Lynas Rare Earths Limited

Good morning, and welcome to the Lynas Rare Earths investor briefing for the June 2025 quarter. Today's briefing will be presented by Amanda Lacaze, CEO and Managing Director; and joining Amanda today is Gaudenz Sturzenegger, Chief Financial Officer; Sarah Leonard, General Counsel and Company Secretary; Daniel Havas, VP, Strategy and Investor Relations; and Chris Jenney, VP, Sales and Market Development.

I'll now hand over to Amanda to commence the briefing.

Good morning, everybody. I'm told that we've already got lots of people in the queue for questions.

So I will keep my opening remarks relatively short because I did get some feedback from somebody that they felt that we never had quite enough time to cover all the questions. Having said that, having thought a bit about some of the questions you might ask, for those of you who are aficionados of insiders on Sunday morning on the ABC, you might find that I have borrowed on some of the language that the politicians often used there, which is, well, I would not be using insiders on Sunday morning to announce new policy.

But we'll see as we go in terms of the questions. We are very pleased to deliver this report for the final quarter of FY '25 because it does mark the delivery of a number of what we call them first.

But certainly, we've had a significant development and investment program over the last 5 years. And so as we look at our business, we expect really every month to be a record month and every month to be better than the one before.

So Pol's famous quote, better than yesterday and much worse than tomorrow. And we continue to be very focused on how we deliver growth in what is an excellent market in which to be participating and which we expect will continue to be a significant growth market.

Of course, the first and most important, we exceeded 2,000 tonnes of production for the first time in this quarter. And as I said, my conversation with our production team is that -- the expectation is that each month will be a record month, although I qualify that again with the fact that we're not just going to produce for the sake of producing.

But we did increase the run rate progressively as the month went on. I would like to particularly sort of reflect on the excellent performance at Mt Weld in terms of current production, production over FY '25, built sufficient inventory that we were able to have a [ shut ] in this month, which derisks the transition from the old plant to the new plant.

And I think as -- a general manager there said, the old plant can now be retired. I forget the word he used, but basically with the claim.

I mean it has certainly -- for really -- a very small facility served us very well over the past decade. Certainly very big news for the quarter was the first production of dysprosium oxide and terbium oxide at our new production line in Malaysia.

They both came out in May and June, respectively, marking the first commercial production of separated Heavy Rare Earths for Lynas, and the first commercial production outside China in many, many years. At Mt Weld, as we finish the Mt Weld expansion project and as noted in the report, all of the major construction is now complete with nonprocess -- some nonprocess construction ongoing.

The project has been an excellent project for us, and it is, certainly to date, working as designed, which is, of course, the most important thing, but also on time and on budget. The installation of the first wind turbine at Mt Weld and the completion of the solar farm are important markers as we transition from diesel-based power generation to largely renewable energy sources at Mt Weld, consistent with our position in the market as a sustainable producer of rare earths.

And then in Malaysia, we have 2 important steps, which is the signing of an MOU with the Kelantan Menteri Besar Inc. for the development of upstream rare earth deposits in Malaysia and the signing of an MOU with JS Link from Korea for the development of downstream assets in the form of a new magnet manufacturing facility.

So we are really pretty excited about coming to the end of really the big capital build portion of our activity and the fact that we now can start to bank many of the benefits from those investments. I'm sure that everybody will be keen to hear our view on some of the industry-shaping initiatives that have been announced, particularly out of the U.S.

I mean what a roller coaster we've had over the last 4 or 5 months, and I'm sure that's the same for observers of any sector at present with the imposition of tariffs, with the imposition of export controls, with the release of some of those export controls, and then leading through to some of the announcements out of the U.S. last week with respect to industry building.

On balance, our view is that developing a vibrant outside China industry will be good for everyone, for all participants, but it will be best for us because we are today the only scale producer of light rare earth and heavy rare earth, and we are an efficient producer. And I think as we've seen at times over the past decade, in particular, having our assets in place and operational when the cycle turns, and we are looking at some very positive moves in terms of price right now, means that we can take full advantage of that upswing.

