated about 400 tonnes. So there's a certain amount which comes from just the pure margin on sales.

And more beneficially really in the medium to long-term is the ability to bundle it with our other products in a way that serves customers' total needs rather than them having to have multiple suppliers.

During the quarter, operations ran very smoothly. At Mt Weld, we operated on our old plant for most of the quarter as we were completing our commissioning activities for the new plant, which are progressing to plan. And we had a pretty exciting time where as we're bringing on our new gas hybrid renewable power station, we were able to run the plant for, I think, close to a week or on 100% renewable power only. And that's pretty exciting for everybody in Lynas.

In Kalgoorlie, as we've identified, we made certain flow sheet adjustments, which are now delivering results. And we expect now to be able to progressively ramp up production in very good order. And at the LAMP, running very smoothly. But as we've indicated in the release, we will be doing these tie-in works for Sm and SX during this quarter.

That alongside some of the continuing market volatility means that we are going to manage our production rates very carefully and may trim that to accommodate some of that tie-in work because we see the early production of samarium as being very valuable.

During the quarter, many of you who are on the call participated in our capital raise, which sets us up for the next stage of growth, creatively known towards 2030. We've already disclosed some of the areas where we will be utilizing that funding, the HRE -- new HRE plant in Malaysia being the most significant.

And then we've also released 2 magnet non-binding MOUs, but I can assure you that we are progressing to definitive documentation of those MOUs as quickly as possible. We are also continuing to negotiate long-term supply agreements with key end users in each of the sort of key categories. So magnet buyers most certainly, but also electronics. I mean this is a high demand market and particularly in terms of micro capacitors, significant growth and a preparedness to pay for quality, which Lynas can deliver.

So then turning a little to the geopolitics and the issue -- the effect on the market. And I say again that we are managing carefully and sort of managing risk as we look into this very volatile market. But lets suffice to say that rare earth has -- well, in our view because we think rare earth is the most important thing, we wake up thinking about it in the morning and go to bed thinking about it at night. But it's definitely got the attention that it deserves from various different governments.

And as you look at some of the announcements that have been made, you can see that for now, the key focus has been on some of the development projects. And I would offer the view that this is because they are relatively easy for governments to execute with their current funding instruments. Every government has something like our EFA or has other sort of [indiscernible] or other sort of debt funding capability.

But some of the other sort of policy initiatives are a little more complex and will require governments to think about some different systems to be able to support it. But I would assure you that governments do understand that this is not a simple supply side fix, even though some of the announcements may lead you to think that they think that right now.

There is a recognition that -- there is a market failure, which is shown in the price and also in the development of processing capability, including metals and magnets outside of China. And it's actually a little less about resource, but resource has a very long lead time, but it is more about market failure.

And I think as everybody who's even sort of a passing observer would know, the MP deal does address all these elements. It addresses the issue of market failure with the price for. It addresses the issue of market value and processing with its support for the development of magnet making in the U.S. And I think that it seemed to come out of nowhere, but MP was facing an existential crisis as a result of the tariffs and trade restrictions between China and the U.S. and sort of the timely implementation of that there was important.

But I think that what we're seeing right now is many governments who are actually working together, we're looking forward to hearing some expected outcomes from the G7 to ensure that the policy settings are right and that the like-minded governments are aligned in their approach. And I think governments also understand that there is no use pouring capital into this sector if the businesses can't be profitable in the long-term. And of course, that is the importance of getting the policy settings right, particularly on price.

For Lynas, yes, because as I said before, we always like to get things done yesterday. Working with government can sometimes be a little frustrating because things take the time that things take. However, I would remind everyone that as the only proven operator in the current proven supply chain, we have options and we have value. And we will not spend that value cheaply. But whilst the market continues to be volatile, we will manage prudently. And I would simply point you to our track record of ensuring that we do get full value from whatever dynamics we see in the market.

So for us, as we look at this, we see a good quarter in terms of performance, the uplift in price because we are a current producer, is flowing through into our bank accounts immediately. And we continue to see the international focus on the rare earths market is ultimately a very positive thing for Lynas and look forward to sharing with you in the future some better outcomes in that space. So with that, I'm happy to take questions.

[Operator Instructions] First question comes from Daniel Morgan from Barrenjoey.

A question -- my first question is just on production volume, which was slightly down sequentially quarter-on-quarter. Just looking to understand that a bit more. Is that a reflection of demand being still patchy? Is it you're looking to negotiate offtakes and so why -- let's not produce a lot and go into inventory? Or is it -- three, there has been some disruption to the operations from tie-ins at Mt Weld, some modifications to fixed volume -- fixed quality at Kalgoorlie, et cetera. Can I just understand how -- volume, how are you looking to set the business near term?

Yes, Daniel, we produced almost exactly what we intended to produce. So yes, you're right. I think it was 80 tonnes, 70 tonnes less than it was last quarter, but somewhere around about that 2,000 tonnes was we were very comfortable with that. It was not -- there were no significant operating disruptions and certainly not from the newer assets. And yes, we don't -- we never see value. I mean, we carry a little bit of inventory, but we never see value in producing a lot of product for inventory.

And this was sufficient to ensure that we met customer needs across all geographic markets. So we do continue to make sales to, of course, our Japanese customers, but also to customers in China and in the rest of the world. But we were able to serve all of that and there were no issues with Mt Weld. Kalgoorlie, as we said, we had operating at lower rates as we did make some flow sheet changes there, which now appear to be doing exactly what we planned for them to do and the lab worked very -- exactly according to plan.

Sorry, just to clarify, should I take that as 2,000 tonnes a quarter as sort of where the business should sit for the near-term until something changes?

I think we will -- I think the market is so volatile right now, but we will be cautious about sort of even giving that vague of guidance, Daniel. Suffice to say that we will ensure that we are continuing to meet the demand of all of our strategic customers and are working on developing new sales agreements.

Next, we have David Deckelbaum from TD Cowen.

Congrats on all the exciting announcements out there. I wanted to follow up just to talk about the heavies facility in Malaysia and the priority around samarium. Is that informed by just process flow sheet? Or is that where you see the highest value products coming out of the heavy mix? Or is it in response to extremely near-term potential around offtake agreements?

It's mostly about demand. So the highest demand materials of the Dy and Tb. Unfortunately, we can't significantly increase that production until we put in that new circuits. The samarium we can do by making a change to one of our circuits, which adds an additional outlet. And so given that there is significant demand for samarium in some very targeted sectors, we think that we can do that without causing too much disruption to production.

