Lynas Rare Earths Limited

Good morning, and welcome to the Lynas Corporation briefing for the September quarter of FY '21. Today's briefing will be presented by Amanda Lacaze, CEO and Managing Director; and joining Amanda on the line are Gaudenz Sturzenegger, CFO; and Andrew Arnold, General Counsel and Company Secretary.

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

Thanks, Jen. Well, good morning, everybody.

Delighted that you've been able to join us this morning as we talk about our first quarter results. And of course, I'm very pleased with the results that we've been able to release today.

We've set ourselves a number of targets at the beginning of this quarter, I mean, of course, always to ensure that we meet our customer needs. But operationally, we really wanted to ensure that our restart after any shutdown was maintained safely and that we also achieved stable operations because we know that that's good, both the throughput and also the cost.

We wanted to ensure that we were matching production to customer needs and not creating any unnecessary supply side pressure in the market. And we set ourselves to target of ensuring that as we started our path with the prolonged shutdown, we would capture cost efficiencies and perform at our best cost levels and that we've demonstrated during the period of time we've been operating our various facilities.

We set ourselves the target of meeting actually a profile in terms of cash generation as we progress with our growth plans. We wanted to make significant progress on our Lynas 2025 initiatives, and we wanted to continue to advocate for industry development in a positive and affirmative way.

And I'm pretty pleased because, really, as I look at my checklist, I'm able to put ticks against just about all of those things. So in terms of operations, certainly, in time of COVID, there are certain imperatives in the way that we operate.

Of course, the health and hygiene protocols are nonnegotiable. And even as we, at present, see a flare-up of cases in Malaysia, fortunately, none of them in -- no significant numbers in the state of Pahang where we operate.

But we are ever alert and ensuring that our people understand our expectation for them that we'll have appropriate testing regimes. And of course, we have the appropriate protocols within the organization to ensure that we are creating a safe environment.

We've mentioned, I think, at the half year that we put a new structure in place. It's certainly working very well with Kam Leung heading up our upstream operations with full accountability for our West Australian operations, both Mount Weld and, of course, the Kalgoorlie Project; and Pol Le Roux taking accountability for our downstream operations, including a quantum facility and other customer-facing activities.

This is working well, although, I think both of them feel that there's certainly plenty of work on their plate. We have been able to manage some of the issues, which come from the prolonged shutdown, any chemical plant always will sort of let you know that it likes to be run continuously.

And so we're on a prolonged and sudden shutdown. But the team in Kuantan, in particular, I think, has used their time very wisely and ensured that we've implemented a proper process to really understand what, if any, effects there have been from being shut down.

It's a delight to have returned to positive operating cash position, and it is in line with our internal profile that we used as we sized the equity raise for the Lynas 2025 foundation project. Of course, the big thing we did in the quarter with respect to Lynas 2025 is the capital raising of $425 million.

That secures funding for the key foundation projects associated with Lynas 2025. And the Kalgoorlie project team has made really excellent progress with the sublease going for the Kalgoorlie-Boulder and the general purpose fleet for the site.

We've had a decision from the Department of Agriculture, Water and Environment. That's the Commonwealth department that is not a controlled action under the EPBC Act, and that means the project will be regulated by the Australian State Regulators.

And of course, as people know, we signed the U.S. government contract.

For the Phase 1 development of the proposed Heavy Rare Earth plant. The other thing really is about continuing to advocate for industry development.

I think that barely a day goes by without some commentary about geopolitical matters, particularly as they relate to Rare Earth. I think that many of us have spoken before about the effect of COVID-19 in reminding any end users that singular supply chains can be risky.

And then, of course, we continue to see from various different government announcements and statements. We're really delighted to see critical minerals and Rare Earths being part of the Australian government's advanced manufacturing policy.

And we are also pleased to see and we feel we have a part to play in continuing to engage with Australian, U.S., Japanese, European government on the importance, not only of having the resource and initial processing of Rare Earths that actually in the development of downstream industries, which will give end users confidence to open outside and develop outside China's supply chain. So I was just talking to one of my colleagues and saying, to some extent, it's a business-as-usual quarter and intendedly I like to be back to a business-as-usual-type profile, and we look forward to continuing to build on a solid foundation of our first quarter this year.

So look, think the report, and I'm sure everybody on the call has read it, is pretty self-explanatory. And so I'm quite happy to take questions from anybody on the call now.

Okay. Thanks very much.

And thank you all for joining, and I look forward to reading all of your various reports, which I assume will be glowing. Anyway, no doubt, we'll talk again soon.

Thank you very much for your time.