Of course, for us, heavy rare earth production is key to our competitive advantage. It's important because we could certainly, on current production rates, be sold out several times over, it allows us to participate in segments where sensitivity to pricing is much lower than in some of the magnet supply chains, and it gives us an opportunity to bundle material with our NdPr and be able to meet the needs of some of our most strategic customers so that -- I sometimes joke internally, so that we can be the wife rather than the mistress.

So we can actually provide the full suite of materials to these strategic customers. Our task now is looking at the next stage of production of heavies.

And as everyone knows, we have the project in the U.S. on which work continues.

But as well as that, we are looking at additional opportunities to increase output from our Malaysian facility. So all in all, we see this as a pleasing end to the FY -- the 2025 financial year and are looking forward to 2026 with a great deal of enthusiasm.

And so with that, I think that it's a good idea to move straight on to take questions.

First question is -- it's all going to be pricing. So firstly, a direct question, did you sell any Dy and Tb in the quarter?

And then I note your comments in the release where you say you're selling some product on -- without respective China market indices. Is that just with respect to Dy and Tb?

Or is there some NdPr, which you're bundling or otherwise, which is not linked to China prices?

Thanks, Daniel. So yes, we had sold some Dy and Tb.

We are being very -- in some of the segments that we will now be able to participate in, there's a longer trial period. And so we have samples at a number of customers, but we're pretty confident about those converting as well.

We have been very cautious in the quantities that we have sold and the customers to whom we have sold those because we do have limited material at this stage, but yes, we have sold it. And yes, we have sold -- we are significantly advanced in some cases and have sold to others bundled offerings, which actually see us with a different approach to pricing than -- has been standard in the industry for some time.

I think the issue of whether sort of we end up with 2 levels of pricing, I actually don't believe that there's likely to be 2 different pricing formats. I think that the value comes, and we're seeing a little bit of this at present in the market price moving up to a level which is at a more sustaining level for industry development.

For my one question, I just wanted to continue on from Daniel into the pricing. So if you look at your baseload supply that's going into the JARE contract, I just wanted to go back to that perhaps and get a quick refresher, if I can.

Obviously, my understanding is that the supply rights are until 2038 for about 7,200 tonnes per year. There is a clause in the -- in where you detailed that contract saying that Lynas would not be disadvantaged.

So I guess my question is, if you do start getting better pricing for marginal volumes outside those 7,200 tonnes for your NdPr, which are at a higher price, would the JARE contract then match that price? Or are you still embedded with the Asian Metals index price for that contract?

Thanks. The contract is silent on pricing mechanism.

So we are not embedded to any particular format for the pricing there. We do have contracts, which are structured with reference to industry benchmarks, but that's not compelled as part of the contract.

And you are right, the significant point there is that we will make the product available for the Japanese market so long as it is at no commercial disadvantage to Lynas, which effectively means, yes, if we can sell at a higher price, then we have -- the contract allows us to do that. I say all of that with -- at the same time, importantly, to put this in context, today, I know there are many, many projects.

But today, rare earth permanent magnets are produced in Japan, in Japanese factories, in Vietnam and in China largely with maybe -- with a very small volume being produced either in Europe or in the U.S. So this remains sort of an incredibly important market for Lynas, and the relationship with JARE and with the Japanese government by JOGMEC is a really important relationship for Lynas.

So the way that we manage that relationship is important, but we certainly do have room to bank commercial benefit within the construct of the terms of that relationship.

I hope it's been an incredible last 2, 3 weeks. So I'll continue on the questioning around pricing and offtake.

Probably the first one is to continue around that contract with the Japanese and talking through the production above 7,200 tonnes. So specifically interested in how you're looking at around offtake -- timing of offtake for material above 7,200 tonnes, and how many offtakes you're looking to sign or diversify, just high-level thoughts.

And then just your thoughts around NdPr with the $110 a kilo price. Do you think that this actually sets the benchmark on a fixed price?

Or could we actually see even higher prices?

So with respect to -- just back to the -- making product available up to 7,200 tonnes, that is not -- I mean, we don't have a contract with the Japanese government to buy product, right? This is that we will make that product available into the Japanese market.