So that would mean that instead of having to wait until 2027 for that material, it will -- it should be available in the first half of next year. But it definitely is an in-demand material, but we are finalizing relevant price agreements on that as we speak, which are an important part of us sort of deciding to proceed on this pathway.

Next question, we have Jonathon Sharp from CLSA.

Amanda and team, congratulations on yesterday's announcement, definitely a big positive. And my understanding is that this will likely open doors to other customers, not just with heavies, but also NdPr. So really should help with those NdPr sales as you ramp up, which is positive, but that's not my question.

My question is around incremental cost of processing the heavies, specifically in the solvent extraction separation phase. Now I know you're not going to tell us what the costs are. But so maybe I'll ask it another way, what proportion of total unit costs of the heavies within the solvent extraction? I would imagine it's quite low.

Okay. So there are no -- with what we're doing right now, there are no significant incremental variable cost to the separation of the heavies, right? Because we had -- the circuits were already in place. They already had -- we did have to load those, but that's already been done sort of in the back half of last financial year.

And the contribution to cost of running that circuit and running the furnaces and product finishing is not significant. So really, this is giving us a almost -- this tiny little circuit gives us a bit of a free kick. When it comes to the bigger facility that will come into operation in 18 months' time, once again, we would see that it's not going to be -- there will be some incremental costs, but what we're basically doing is today, we process or up until sort of May, we process the HEG. It goes through solvent extraction and then it goes through product finishing, the wet cycle and then into the -- and is [ confined ].

And so what we're doing is that we won't be using those facilities, and we will be able to use what we've freed up there for other products. And it will be simply going through the different facilities. So we have the capital cost of all of the new mixer-settlers. We will have the capital cost of first fill of those loading them with material, but the incremental cost to process will be relatively small.

Okay. I'd love to know the amount, but I know you're not going to tell me, so I will jump back in the queue. I have another question later.

Next, we have Chen Jiang from Bank of America.

My question is for your price realization for this quarter. Well, in AUD, $54 per kilogram, but you have heavy rare earths produced for this quarter. For example, the European so-called benchmark for terbium is around $4,000 per kilogram. That's like 4x versus China's price, right? And the same as dysprosium. I'm wondering what happened to your price realization for this quarter?

NdPr quarter-over-quarter in China was up 26% and then you have heavy. So if you can provide us any color on the heavy price, how does that work, the European price versus China price as well as your NdPr price? Like I'm not saying that NdPr price jump realized in your revenue.

Sure. Okay, okay. First of all, the heavies pricing, right, you can see we made 9 tonnes, right? Even if we sold every one of those 9 tonnes for, I don't know, $10,000 a kilo, it is not going to move the dial on the average pricing yet, right? So let's just put that aside. And then on the NdPr, as we've explained previously, some of our major customer contracts are reference an end of prior month price. So when the price is going up, we tend to lag it a bit on the way up. And when it's coming down, we lag it on the way down. So you have not seen the full value in this quarter of the uplift in price during the quarter. And that's just a reflection of the way that our pricing contracts operate.

Can I have a follow-up, Amanda? Just on what you commented on -- on the NdPr. So the weaker than expected realized price is because your pricing contracts lagged a month or 2 and then you have increasing NdPr price. And then for the heavies, which means you quoted some amount, but are you achieving the sort of the European price versus the price...

I'm not even sure where you're getting the European price from. We are achieving on the products that we have sold to date, we are very pleased with the price, and it is not pegged to -- it is -- each of the prices is a customer-specific price and negotiated with each customer on a commercial and confidence basis. But it is not anything even vaguely like the inside China price. It is -- as we said, the market demand is strong, and we have a great deal of flexibility in choosing to whom we sell and at what price we sell.

Next, we have Paul Young from Goldman Sachs.

Amanda, another question on the heavy rare earth circuit. Just trying to understand from a -- first of all, thanks for providing the production data. It does take a while for the heavies to work through the circuit a couple of quarters. So I understand there's a lag there. But just trying to understand the capacity and production from a modeling standpoint, what we should be throwing in the models.

And I know that you did have -- or you do have, sorry, 1,500 tonnes of SEG capacity. And this announcement, the $180 million, you're achieving another -- you'll get 3,000 tonnes of heavy rare earth oxide products. So just wanting to understand, is this incremental? So at the end of this, are we getting 1,500 tonnes, and 3,000 tonnes to 4,500 tonnes of total capacity of heavies oxides?

No, no, no. We won't -- we will have the one outcome, which is the tonnage that we were talking about yesterday. It is not additive to the tighter little Dy, Tb circuit that we have in place right now. Once we put in the new facility, right, we will then free that circuit up and we will use it productively for some other purpose.

Yes. Understood. Okay. That's helpful, Amanda. Just a Part B to that then. Just with Mt Weld, when you look at on the go forward, when Mt Weld fully ramped up and you look at the Duncan or when you look at the assemblage and the heavies coming through, whether you campaign that or not? Can Mt Weld under the expanded scenario or the expansion, I should say, fully feed that heavy circuit? Or will you have -- at what percentage? And will you have spare capacity to take, I guess, a third-party on clays in Malaysia?

Yes, yes. Okay. Excellent question, Paul. We could high grade -- I've got quotation marks around in the air here, but high grade for the heavies at Mt Weld, which would mean that we would deplete them faster, of course, if required to 100% feed that circuit. But between now and when that circuit comes online, we have a number of things that we need to do to improve.

We will -- we -- our recoveries on heavies are not at the same rate as our recoveries on light because we haven't managed for that over many years, to be fair. And they do perform differently right from the float circuit in Mt Weld through to Malaysia. So we will be -- I want everyone to always understand we are thoughtful in the way that we manage these things. And so there's no point in sort of mining more heavies, but then having it report to tailings because we haven't actually optimized our processing. And we've got time to do that before the new plant is operating in Malaysia. So that's the first thing for us to do.

But our preference would be that, that facility will take feedstock from -- and absolutely, our preference is from developed ionic clay deposits in Malaysia in addition to the feedstock coming from Mt Weld. And so we have a team whose job is to work with various Malaysian partners on that development process. The Malaysian ionic clay, all indications are that it will perform in the same way that the ionic clays in Southern China or Myanmar and Laos perform, and we see this as being an excellent opportunity to further contribute to Malaysian economic development.

And also because as we know, ionic clays will typically give us a higher sort of proportion of heavies and so therefore, suitable for feeding into this new plant. So that's a very long answer to your question, Paul, which was, yes, we could, if we had to serve it out of Mt Weld, but our preference will be that we have at least 2 feedstocks and potentially more if any other projects come online into that facility.

Next, we have Mitch Ryan from Jefferies.

