Australia's Lynas flags cost overrun after revenue miss, shares tumble (updated)

Lynas Rare Earths

22/07/2026 24:37

Quarterly sales revenue jumps nearly 70% to A$288.9 million
Malaysia project cost rises to A$294 million from A$180 million
Shares drop as much as 9.1%, hit lowest point since February 6
Recasts and adds details throughout
July 22 (Reuters) - Australia's Lynas Rare Earths LYC.AX on Wednesday warned of a cost overrun at its heavy rare earths expansion project in Malaysia after reporting fourth-quarter revenue below analyst expectations, sending its shares to a more than five-month low.
The world's largest rare earths producer outside China said the estimated cost for the Malaysia project rose to nearly A$294 million from A$180 million, underscoring the challenges Western producers face in producing the niche metals.
Lynas said the next step at the project is first production of gadolinium in early fiscal 2028, yttrium in early calendar year 2028 and, finally, lutetium.
Shares of the company fell as much as 9.1% to A$14.510, their lowest level since February 6, and were the top laggard on the benchmark S&P/ASX 200 .AXJO, which was up 0.1%.
The quarterly revenue was however Lynas' strongest in four years, helped by incentives that supported prices for Western producers of rare earths, a group of metals used in renewable energy and defence.
"Customers continue to focus on securing sustainable, outside China supply chains due to geopolitics and export restrictions," Lynas said in a statement.
Quarterly sales revenue jumped nearly 70% to A$288.9 million ($202.20 million), but was about 20% below the Visible Alpha consensus estimate.
The weaker-than-expected sales result overshadowed gains in pricing. The average selling price rose to A$98.2 per kilogram from A$60.2 per kg a year earlier.
The company said ore quality issues at its Mt Weld project in Western Australia affected production, with total rare earth oxide output rising to 3,481 metric tons from 3,212 tons a year earlier, but coming in 10% below the Visible Alpha consensus estimate, according to Jefferies.     
     
($1 = 1.4288 Australian dollars)

 (Reporting by Keshav Singh Chundawat and Anjali Singh in Bengaluru, Additional reporting by Melanie Burton; Editing by Diti Pujara and Subhranshu Sahu)
 ((Keshav.SinghChundawat@thomsonreuters.com; anjali.singh2@thomsonreuters.com;))