We are the leading supplier of fresh NdPr into the Japanese market, and we aim to remain there. And I think that it is important to note that the Japanese magnet makers over the past quarter have significantly increased their production off the back of increased demand after all of the concerns about sort of reduction in exports from China.

And we continue to see this as a key part of our prosperity is to work -- to be working alongside those Japanese magnet makers and ensuring that we continue to grow. However, having said that, Japanese demand is still below the 7,200 tonnes.

So our portfolio of customers includes the magnet makers in Japan. It includes working alongside those magnet makers as they quote on specific pieces of business, as we know, particularly in the automotive sector.

The automotive OEM will be setting up a platform, which will become their platform for 5 years, and you want to be in there at the beginning. And so we are working alongside those magnet makers to grow into other markets other than just the Japanese market as well.

So I think once again, this is sort of core of our business and incredibly important for us that we maintain a strong positive relationship because this is actually where the market is today. And we are producing -- unlike everybody else with their spreadsheets, we are producing and we do have customers, and we will continue to supply them.

However, having said that, as we've indicated previously, we have direct relationships with magnet buyers in addition to our relationships with magnet makers. And particularly with the addition of the Dy/Tb, we can go into new markets, for example, micro capacitor markets, which are very positive for us.

And we see an entry into those markets, not just with our heavies, but also with higher value, particularly cerium materials, which are relevant for those particular sectors. With respect to the $110 sort of price protection agreement that MP have agreed with the U.S.

and it's likely effect in the market. I think it's certainly not clear right now exactly how that will convert into market-based pricing.

I think that it has sent a clear message about the determination of the U.S. government to rebuild this sector outside China.

And that certainly has a couple of different benefits. One is it gives end users confidence to formulate material.

I know that over many years, there have been end users who've said, well, gee, we need to invest in alternate technologies because of the supply chain risks associated with rare earths only coming from China. So I think we see a more vibrant and a more buoyant market, generally speaking.

And I think that, that will underpin increasing -- increases in the price. Can go above $110?

Yes. And I think if you read the detail of the deal, that there would be an expectation from the U.S.

government that, that is likely to happen because they've negotiated upside -- share of any upside over the $110 as part of their agreement.

Just not sure how much you can say, but if you can update us on your discussion with the U.S. DoD because you have been -- Lynas has been the partner with U.S.

DoD over the last 3 or 4 years and you actually signed a contract backdated 3 or 4 years versus MP. So I'm wondering your peer MP has secured a great deal with U.S.

DoD. Does that mean DoD now prefers MP over Lynas?

Do you see yourselves in a relatively disadvantaged position versus MP from U.S. DoD and U.S.

regulatory tailwind perspective? And how do you see yourself positioning into the U.S.

rare supply chain development?

Yes. So it's an interesting question.

And of course, you wouldn't be surprised that my first response is I cannot tell you how the U.S. government perceives anything.

I'm sure that most people wouldn't wade into that territory. But suffice to say, we have a contract.

It is an excellent agreement. It is grant funding for that facility, and we have the proven track record to actually deliver what we've committed.

And so we see our relationship with the U.S. government is still a very positive one.

In fact, under this administration, the determination to really fundamentally shift the market dynamics is very strong. And I don't think that any government or customer in the world is keen to trade out one monopoly for a second.

And so therefore, I think that we provide an additional source of material and therefore, sort of continue in very constructive -- in a very constructive relationship with the DoD.

I'm not sure if Pol's on the line or whether he's able to -- or whether you're able to help me out on the following question, but I'm going to continue along the line of pricing. How do you guys think China prices respond to that new, let's call it, a benchmark, whether it is or not is a different question.

I note recent reports that China has actually notified some of the local producers of new production quotas, but they were not publicly disclosed to the market. Just trying to get a feel for what this means for overall global pricing for these products.

Well, Chris is on the line. Now that's after our sales activities.

But having said that, I can probably deal with this in the first instance. So yes, our understanding, and we have some intelligence on what the quotas look like, but none of it is being formalized.

So I don't propose to sort of articulate what those numbers are, except to say that we think that it is -- the sorts of quotas which have been applied are consistent with the sort of language that we were seeing before the tariff blowup and from the China government with respect to bringing in an understanding of the imported material and including that within the quotas. And so what we see inside China today as the export licenses are being issued is we do see growing demand inside China at present.