You called about -- just can you comment on the cost pressure as you move consumables supply chain away from China? How long do you expect until your supply chain is completely independent? And could you help us understand sort of what percent of your cost base do those consumables currently represent?

Yes. So we are -- we have been working on this since the first trade spat that started in April because China is quite nuanced in its use of non-price controls alongside the price controls that it's used over time. And so we have identified alternate supply sources for all inputs in our facilities, both consumables and also equipment. We, at present, see that there will be some cost penalties associated with those, but we won't see those in this financial year because of the way that we've managed inventory in particular.

So given how much things can change at present in the rare earth world on almost a daily basis. I'm disinclined to provide a cost forecast, Mitch, for sort of 9 months' time. But we are confident in our ability to source relevant materials without crippling the business. I wouldn't want to be trying to build a new rare earth facility, however, just right now with no access to any China equipment at all.

When we built Kalgoorlie, we did make a decision not to put any Chinese equipment in it. It's probably got to probably on the equipment cost, cost us probably about 25% to 30% more than if we had Chinese sourced equipment. So I think this will be a bit of a challenge for some of the new projects coming -- proposing to construct over the next little while.

And just given that comment, I assume, therefore, that the heavy rare earth circuit that's being proposed, Malaysia will also apply the same strategy.

Sure. Yes. Well, Ryan, I can assure you this that if we went to a Chinese supplier today and ask them to ship to Lynas a new piece of kit of some sort that they would probably say, thank you very much, but our production line is full, if they were being polite. And if they weren't being polite, they just say no.

Next, we have Reg Spencer from Canaccord.

I'd like to ask about a topic that seems to be getting everyone breathless at the moment, and that's price floors. We know that such things have been floated with respect to the Australian critical minerals reserve, and we all have to think that Lynas would be a candidate to get some such floor pricing. What do you think -- what kind of impact is that going to have given that you are working on additional supply contracts independent of Asian Metals Index. And aside from the Japanese contracts, what kind of impact on pricing should we be thinking about? I'm really just trying to figure out where the base level pricing or reference point should be for your main product being your NdPr?

Yes. Good question, Reg. I think that governments do recognize, as I said in my opening comments, that it's one thing to put the capital on the ground to build a project. The next challenge is to make it work. But it's all together another thing for that to become a profitable business, and to become a profitable and sustainable business, it needs to have pricing -- a functioning market in terms of pricing.

So I think governments absolutely do understand this. And they also understand that whilst it's important to support and we support this development of the industry over time, I mean the ultimate remedy for all of this is to have an outside China industry of sufficient scale to balance out the inside China capability.

But today, there is only one -- there is a functioning supply chain, and Lynas is at the heart of that supply chain. And so therefore, ensuring that policies are put in place, which support that supply chain success is really important. So I think, as you said, Reg, it is highlighted in a number of the announcements. I think we look here in Australia, and we see that the government is not fearful of taking action to support or to intervene where industries are at risk.

But I think that what we've got is a number of governments who are seeking to make sure that whatever they do is aligned and ultimately constructive. Having said that, our view would be that the MP deal sets the flag -- goal posts here, that would be a better way to describe it wouldn't. And I mean the goals, not the behind.

I have a follow-up associated question to that, but I'll take that offline and pass it on.

Next, we have Austin Yun of Macquarie.

Just a quick one. As you point out in the opening remarks, MP is not a full solution for the U.S. government. I'm conscious that you do have a project in the U.S. right next door and feeding into this heavy risk demand. keen to get an update on that discussion and a lot has happened in the last few weeks. Does the current market condition provide a bit of support to accelerate that project?

We have referenced this in the report, and we also did use a carefully considered form of words when we went to the market for the capital at the end of August. We -- where we are at present is that there is significant uncertainty as to whether we will proceed with that facility and if so, in what form. But we continue to work with the DOW and in particular, on offtake agreements, which will ensure that the DOW has the materials, which are critical for their applications.

And that Lynas is in a position to be able to gain benefit from capability and that includes the construction of the plant in Malaysia. I think I've talked previously about sort of the fact that when we are doing something ourselves on our own sites, we're able to deliver projects much more quickly than on any other scenario and much more cost effectively. And ultimately, that's why we've made the decision to sort of focus our attention on delivering the new plant in Malaysia.

Bearing in mind, that a lot of our engineering and design work that we've undertaken over the past 4 or 5 years actually feeds in very productively to that. And it's well worth remembering also that it remains that the key markets for rare earths remain in East Asia and Southeast and East Asia. And so it also remains that the location of our processing facility in Malaysia is really fit for purpose.

Next, we have Matthew Hope from Ord Minnett.

Just wanted to circle back to the NdPr pricing. Certainly, with your discussion about what was happening in the market, you're referencing China. And again, I think you indicated your Japan contacts are linked to end of month prices in China. Just wondering, is there any mechanism to start to delink from China, because China pricing is obviously quite different from the rest of the world in most products and even NdPr seems to be a bit lower than what's outside China. So is there any mechanism to sort of renegotiate those or change them? Or do they roll off over time?

We can change them, but customers have to have a preparedness to pay. And right now, notwithstanding everything which is written, most customers have an option to source magnets from outside China or magnets from inside China and still 90% of them are sourced from inside China. So we are able -- on occasion, we would say that -- we often talk about this is probably 3 segments of customers; one who understands that they should embrace a risk-based pricing model because of the risk to their business of having to shut down.

And bear in mind, there are at least a couple of [ crass ] lines that shut down in April, May this year as a result of the new licensing regime in China. There's a group of customers who are continuing to assess and recognize they probably need to do things differently. And then there's a fairly substantial group of customers who think that they keep their fingers crossed and their eyes closed and wish very hard that this will all go away and they'll be able to just continue to use cheap materials from China.

We're working through those groups. And of course, our primary focus is on the first group, which is the one to recognize that risk-based pricing, which is fair pricing is something that they need to embrace within their business. And we are progressively sort of working on various different agreements with those customers. But across the market, well, you're just going to have a different price outside China from the one inside China is -- that's not something -- that's something which will rely upon customer performance and potentially policy settings.

The various governments can influence that pretty quickly with -- and we've seen it with some of the sort of settings, for example, U.S. defense industries can't use material sourced from China from the 1st of January 2027 under the DFARS Act. So I mean, governments can do it, but not all customers outside China understand that, if they want ongoing supply that they need to pay a fair price.

Right. Okay. And just in the Dy, Tb, noted what you said about the recoveries being lower and the fact that the circuit is very small. So does that mean that the sort of 9 tonnes of Dy and Tb that we -- that's produced in September quarter, is that kind of normalized? Or is it still got a fair way [indiscernible] to actually ramp up?

