The largest producer of rare earths outside China is benefiting from higher prices and stronger demand for its products. At the same time, technical challenges and sharply rising costs are weighing on efforts to build alternative supply chains.
Australian rare earth producer Lynas has reported a record quarterly revenue for the fourth quarter of its fiscal year 2026. During the three months ending in June, the company generated approximately $202 million, marking its strongest quarterly revenue in four years. Revenue increased by 70% year over year, driven by higher realized prices for neodymium-praseodymium (NdPr), a larger share of high-value heavy rare earth products in its sales mix, and growing demand for supply chains outside China.
Operational performance, however, was mixed. Total rare earth oxide (REO) production rose slightly to 3,481 tonnes, but NdPr output declined from 1,996 tonnes to 1,857 tonnes. Lynas attributed the decrease to water treatment issues at its Mt Weld mine in Western Australia, as well as fluctuations in ore quality. These factors disrupted downstream processing at the company’s Kalgoorlie processing facility in Australia and its refining operations in Malaysia.
Expansion of Alternative Supply Chains Proves More Costly
Lynas also encountered setbacks in its capacity expansion plans. The estimated cost of its heavy rare earth processing facility in Malaysia has increased significantly, from approximately $126 million to $206 million. According to the company, the higher budget reflects additional processing technology required to meet stricter product quality standards, as well as the higher cost of sourcing equipment from suppliers outside China.
The company did, however, report progress in broadening its product portfolio. Following the first production of samarium oxide in March, Lynas expects to begin customer shipments during the current quarter. Production of gadolinium, yttrium, and later lutetium is scheduled to follow. All four are among the seven rare earth elements whose exports China placed under strict licensing requirements in April 2025. Since then, producers outside China have accelerated efforts to expand their product offerings and strengthen the resilience of global rare earth supply chains.
Lynas is widely regarded as one of the most important companies in the effort to establish a secure Western rare earth supply chain and continues to receive support from governments, including the U.S. Department of Defense, as strategic economies seek to reduce their dependence on Chinese supply.
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