And I think that we can see that -- I mean, the price of NdPrs gone -- the Asian Metal price of NdPr has gone up about $12 or $13 a kilo in the past month or so. So we see that as being very positive.

Once again, I can't possibly imagine what goes on inside the heads of the China central government any more than I can what goes on in the heads inside the U.S. government.

But it does appear to me that there's a chance, the fact that the U.S. has been so definitive and its intention to do this that probably many involved in the industry in China would see that there's little value to cutting the utter the price as a strategy.

It doesn't mean it won't happen, but it doesn't appear to have the same potential effect that it might have had previously. So therefore, we then move on to what is the key lever that the Chinese still have.

And that is that they are still, notwithstanding that we've commenced supply separated heavies. It is still the primary source of separated heavy rare earth.

And so I refer you back to my earlier comments about our ability to separate heavies and the fact that we have heavies in our Mt Weld orebody is a key part of our competitive advantage in this market.

In the meantime, I'm hoping that maybe you could share some color -- you pointed out, obviously, in the press release and commentary, you guys were selling at record levels of NdPr in the quarter. How do you foresee the trajectory of that in the ensuing quarters?

Was some of that content that had been produced out of stockpile? And then as a follow-up to that, obviously, with the heavies content now being separated as well and sold, there was a tick up in operating costs.

So how do you think about sort of a levelized operating cost now in the ensuing quarters using this higher capacity levels here?

So good questions. So the first thing, no, I mean, we didn't significantly draw down inventory.

We run and always have done pretty minimal levels of inventory for -- particularly for NdPr and Nd and Pr. Remember, and maybe sometimes I forget to remind everybody that the fact that we can economically separate Nd and Pr also gives us access to markets that you can't get to with just an NdPr material.

So we might have ended the quarter with a bit less inventory than we started the quarter, but it's not particularly remarkable. Basically, we continue to sell pretty much everything that we produce.

And we will continue to balance that as we go forward. But we do hold a little bit more inventory than in the days when we finished the quarter with maybe 20 tonnes in the warehouse.

So with respect to the costs, I think it's always tricky when you're looking at cash cost, which is what we had in this quarter because sometimes -- I mean, for example, at the end of last quarter, I think the final day of the quarter was a public holiday. So some of those sort of spilled over in cash terms into this quarter.

And of course, in the second half of the year, we have the Kalgoorlie costs sitting on the P&L rather than being booked to the capital account. Notwithstanding all of that, even with what has been a pretty soft year in terms of pricing, we have continued to be able to generate positive operating cash.

But as we look at our cost assemblage as we move forward, there are pluses and minuses as we bring the Mt Weld expansion online. We won't be running from day 1 at its full capacity.

So how do we find a way to actually operate that asset in a way that captures as many cost benefits as we can. Kalgoorlie, our focus has been on getting production ramped up and improving quality, reducing the level of non-rare earth impurities in that MREC because that fundamentally changes the way things operate in Malaysia.

And in Malaysia, we are looking at continuing to optimize costs, and it's looking pretty good. So sort of a really key focus on as we get to sort of stable production, particularly in Kalgoorlie, how do we now start to drive some cost out in that area and in things like the new gas pipeline and those sorts of things will certainly improve our performance there.

So we would expect that we will retain our lowest quartile position in terms of cost of production. And it remains an area that even if the price goes up, we don't go crazy.

We understand that this is our muscle, and we need to remain focused on it.

Just a question on your downstream strategy. So it seems you want to -- the strategy is to go with an experienced partner, which seems wise.

But can you just take us through the strategy of doing it with a partner versus going alone. Many potential rare earth producers or even rare earth producers discuss or want to produce magnets on their own.

What are your views on execution risk? And why did you decide to do -- or why did you decide that you want to sort of go with a partner?

What are the advantages?

Yes. So if Pol was on the call, he would tell you that the first time he saw our presentation saying that a company was going to provide mine to magnet fully integrated capability was -- I think he said in about 1999, and that is yet to actually be delivered.