It's got some upside to that, Matthew.

Next, we have Rahul Anand from Morgan Stanley.

Look, a lot of my questions have been asked, but I still have one which I wanted to touch upon, which is the Malaysian ionic clay deposits. Could you help us perhaps understand sort of how much you've looked into them? I'm sure you've looked at them a lot given your land plant.

But I want to understand in terms of -- firstly, in terms of the processing side of things, I would believe that the processing costs are lower, but then some ionic clays can be problematic as well in terms of acid use and obviously, carbonation, et cetera. How do these things sit? And then why has Malaysia sort of not been able to do that themselves in the past and kind of has struggled in terms of volumes?

Yes. So we're quite progressed. We have announced one MOU with the client state government. And the deposits which are sitting in Malaysia either it's not quite as easy as it is in Australia where the Crown owns all of the minerals under the ground. Some of them are owned by the state. Some of them are owned privately. Some of them are owned by the Royal families. So we're sort of working through that process and where relevant are executing agreements with the relevant owners.

Now we're in Pahang, so sort of the states sitting on the East Coast of Malaysia are particularly attractive to us, a, because they appear to have the right sort of geology and b, because of their proximity to the plant. In terms of the ability to process and upgrade that material and why haven't the Malaysians done it to date, fair bit of that material has previously gone into China for processing. And so there's not been sort of the same focus on domestic processing. But last year, the Malaysian government recognizing the value of this and introduced a moratorium on the export of unprocessed rare earth materials with the objective of encouraging more development in this sector.

And as I said, very responsive, therefore, to Lynas as sort of a company with skills in this area. But the more general comment about why hasn't it been done is because not very -- many people know about processing rare earths. Lynas is one of the very few firms outside of China that does know how to do it. And so that's really the partnership that we're looking to develop in Malaysia, and we see it as a highly prospective opportunity for future feedstock for particularly the heavy circuit, but those plays also -- not only will they bring us heavies, but they will bring us additional NdPr as well.

Next, we have Regan Burrows from Bell Potter Securities.

A lot of questions have been asked. Just one on, I guess, the broader market dynamics. Obviously, the governments around the world, especially in the Western world are supporting a lot of these projects, and we're seeing a lot of companies state that they will come online within the next couple of years and add supply to the market. I'm just curious on your view, is there enough room for everyone to be feeding into the ex-China market? And how does that sort of infer your thinking around capacity expansions up to that 12,000 tonne per annum rate?

Thanks, Regan. I don't actually spend much time thinking about them. I've got more than enough time to think about our own business. I think that the earliest date that anyone is even sort of suggesting is, I think late '27, and I would be surprised if there's anything come into the market at scale at that time. But the more substantive question is, is there demand outside China? Yes, there is. Can it be served with the industry structured the way that it is today?

Well, actually, it could be serviced via -- in terms of resource by sort of current operators, that is Lynas and MP. However, it is the metal and magnet steps that need to significantly grow to be able to serve the outside China demand. But industry forecasts are for continuing growth, and there is no reason to suppose that it won't continue to grow somewhere in the -- certainly in the high-single or low double-digit numbers on an annualized basis. So there's going to be much demand.

And as I said in my earlier comments, the best thing for everybody is for there should be critical mass in the outside China industry. But it is really important, and I think that governments do understand this, there is still a big gap between where we are today and getting to a stage where there is a large functioning outside China industry. And in the meantime, it's incumbent on them to protect the current functioning supply chain and Lynas is at the center of that. So yes, look, there's demand. It's just a case of making sure that there's capability in all stages of the value chain.

And so if you see, I guess, that -- call it last, but if you see that supply into the market, does that, I guess, shape your thinking around capacity from lab and your business?

I think not particularly, no. We run our own race. We focus on customers that we seek to acquire and anyone who wants to chase us, that's fine, but we run our own race.

Next, we have Scott Ryall from Rimor Equity Research.

Thanks very much for the detail you've offered today. I'm looking, I guess, a bit more at the future. When you did your equity raising at the time of the full year result, which if you can believe it is only 2 months ago, almost to the day, you gave some splits around the uses of the funds, particularly in those growth areas of add resource scale, increase downstream capacity and expand into the metal and magnet supply chain. You gave some indicative splits there.

And I'm just wondering if you have adjusted any thinking given such a lot has happened in this sector over the last 2 months as to where the best incremental returns on capital for Lynas are across those growth areas over the next 5 years as you work towards your 2030 strategy plays, if anything has changed materially? Or as you say, you're still running your own race?

No, nothing has changed materially. I think that what we've said and we said then was the first project that we would bring back to the market would be the heavies, and we have done that. And it is -- and that is because it is absolutely a gap right now in the non-Chinese market. There's been a lot of questions today about -- and I've responded and maybe be a little bit harsh on some customers. But whilst customers are still reliant upon China for their heavies, right? It makes it sort of tricky for them to be shifting their light sort of demand as well.

So that's why the heavy has been absolutely front and center for us in terms of development, and we can have that operating and we have an excellent track record in terms of execution. We can have that operating, we expect in calendar 2027 with some of -- as we said, the product earlier. And that we think will be really important in terms of our overall product offering into the market and giving customers confidence to switch their supply chains. So it remains Top of the Pops. And then because it's not just about the margin on the heavies, but it is about the NdPr that goes with it.

And then we look at that and we say, okay, so we've got capacity there, and you would have noted that we probably got a bit of headroom in that capacity. So that means that the next thing, which is really important for us to nail is, additional complementary feedstock sources, right? We ultimately are a minerals and minerals processing company. So we live or die on the quality of our resources. And so adding more to that is sort of the next priority, very quickly followed by ensuring that there are -- that there is the opportunity for us to sell that into non-China processing facilities, both metal and magnet making.

So the 3 areas remain exactly the same with the priority being, as I've just described, but that is really pretty much what we said 2 months ago. I think you would all be very disappointed notwithstanding everything which is going on sort of geopolitically, if 2 months after a capital raise, I said to you, "Oh no, all the cars are in the air and we're going to change everything." You would be, what's going on. Don't they know what they're doing here. I think it is very easy to get distracted by the daily -- sort of the daily announcements.

But if we try to change course every time a politician somewhere in the world has some sort of a thought bubble, then we would not be the business that we are today. So we understand the market. We understand what our customers need and that ultimately is the thing. You can't run a business on government funding [indiscernible]. You actually need to meet your customers' needs and be a supplier of choice. And we understand what are the policy settings that we want from government to make this a proper functioning market into the future. But -- so Scott, long answer, the short answer is what we said when we asked you to sign a check stands.

