Lynas Rare Earths Limited

Good morning, and welcome to the Lynas Rare Earths investor briefing for the March 2021 quarter. Today's briefing will be presented by CEO and Managing Director, Amanda Lacaze.

And joining Amanda for the briefing are CFO, Gaudenz Sturzenegger; General Counsel and Company Secretary, Sarah Leonard; and VP, Strategy and Investor Relations, Daniel Havas. I'll now hand over to Amanda.

Please go ahead, Amanda.

Thanks, Jen. Good morning, everybody.

Thank you to all those who have joined the call today. It seems just like yesterday that I was talking to you with the half year results, the sort of quarterly reports do, do bring us altogether on a -- well, a regular and frequent basis every quarter.

We're delighted, of course, to present another excellent quarter. Our production was in line with our planning.

As I've identified in the quarterly report, we've opted to keep production at 75% of Lynas NEXT rate. We continue to have challenges, both with inbound and outbound logistics.

And until we're able to build a significant store of concentrate ahead of the plant in Malaysia, it's not our intention to dial up production significantly. We keep putting concentrate on the water, but it keeps having sort of variable delivery dates.

I'm pleased that our costs are in line with plan and remain very much under control as we're operating at the 75% level. Of course, the market remains very buoyant, and we're delighted with that.

NdPr pricing is strong. Pricing for heavies is also very strong.

And demand also is very strong, with many of our customers not only back to pre-COVID levels, but some of them, in fact, looking to further growth in the short term. Like many other firms, we were frustrated that our ship got stuck in the Suez Canal.

And so as we look at our results here, we were well and truly on track for a absolute record quarter, but there was a couple of hundred tonnes, frankly, that didn't make it before the end of March as a result of delays in shipping, But that material has left our plant in early April. I guess where I'd like to -- I mean some of the business as usual is pretty clear from our -- from the report and just sort of a moment thinking about in this strong market, how do we make sure that we meet our objective of growing with the market.

So as demand grows, how can we ensure that our capacity grows? And of course, that's associated with some of our key projects.

And keen readers will note that, certainly, the expectation from Chinese producers is that the market will continue to strengthen with some quite significant announcements regarding capacity uplift. So our key projects, which are going to allow us to grow with the market, include, of course, the Kalgoorlie project and the work on the development of our U.S.

rare earths processing facility. So Kalgoorlie first.

Kalgoorlie is -- work is continuing at pace. The project team is growing as is -- would be expected at this stage of the project.

And we now have most of the key positions with respect to managing that project within Lynas are now filled. And we are making really good progress on letting the tendering and letting contracts for a variety of different pieces -- elements, equipment, engineering and other works.

We've included some photos in here so you can see how far progressed the fabrication of the kiln is, which is, of course, very exciting. But as well as that, as part of the approval process, the EPA has given us limited -- approval for limited preliminary works on site.

And it's important to note that these are works which will ensure that when we start receiving the equipment, providing we have the final approval, we will be able to move quickly. But they are not works which presuppose a ministerial decision.

So the relevant act provides provision for mine or preliminary works that are associated with an implementation of the proposal but are unlikely to have a significant environmental impact, and that's exactly what we're doing at present. But it is very exciting to actually have people on site doing those works.

We've started to see a slight ramp-up of capital associated with the Kalgoorlie project with a further step-up expected in this quarter ahead of, as we've indicated previously, the large capital spend, which we expect will be primarily in the FY '22 -- in financial year '22. Of course, the other exciting news during the quarter, which we did cover when we did the annual results, is the agreement from the DOD for a contract to partly fund the development of a Light Rare Earths facility, which we proposed to have operating alongside our already planned Heavy Rare Earths and specialty facilities.

This effectively means that our facility in the U.S. is really a very substantial facility with light separation, heavy separation and specialties all on the one site.

We think it's very exciting and really provides the fundamental sort of foundation for the development -- the further development of the rare earths ecosystem in the U.S. So we really think about it as a platform for development of further activities in line with government policy.

And of course, we've all seen that governments continue to be very focused on the rare earth sector. And of course, as we think about this, it's for reasons which are strategic.

Of course, geopolitics are an important part of that and ensuring that there are resilient supply chains in all key supply chain areas, but particularly for critical materials, is at the forefront of government thinking. The second area is, of course, that these are materials which underpin new technologies and modern manufacturing capability.

And so governments all around the world, they're keen to ensure that they are part of the significant development that we expect to see over the next couple of decades as we adopt new technologies, which are going to be, frankly, better for our planet but also better for consumers. And of course, the third reason why governments remain very focused on this sector is that it is a critical part of economic recovery.

And as we see the continuing demand in key sectors for our materials, we see this as being a very positive thing for our industry and also for all of the industries which we feed. So as I said, I mean I don't have a lot more to say other than the quarterly report.

It speaks for itself. Again, a very good quarter.

We continue to see very positive and buoyant market conditions and are looking forward to finishing the year in very good shape. So with those as introductory comments, I'm very happy to take any questions that people might have.

Terrific. Thank you very much, and thanks all for joining today.

As I said, I think it's -- we've delivered an excellent quarter. We certainly are managing to deliver exactly what, I think, many of our shareholders who were with us -- have been with us for the past sort of 4 or 5 years.

I remember saying in about 2017 that we were leveraged -- that we were positioned to take full advantage of any upside in price. I think that we're seeing the benefits of that today and look forward to speaking with you again in another 3 months when we look at our full year outcomes.

Thanks all. Bye.