So we have a healthy respect and process of assessing what are we good at and what do we need to get better at and what do we need to learn. And so we are very, very good at understanding rare earth geology, mineralogy, processing.

So we're a good miner and we're a good minerals processor. We're also very good at running big complex chemical plants because that's essentially what the rare earth refineries are.

There's as complex a chemical plant that you could ever find. And so metal making and magnet making are a different skill.

Now could we learn it? Yes, I'm pretty confident that we could.

I mean, 10 years ago, we didn't know how to separate rare earths. We're really very good at that now.

So could we learn it? Yes.

Will that take time? Yes.

Working with a partner who actually has those skills where we can bring the combined value to the activity, we think, gets us there faster and with less risk. And once again, I'll point to the fact that notwithstanding many, many PowerPoint presentations for mine to magnet, we've not actually seen that executed.

And we're pretty -- we put execution at a high premium in our company. So we see that the path that we've chosen to do this in partnership is likely to get us to market sooner with a better product.

Just a quick one on the project, the Kalgoorlie facility. You mentioned in the report that more work will be put into this project for the ramp-up.

Just wondering if you have a new timeline on when you can ramp up to the 10,500 tonnes. And also any color on the CapEx outlook?

Do you need to think more cash into this project to -- regarding the modification work?

There is no significant additional capital needs to go into Kalgoorlie, you would be pleased to know, having made such a significant investment there. What we're really talking about here, and we saw this also as we developed the LAMP over the past decade, is that this is not just a simple flick of the switch and everything will be fine.

We are dealing with a complex process. And as I indicated, the primary focus is really about dealing with nonrare earth impurities and the fact that we had an initial flow sheet, which was developed on the assumption that we would not have cracking in Malaysia.

And now we do. It actually just has given us a few more challenges around the way that we introduce the 2 materials into the facility in Malaysia.

We are well progressed on that. We don't need Kalgoorlie to be operating at nameplate to be able to get to the 10,500 tonnes.

The 10,500 tonnes -- but we do need it to be producing reliably at sort of more than we would say that we have achieved, we can produce at the sort of rates but not the quality that we want for execution in Malaysia. But I mean these are issues at the margin.

Our focus on the 10,500 tonnes a year, it's more to do with how do we assess our ability to put this into the market in a way that maximizes our prices and returns than specifically on sort of operating parameters.

Congratulations on a good finish to the year. It looks like you probably got a premium on your NdPr product in the realm of 15% to 20% over the quarter.

Just curious, how sensitive are your Japanese customers to that increased pricing regime? Like if we compare it to the DoD MP arrangement, the DoD is the backstop there, so the end customer doesn't effectively pay any more for the material, which makes me think that they are sensitive on pricing.

Just curious how -- whether that sort of shift your view and whether your Japanese customers have a similar view.

I'm not sure that, that interpretation is necessarily correct. I mean, yes, there is a backstop to the $110.

But if you read the documentation, there's an expectation that product will be sold at commercial rates. So I would expect that -- we would hope that we continue to see the strengthening of the market.

And in that case, then the Japanese magnet makers will be at no competitive disadvantage.

Congrats on the results. Maybe if you could just help us on JS Link, and apologies for my ignorance.

I agree it's probably kind of going downstream with the partner that has experience in this sector. But can you maybe enlighten us as to what that is?

And then be so bold to ask, like are they willing to pay a higher price for your rare earths versus the benchmark?

So I will invite Chris to make some comments on JS Link in a moment. I think that I had indicated on some other calls that we've had that we see significant potential value from the Koreans.

There's been investment across the Korean sector in developing rare earth. And this doesn't surprise you because why do you have to have rare earths?

You have to have rare earths for automotive and electronics. And what are key growth industries in Korea?

Automotive and electronics. So we are engaged.

There are 2 or 3 different Korean either currently producing magnets, although in relatively smaller quantities than the Japanese and the Chinese. But we see this as a key growth sector in the market.

Partnering effectively with producers and customers in Korea is certainly part of our sort of view of the world moving forward. With respect to Malaysia, of course, for the Malaysian government, Lynas has always been a part of -- it becomes a foundation for more industrial growth around it, which is why we're focusing on both what are opportunities for development of upstream and also what are opportunities for the development of downstream.