I'm smiling and nodding with you.

I see that it's 3 minutes past 12. So I'm not sure, Maggie, how many...

One last question from Matthew is a follow-up. Would you like to take it?

Okay. Yes, sure.

So we have Matthew.

Just a question on the Noveon MOU. Was the intention there just to sell more rare earths to Noveon? Or is it actually to get involved more like JS Link get involved in the entire magnet factory and the profits there from?

So you know what? Chris Jenney, who's our Head of Sales and Market Development, is online, and he is working very closely with Noveon, and I'm going to let him answer that question.

Thanks, Amanda. Matthew, yes, great question. Yes, it's early days. Noveon is a fantastic operator. They're the only existing magnet supplier into the U.S. with very aggressive growth plans. So we're working through them what is the best model, not just for commercial customers, but also defense customers. So we'll keep you updated as we progress.

And Matthew, we will sell more product, and we potentially will engage directly in how to support the aggressive growth plans that Chris has articulated.

Thank you, Amanda. We have no more questions.

Well, once again, thank you all for joining us. The rare earths market continues to be an exciting place to operate. So yes, look forward to catching up with all of you in the near future.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning, and welcome to the Lynas Rare Earths Investor Briefing for the 2025 financial year and the Towards 2030 Strategy. Today's briefing will be presented by Amanda Lacaze, CEO and Managing Director; and joining Amanda today are Gaudenz Sturzenegger, CFO; Pol Le Roux, COO; Chris Jenny, VP, Sales and Market Development; Daniel Havas, VP, Strategy and Investor Relations; and Sarah Leonard, General Counsel and Company Secretary. Please note that this is a restricted call and not for distribution in the United States.

I will now hand over to Amanda. Please go ahead, Amanda.

Thanks, Jen, and good morning everybody. I understand we have a huge audience in attendance this morning. And as always, I thank you for your interest in our company and our operations.

I think many of you will have had a chance to look at both the announcement and the presentation pack that we've put there. But I would like to step through a few of the key slides and then make sure that I leave enough time for the inevitable questions. So just in case you're reading along with me, I'll just let you know which slide I'm on as we go through.

So first of all, moving through to Slide 4, I would like to take this opportunity to acknowledge the traditional owners of the lands on which we live, work and meet, across Australia. As always, for those of us who are in the minerals industry in Australia, our engagement with our local communities and particularly our indigenous communities is really important, and we are proud of the engagement that we have with our local communities in Australia. So we acknowledge and value our Aboriginal and Torres Strait Islander employees, our partners, including our contractors, our communities, and we pay respect to their elders past and present.

Just speaking to Page 5, where we felt that it was timely to take an inventory on company, our capability and market position at the end of FY '25, which marks the end of the construction phase of our Lynas 2025 capital program. Are we still the leader outside China? Well, yes, we are. And first mover advantage is never something to be sneezed at. It is really a value to our business.

Do we spend -- have we spent our investors' funds wisely? Did we say do what we said we would do? Yes, we have been able to fundamentally rebuild our Mt Weld facility, a whole new facility in Kalgoorlie and significant upgrading at Lynas Malaysia. We now have 3 brand build sites, which gives us derisk to growth options as we move into the future.

And do we have all the assets in place to sustain our success in the future and that we are looking particularly through the lens of recent significant market developments? As always, and I know many of you understand this, but I cannot stress the importance of how IP within the organization and the skills and expertise of our people as I think anyone even with a passing interest in the rare earths market would know rare earths projects are complex, difficult and uncertain to either complete or bring to operation. And the fact that the Lynas team has done this in 3 locations over the past 5 years is really significant. And I want to take this opportunity. There are some of them on the call today to actually say thank you for their efforts.

So just moving through today, I will actually cover a little of what we have done, but more on where we're going and how we would like to bring you, our shareholders along with us. So just moving on to Slide 7. And I will just pause on this briefly to say that as we look at our achievements in FY '25, and I really sort of pointed to these, the expansion at Mt Weld. The first -- the Kalgoorlie facility, the significant upgrading of our Lynas Malaysia facility.

First, production of heavy rare earths, Lynas broke the Chinese monopoly on lights in 2013. This year in 2025, we broke the Chinese monopoly on heavies. Importantly, we did the work that allowed us to upgrade our mineral resource and ore reserves statement and marching forward with confidence in greater than a 20-year mine life. And we are engaged very productively with governments and customers, and we remain focused on ensuring that our customers can be confident that when they are buying our products that they are produced sustainably.

A few words on safety. I know this isn't always on the tip of the tongue for -- necessarily for investors, but it is crucially important and a core value of our company and core to the value of our company, ensuring that everyone goes home safe and well every day is our core value. As we run off sort of we are transitioning from construction to operations, and that brings with it its own challenges.

We are proud of our performance on the Mt Weld and lab expansion programs where we have recorded greater than 5 million man-hours with no LTIs. But we are still not happy enough when you look at these stats, yes, our TRIFR has improved, but our loss time injury frequency rate has increased. And the team is very focused on ensuring that all the new tasks as we bring our new kit online are properly assessed, risks are identified and processes and, importantly, behaviors are safe.

On Slide 9, we have a sort of wrap up of the financial results. The revenue uplift has come from increased volume with sort of tempered by the effect of really very low prices for most of the financial year. The NPAT is lower than it was in the prior year, and this is essentially related to the high DA associated with the new assets as they come online.

If we move forward now to Slide 11, you can see one of the things of which we are very proud, which is that by the end of the year, things were certainly looking much brighter, record production in the fourth quarter of FY '25 and the price, absolutely moving in the right direction. I will leave it with you to have a look at the slides from 12 to 17 and to enjoy some of the photos showing where we have, I believe, very wisely invested your money and move to Slide 19.

So on Slide 19, you can see that we are starting to talk about the importance on continuing to support outside China industry development. Our focus remains firmly in this area. It's interesting. I think many know about the support that we received from many of our large shareholders, including Mrs. Rinehart at Hancock, who often exhausts us to maintain our focus on this development of outside China industry because of the importance globally for industry and government.

Within our business, we have recently announced MOUs related to further development here, and I'll talk about that a little as I talk about our Lynas 2030 strategy and engagement with new customers and further refreshed engagement with various governments in key jurisdictions.

On Slide 20, I think everyone who is on this call would know that actions in the U.S. have been particularly exciting over the past couple of months. For us and our engagement with the U.S. government, we are disclosing that we think there is significant uncertainty that the Seadrift plan will proceed as has been conceived previously.