So we are delighted with the fact that we've been able to sign this with JS Link, who have indicated a preparedness to invest in Malaysia, right? It doesn't mean that we won't engage with Korean magnet makers who are either investing in Korea or indeed in Vietnam.

But Chris, maybe I can hand to you if you wanted to say anything more about JS Link.

Thanks, Amanda. Yes.

So JS Link, they're one of the newer magnet-making operations out of Korea. And they're publicly listed.

They're building a facility in Korea, but also looking at overseas expansion. And they've got some great technology and a very strong management team.

And really, I think it's yes, just another step forward in creating the new outside China supply chain. So very excited about the news and look forward to working very closely with them.

Yes. I mean, like the way I am reading it is that, with this announcement, you've got more clarity on ex-China and the FeB capacity, so another 3,000 tonnes, which is maybe 1,500 tonnes of NdPr, give or take.

The biggest pushback, I think, from the stock was that you didn't have ex-China capacity to deliver into, that's changing quickly, I think so.

That is right, Dim. The more that the downstream grows outside of China, the better it is for us.

And so we are very focused on developing those relationships and working alongside those that we see are going to be investing and developing their business in this area.

Just interested in your comments and your advancements in Malaysia, just given those 2 recently signed MOUs. I suppose just trying to get an understanding of the upstream versus downstream.

I suppose given you've got a lot of latent capacity upstream at least across existing infrastructure. Maybe you can help us understand why more upstream in Malaysia is important.

Is it really around those other comments you mentioned in Dim's question around helping Malaysia with more industrialization and developing or improving a relationship there? Or is it something else?

The upstream, as I think everybody who's even a casual observer of this industry knows, the ionic clay deposits will have a slightly different assemblage of rare earths. So we see that there is benefit from that -- potential benefit from that for Lynas.

And then most certainly, we also see that the benefit of really contributing to Malaysian prosperity will be good for our business.

Just following on around the JS Link MOU. Does it preclude you from entering into similar agreements with other magnet manufacturers?

And yes, that's probably the key component of the question.

No, it does not.

Obviously, you don't provide a lot of quantitative guidance. But if I may, I mean, you had a long period of investment in lots of new capacity.

And that's -- your cash balance has obviously dwindled while that occurs. That's understandable.

We haven't got CapEx guidance or cost guidance that you had, but maybe a simple one, do you think that from here the next quarter, is it a time where we start making free cash flow and adding back to the cash balance? Or is there still investments that need to be made that might mean that's not the case?

I think we actually have indicated previously that we did see FY '25 as sort of the end of the significant -- of certainly of the Lynas 2025 capital. To stop growing, to stand still is sort of not a great place to be.

So will we be looking at other opportunities for investment? Yes, but we are substantially complete.

There will be some trailing capital payments because we didn't feel it necessary to pay everybody before the year ended. So there are some trailing capital payments, but no further commitments, significant commitments associated with Mt Weld expansion or Lynas Kalgoorlie, which were the 2 really big projects as far as this was concerned.

As we look forward, will we look at other investments, which may include sort of increased capacity for heavies in Malaysia and various other areas? Yes.

But we are very focused internally on the fact that we've spent this money on upsizing our capacity. And our job now is to make sure that we deliver a return on those investments.

Amanda, a question on the next 12 months and not -- I know it's all about the big picture though, from a perspective that you ramp to 10 and then you look at options beyond that -- sorry, ramp to 12 and look beyond that and further to your comments just then. But just on the next 12 months and looking at the ramp-up at Mt Weld, which is actually going really well.

And you'll be producing first flotation concentrate in September quarter. And I'm sure Chris Torisel, ramp this 1 up quick, right?

So -- but when you do ramp this up over the next 12 months, considering that the Japanese can't take all the 7,200, the 3 customers, what happens here? Do you, A, sell excess production to China?

B, do you stockpile oxide material like MP is doing? Or C, I should say, do you slow down the ramp up after you tested Mt Weld?

Most likely slow down the ramp-up after we've tested to full. I mean we can look to different ways to manage -- we ought to operate.