But we are working very closely with the U.S. government on what is the best outcome for both Lynas and the U.S. government. And as we have reminded them customers and governments all around the world, it is excellent, and we are big supporters of continued investment in development of outside China supply chains.

But just remember, there is a functioning outside supply chain today. Lynas is the lynchpin of that outside China supply chain. And it is important that policy development is done in such a way that continues to protect that because, as I said before, development of new plants can be long and uncertain.

So now I want to jump to Page -- Slide 24, as I said, and I'm trying to talk relatively fast to make up for the time that we were off air. But today, we are launching Towards 2030 Strategy. And just to put this in context, the rare earths industry is evolving rapidly. It has always been underpinned by really significant growth potential. And we have always occupied a unique position in this market, always since we started operating.

Over the past decade that I have been involved in this industry, a decade or more, there has certainly been continuing rhetoric recognizing some of the issues associated with the concentration the supply chain in China. We have had now multiple instances where that concentration has been demonstrated to be unhelpful for the market and for customers. And in some instances, that has been as a result of deliberate actions and in others, as we've seen with the pandemic simply that concentration into a single supply chain has not been helpful.

But what we've seen in the past few months is really very active participation from governments around the world, including Chinese government actions in sort of licensing the rare earths exports through to the relatively recent intervention by the U.S. government. We are the global leader outside China. We are uniquely positioned to capture value. And as those who have been shareholders for some time will recall, it has always been our promise that we will be in a position to take advantage of the market as it grows and as -- particularly as pricing becomes more constructive.

And I would say the governments absolutely recognize the importance of our role and the importance of protecting the existing non-China supply chain. So towards 2030, what do we have in our strategy? Well, the first is we're calling it harvest. We have -- our challenge in this 5 years is to make sure we have explicitly included in our strategy. Those actions, which will ensure we deliver value on the invest -- existing investments, the money which has already been expended in developing the assets as we have them today.

Our team knows this is their job and they have the plans and skills to deliver and understand that providing a return on that investment is what I want them to be thinking about when they wake up in the morning and maybe before -- just before they go to bed. Well, maybe when they come to work in the morning and just before they leave.

But at the same time as doing this, we need to take this opportunity where the market is really evolving rapidly to ensure that we drive sustainable growth in a way that underpins future returns. And that is the growth part of the Lynas Towards 2030 Strategy.

It is about adding resource and particularly, I mean, everybody knows the high-quality resource that we have at Mt Weld, but adding resource with a greater assemblage of heavies will certainly be attractive to us, continuing to increase our downstream capability and expanding into the outside China metal and magnet supply chain. And alongside this, we are launching today capital raise. It is an excellent opportunity to ensure that we have the firepower to be able to take full advantage of the market as it develops.

So just moving through to Slide 27 before I go into some of the elements of Lynas towards 2030 in more detail. We would say to you, our shareholders, that we have very successfully pursued our organic growth strategy with the Lynas 2025 initiative. When we did the strategic assessment actually in 2019 about our business, it was crystal clear that the best shareholder return that we could deliver would be from increasing our capacity.

Over the last 5 years, we are really proud to say that we've achieved a historical total shareholder return at a very significant level compared to and significantly ahead of the ASX 200 and ASX 200 Resources indices. We do have a highly attractive pipeline of growth opportunities included in our Towards 2030 Strategy. And we have a disciplined approach to capital management. And I can tell you that across our business, we have many people who treat every dollar as if it's coming out of their very own wallet.

So just looking then at the Towards 2030 Strategy, reduce certainly, on the left-hand side, harvest, I do not want to in any way minimize this. This is what occupies the days of most of the people who work at Lynas, ramp up those assets in line with customer demand and market growth with an ongoing focus on operational efficiencies and flexibility.

Those of you who have been on this call before will know and will have heard Pol and me talk about our costs are our muscle, right? And we need to keep that muscle trained. Even if the price goes up, we need to make sure that we are always looking for ways to improve the way that we do things and therefore, reduce the cost, otherwise known as productivity, I believe.

We continue to focus on enhancing sales and pricing, and that both from strengthening our existing long-term customer relationships but also expanding our non-China customer portfolio. And I think everybody knows that following the market actions that have occurred this year, and that inbound demand continues to accelerate, ensuring optimal capital allocation and providing returns to shareholders and continuing to enhance.

And I would say we have very good engagement with various governments but continuing to work with governments to ensure that industry and Lynas benefit from increased intervention. The funding that we seek to raise today is about supporting the growth side of this ledger. And that is in terms of adding resources and scale, new resource with a higher assemblage of heavy rare earths. You will have all noted that we released the memorandum of understanding with the client and state government. And we will be moving to definitive documentation on that agreement.

And we think that it is really important that we contribute to the development of this activity in Malaysia, increasing downstream capacity with the increasing uncertainty over the completion of the plant in the U.S., we are going to proceed with the construction of a full-scale heavy rare earth separation plant in Malaysia. We are also looking at the best pathway for delivering value-added specialty rare earths materials. And later in the period, we would expect that we will upgrade the Malaysian facility to match the 12,000 tonnes feedstock capacity that we've just established at Mt Weld.

And finally, expanding into the outside China metal and magnet market. The recent improvements in the market led by some of the government intervention has certainly seen projects which are worthwhile projects actually had new life breathed into them. We seek to participate in this part of the market, most likely on a partnership or joint venture basis.

We have execution plans at various stages of development and confidence that each of these projects, you will see the order of magnitude estimates are included in our sources and uses slide. And so if we just move through to that, I mean, everybody has -- I'm sure has had an opportunity to look at that. That's on Page 33.

And bearing in mind that we've only got 15 minutes left in our nominated time, I would finish by saying that it's not just our assertion that we have the assets and skills to capture the benefits of market growth now and in the future. We have the track record to demonstrate that we have the assets and skills to capture the benefits of market growth now and into the future.

And so today is about making sure that people understand that we have a clear road map for continuing to grow this business and a clear articulation of the ways that we are going to take opportunity -- we're going to take advantage of the growth opportunities placed before us.

And so with that, I propose that I will take questions.

[Operator Instructions] And I show our first question comes from the line of Daniel Morgan from Barrenjoey.

My question is you've got offtake discussions with the U.S. government written on Slide 20. On Slide 34, you indicate the $110 a kilo with MP is a strong market signal. You're also talking to the Australian critical minerals strategic reserve. My question is a direct one. Are you in discussions with the U.S. or Australian government for a similar pricing arrangement or backstop or underwritten agreement?

Thanks, Daniel. I'm advised that maybe everyone won't have been able to hear the question. Daniel has asked me to answer with a simple yes or no, he may or may not get his wishes on whether we are in discussions with the U.S. government or the Australian government for a similar agreement to the one that the U.S. government has concluded with MP materials.

We are engaged with various governments including the U.S., Australia and the Japanese government on what it takes for the rare earths industry and the rare earths supply chains to flourish in the years to come. And one of the things that includes is a reliable floor price for NdPr, which has been set by the U.S. government and the deals they've done with MP.

And as we've indicated in the strategy, yes, we are in discussions with the U.S. government, Japan and also Australia with the intent of supporting government intervention, which is designed to improve function -- the market functioning. So not a simple, yes or no, Daniel, but I'm sure that you can understand.

And our next question comes from the line of Dim Ariyasinghe from UBS.

Just a question on the various -- just a question on the different buckets of the $150 million, the $310 million and the $200 million. Can you give us any more granularity on the spend? And maybe just to leave some for everyone else, maybe if you could go into the $200 million on metal and magnets? Any more color in terms of like is that -- are you going to be targeting any specific NdFeB capacity with this? I just don't think that -- we were there, I guess, from a downstream perspective and when...

Okay. Thanks, Dim. I understand the nature of the question. And we do recognize that we have given you sort of really relatively high-level buckets here and that often times, people would sort of like a few more lines in the spreadsheet.

Having said that, as we look at the add resource and scale, we have actions that we need to undertake at Mt Weld. And actually, they don't come through. You have to do drilling, you have to do test work, metallurgical test work, a whole variety of things. If we can convert the carbonatite to -- from a resource to reserve, then that can be a significant value to the business.

So when we look at this and we look at exploration of either the carbonatite or continued exploration of the Mt Weld ore body, we're talking maybe about 1/3 of that allocation to the resource and scale. The rest of it is really about working collaboratively with -- actually, we believe it will be more than one firm in Malaysia to develop in ionic clay deposits in Malaysia.

The MOU as it stands, conceives of an offtake agreement. Our view would be that we will need to be more active than that. And as I said, we're moving towards definitive agreements. The downstream capacity, the heavies investment is Pol and his team have fundamentally done the work there. We're very close to being able to commence work on that project. And then expanding into the metal and magnet supply chain.

Well, we have the MOU that we've signed with JS Link for potential magnet plant in Malaysia, we think it's really important. Malaysia has the potential to be not just the center of excellence for rare earths processing, but actually for the whole of the supply chain. JS Link are well advanced in their assessment of a plant in Malaysia, and we would participate in that primarily on -- we would expect on an equity basis, but also sort of with an understanding of the value and the experience that we have in Malaysia. But also, of course, it makes sense for us in terms of uptake.

So that is one opportunity, but there are other opportunities. There are 7 main projects coming to market in the U.S., many of which actually have some form of government funding, which derisks them. We want to be able to participate either on an operational or supply or an equity basis in this part of the supply chain. We think it is absolutely crucial for our upstream business that the downstream grows. And so therefore, we are prepared to -- we are keen to make a contribution to that.

And I show our next question comes from the line of Mitch Ryan from Jefferies.

We've seen government support for rare earths projects, both domestically and internationally. But should we interpret from today's raise that you don't see the government support coming from Lynas' growth projects? I know you're in discussions for a floor price, but do you not think that you'll also receive government funding?

It's a really interesting question, isn't it? For us, the big price on government intervention, of course, has been the increase in market pricing for rare earths. And as a producer, that money is already flowing into our bank account. In terms of do we want debt from the government, it has never been our preferred pathway for paying for our growth. And that's the reason why we're doing the raise today.

It's not a reflection of government propensity to invest in Lynas. That's clear because we are investable. But as we look at many other projects, they have not put a variety of reasons being investable. -- and so therefore, have had to rely on different arrangements. But our agreements with -- certainly with all 3 -- the really key markets, Japan -- governments, Japan, U.S. and Australia are positive. And where relevant, we would look at a higher level of participation. Bear in mind, Japanese government is one of our key shareholders by Carey. But just right now, our chosen path for funding a number of these growth initiatives is an equity path.

And I show our next question comes from the line of Reg Spencer from Canaccord.

One question is probably a little bit shorter term in nature. With stronger market pricing and I suppose, better market conditions because you guys have built to flag stronger demand, how should we think about capacity utilization or production and sales volumes into FY '26? And I asked that fully known that you do not provide specific volume guidance?

Thank you, Reg. I think that we have previously spoken to the fact that we will ramp up. It's not our desire. We will ramp up in line with market demand. And it is not our desire to produce at maximum rates to then simply be selling that product into the Chinese market for further processing.

We are working very closely with both our magnet making customers in Japan, both of whom have seen a significant uplift in their business since the new licensing regime in China. We still don't see an immediate pathway to the 10,500 tonnes, but we will continue to ramp up through this year, as I said, in line with market demand. But -- if I had a magic wand, Reg, and tomorrow, we were running at 10,500 tonnes, a lot of that volume would go into China.

And our next question comes from the line of Chen Jiang from Bank of America.

Just a question on your Slide 33 with the different brackets of how you're going to spend the capital raise. I'm wondering for the metal and the magnet supply chain you are going to build, are you being able to quantify the capacity you are targeting to 2030? Those numbers are not in your, I guess, FY '26 CapEx guidance. So is that fair to say the CapEx will be reflected from FY '27 to FY '30?

So hello, Chen and thanks for joining and being patient. Yes, certainly, the financial report, the CapEx, which is reflected there is really associated with our business as usual activities. And we included that in the financial report because it shows very clearly the step down from the heavy capital expenditure that we've had over the past 5 years.

So no, this is not included in that framework. In terms of the capacity that we would seek to invest in metal and magnet making, we will come back and bridge the market on that in detail as we execute on some of the opportunities that we see in front of us.

Sure. So as of now, we don't know the capacity -- the downstream capacity from, I guess, $310 million increase in the metal or magnet supply chain from [indiscernible] and then you will come back to update the market.

Yes. Look, as sort of an up framing consideration here, we sell most of the NdPr that we produce, we sell in metal form, not in an oxide form via a tolling agreement with a metal maker. Taking a stronger position in that part of the supply chain, we think will ultimately be beneficial for our business.

So this is about how do we develop our position and how does it protect our upstream business as well as how does it bring in new revenue streams to the business. But we will provide further detail as we move through this process.

Our next question comes from the line of Jonathon Sharp from CLSA.