We can look at -- do we run sort of a quasi batch sort of campaign-based approach? We did that at Mt Weld for many, many years very successfully as we were sort of improving performance in Malaysia.

So there are a variety of pathways available to us. But for us, producing to a stockpile, we don't see as being on the face of it particularly attractive.

Maybe carrying a bit more inventory as I said earlier, than we have traditionally done could have some value to it. But we think that the sensible thing is to match to the market rather than to sort of -- everyone get a rush of blood to the head and end up sort of producing at rates that flood the market.

So that will be the way that we look at it. You can't bank a ton and you can back the dollar.

Got it. So basically, you're saying you're matching to the ex-China market effectively?

We have some customers inside China, Paul, who have been -- for many, many years and who have been good, faithful and loyal customers, and we would expect that we will continue to do business with them. But yes, our primary market is outside China.

Looks like I've just got squeezed in before you cut me off on the hour. Amanda, just a quick question on Texas, noting your comments that it looks like there's a bit more engineering and the likely impact on capital.

More interested about the product that might come out of the Texas heavies plant. And I know you don't like to talk too much about what MP is doing.

But if you have a look at the plans for magnet manufacturing capacity expansions, one thing I think everyone can agree on is MP don't have a lot of heavies. How do you think Texas, what you're doing in Texas might fit into the broader strategy of the DoD to build out that magnet supply chain in.

But could you be a customer, for example, of that magnet facility? I'd be interested in your comments on that.

You mean a supplier.

Yes, correct, site supplier.

Potentially. Yes, sure.

I mean, we are in the business of making products and selling products. So if we have someone who wishes to sell it -- to pay us for the product that we produce, then we will certainly give that to consideration.

Just to square all the comments at a high level. When you think about the 12,000 tonne expansion and you're at capacity, you referenced the Japanese market before and the agreements there.

How do you sort of envision the split of Japanese sales versus ex Japanese and ex China sales once you're at full capacity based on what you think in terms of the Japanese market growing and the requirements to serve that market?

That's a very big question, David. I think that we see that Japan remains our foundational sort of volume market, and we have extremely strong relationships there and good, strong contracts.

The Japanese magnet makers are more than competent. I mean they invented -- the Japanese material science has invented rare earth permanent magnets.

They still know more and have more technology than most other magnet makers in the world. And in fact, the things that really on a number of items, which are definitely gaps for some of the aspirational magnet makers outside of China, the Japanese have the technology that some of these others do not, and so therefore, are unable to capture the same sort of economies that the Japanese magnet makers can.

So we do see that our rock solid foundation remains our relationships with Japanese magnet makers and Japanese magnet buyers, of course, and also with other segments in the Japanese market, whether it's auto cat or MLCC, micro capacitor market or sort of -- it's in electronics as well as in automotive. As I mentioned before, we are working very hard with a number of the sort of aspirational or existing -- focus first on those who have a proven capability like the Korean magnet makers to grow that business.

And we see that as being very, very positive and probably sort of a significant sector in our business portfolio as we move forward. And then as we see the development of magnet making capacity in the U.S.

and/or Europe, we are engaged both with those potential magnet projects, but also with the magnet buyers. So Japan will remain sort of key.

I think that at least for the next few years, we would see that East and Southeast Asia remains sort of the key engine room of the rare earths market, but we are happy to partner and to support development and capability outside of that jurisdiction as it develops.

Just on your comments that your production will match the future demand and conscious that there are not many magnet facilities outside of China, is that correct to understand that your future production expansion is going to be able to buy additional JV announcement the way you announced today with JS Link. So there should be more similar partnerships to be announced in the next few years.

Austin, you know that I don't announce ahead of time. I think that -- suffice to say that we assess every opportunity on its merits.

There we go. But we are a serious player in the rare earth market.

It is our core competence. We wake up every morning thinking about it right across our business.

And so therefore, we will participate in this market in the way that it's going to deliver best outcome for all of our stakeholders.

Okay. So once again, thank you all.

And I'm sure that we will be speaking again in relatively short order as we, next month, bring forward our annual results. I hope you all have a great day.