Amanda and team, a lot in this results, and congratulations on what you've achieved in 2025. Just given the Lynas' growth plans to 12,000 tonnes per annum of NdPr, the ramp-up of ex-China magnet capacity is really critical for that expansion, especially if there's going to be a next China price.

At the moment, there isn't really a western market for the 12,000 tonnes, but we know -- all know it's growing. So I mean, I'd just like to know what you are seeing, what you are hearing. I'm sure it's different from what we're hearing and seeing, both from OEMs and governments just on the Western magnet making expansion plans?

So there are many magnet projects globally. There's probably more magnet projects in the U.S. at present than in the rest of the world combined, I think maybe. But having said that, a number of them are substantive players. And we believe with some more favorable market conditions will come into market.

The -- we are also seeing, and you will have noted this via the MOU that we've signed, a much greater interest in developing capability from Korean firms. And of course, this should not be -- and this should not be surprising given that the magnetic materials are critical to automotive and electronics industries, both of which are key industries for the Koreans.

We're working closely with all of the various magnet projects with the objectives that we will at a minimum agree supply agreements with them for materials. And with some of them, we may take that further to some sort of partnership, joint venture or equity position.

And your next question comes from the line of Paul Young from Goldman Sachs.

I'm just sort of going through all the numbers as everyone else is. And I understand why you're raising -- considering your share prices double, but also the free carry on the U.S. refinery seem to have disappeared. So I understand that. And -- but if I look at what you've announced today and with respect to the growth, I'm not getting any additional NdPr production. We're getting additional heavy rare earths production, we're going downstream into magnets, and I know the pricing backdrop changed, so -- which is great.

But just on the 12,000 tonnes of NdPr and why you're still sticking to that, why actually it's not higher? So I just wanted to delve into that. Is that -- is -- what's limiting the 12,000 tonnes? Is it simply what Mt Weld can do post the expansion? Or is it actually the ability to -- the inability to go beyond 12,000 tonnes in Malaysia?

Actually, it is more that we've sought to size it to the market, Paul. But your point is well made. It may be depending upon the rate at which the market grows and that some of the supply shifts to some of the outside China supply chains. Given that we add the Malaysian resource, so we've got additional MREC coming in as well, we potentially could increase that further.

We do need as part of this, the Malaysian facility now is over 10 years old, and it's operating today at twice what its original nameplate was when it was first built in 2011. There are certain improvements to infrastructure and utilities, which are associated with lifting that further. But they are not ultimately constraints on the ability to do it.

We have simply made the judgment that right now, getting to the 10,500 tonnes is sufficient for us to serve the market and that we will get more bang for our back out of, for example, separating more of the heavies and the leverage that, that gives us in the market, not just for selling the heavies, but also -- but bundling with certain of our other products is going to give us more value than just adding more capacity.

Okay. So just to clarify, you're chasing returns that you're maximizing returns on this investment. That's the message?

Sure, what? I think that's our day job.

Our next question comes from the line of Al Harvey from JPMorgan.

And just on the downstream capacity and the heavies, you've got $310 million going out there, but it looks like the focus is on samarium and yttrium extract rather than a typical higher-value dysprosium and terbium. So I just wanted to get a sense of where you see spot prices for samarium and yttrium and how valuable you think that could be versus dysprosium and terbium and perhaps just whether or not the downstream expansion bucket does include any additional DyTb capacity, given its value to the business?

Thanks, Al. Good question. Unintended implication as we put in the larger plant. Yes, we will increase overall production, and we will increase -- which means including to those products that we're already separating and we will separate more. And depending upon what the additional feedstock that we develop and identify that number of different products may expand.

We don't sell our heavies with reference to a market index. We won't sell samarium or yttrium with reference to a market index because if we -- because it simply doesn't reflect the value of those products to the customers that we seek to serve. So we know that there is significant demand, both in the U.S. and Japan for samarium, which is why we are focused on that as the first additional product in our product set, but we also understand that there is significantly more demand for Dy and Tb than we can serve from our current operations, and we will be looking to find a way to lift up that volume as we go forward.

And I get what you mean, it's just challenging, I suppose, when we bucket all these things together as heavy. It's a bit like bucketing lights when there's such a difference between [indiscernible].

Exactly, exactly. And if we wanted to sell at the benchmark price, we might be talking about anywhere from $500 for some products to $1 for other products. We feel that we're in a stronger position to be able to leverage this unique value that we have in heavies, and we're going to make sure that we do that.

And I show our next question comes from the line of Regan Burrows from Bell Potter.

Just -- a lot of them have already been answered. But just on the Seadrift and how we sort of think about that, if it doesn't come on line, what your sort of time frame is for upgrading capacity in that downstream separation phase at LAMP? And are there any limits on, I guess, how far you can expand capacity at LAMP?

Yes. So -- thanks, good question. We will have a broader range of separated heavy rare earths coming out of our facility in Malaysia faster than we would a greenfield site in the U.S. And frankly, we are very comfortable that, that is a better pathway for us and indeed for the customers of these products because it ensures that we have material in a shorter time frame than building a greenfield plant in the U.S.

I mean I think everybody on this call understands that any time you're doing a brownfield development, it's going to happen faster, it's going to be more cost effective. So we see this as a positive and I'd just point you to my comments about the U.S. government understands that there is a functioning rare earth supply chain, and it is important to protect that even as they support development of new facilities.

And our last question comes from the line of Mitch Ryan from Jefferies.

Just given the historic political headwinds you faced in Malaysia. I'm interested in the logic in potentially building a magnet facility there and then continuing to invest. Can you help me understand the rationale for that?

Sure. I think that -- yes, I've been watching the Lion King recently with my sudden new granddaughter and sort of I'm reminded of Timon and Pumbaa, put the past behind you. And there's a little bit of that as we think about our position in Malaysia. And there was an article actually just in the last few days in Malaysiakini, which exhausted the Malaysian government to ensure the Malaysian population was provided with accurate information rather than the mysteries that had come out about Lynas over the years.

And that was provided by a politician who did not use to be a supporter of Lynas. And so I would point you to the new legislation was taken -- was tabled in Parliament last week for its first reading, and that would give the government room to be able to -- under the current Atomic Energy Licensing Act, the license can only be granted [indiscernible].

It gives room actually for some more flexibility around that with the focus really being on do we meet regulations and the intent to depoliticize the Lynas issue. We would say we have a very good relationship with the Malaysian government, and we think that continuing to increase development of the whole of the rare earths ecosystem will serve us in good stead.

Okay. And I think that's the end of the questions. And once again, I thank you all for your patience in winding through those technical issues and look forward to continuing to deliver outsized returns for you as our shareholders.