Good day. Thank you for standing by. Welcome to the Lynas Rare Earths quarterly results briefing conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Lynas. Please go ahead.
Thank you. Good morning and welcome to the Lynas Rare Earths quarterly briefing for the December 2022 quarter. Today's briefing will be presented by Amanda Lacaze. Joining Amanda are Gaudenz Sturzenegger, Chief Financial Officer, Pol Le Roux, Chief Operating Officer, Daniel Havas, VP Strategy and Investor Relations, and Sarah Leonard, General Counsel and Company Secretary. I'll now hand over to Amanda. Please go ahead, Amanda.
Good morning, everybody. I hope that, I guess I should start with Happy New Year. For those who celebrate Lunar or Chinese New Year, Gong Xi Fa Cai. I hope everybody had a really lovely festive season, and have come back with enthusiasm and excitement for a great 2023. I'm pleased to have lodged today's quarterly results. You know, it was a relatively uneventful quarter, which was a delight after, you know, some of the challenges of the prior quarter. Which of course, we talked about in a lot of detail, including the catastrophic failure of water in Malaysia. We did have a few, you know, sort of hangover challenges from that at the beginning of the quarter.
We finished the quarter back at Lynas NEXT rates and look forward to being able to continue. Both of our operational sites performed really well. Just as an interesting aside, we had record, a record quarter at Mount Weld. We are making some very good progress on ensuring that we really are optimizing performance right through the value chain from mine to big bags at the end of the LAMP facility. We also made really excellent progress on all of our major projects. Just as a refresher, that includes our big project at Mount Weld, where we're expanding throughput by actually four times, which expands our output over time by double. We've got already Builder's Work contractor has been mobilized.
We've started the procurement of the long lead time items. That project is prioritized in a way that, you know, we're making the investments that are, you know, creating bottlenecks for our production today first. We will release those bottlenecks with our objective being that we will be able to, you know, sort of progressively move production up rather than just jumping from today to the 1,000 tons a month, which is the target by the end of next year. In addition to that, you know, we are building our stockpile for the Kalgoorlie facility. It will initially be fed with what we're describing as direct shipping ore, which is very high-grade material which we've segregated from the rest of the material.
There's not a constraint from the concentrator on our ability to actually build that, build that inventory to feed the Kalgoorlie plant. Kalgoorlie itself, really, our project manager, you know, was just telling me on Friday, it just is a fabulous time to be on site, and I'm looking forward to being there next Monday, when we will be in Kalgoorlie, importantly, signing a cultural agreement with traditional owners associated with our Mount Weld facility. Grant tells me that every day there is something new to look at, and it is very exciting indeed to be operating at this time and seeing the huge progress. Bearing in mind that, you know, it's still less than 12 months from receiving full approvals for that site.
We continue to work on our U.S. processing facility. Making good progress on deliverables associated with that project. Of course, in Malaysia, we have some significant development occurring to ensure that we can receive the mixed rare earth carbonate which will arrive from which will arrive. Sorry, I'm looking at a chat here which is saying that someone can't get a question in. So I shouldn't look at that, should I? So in Malaysia, we've got a significant project to receive the mixed rare earth carbonate from the Kalgoorlie facility. As with all of our projects, we will take the opportunity to improve a number of other elements of our processing facility, including, in this instance, things like soda ash loading and unloading.
Because if we're going to be making an investment in a new building and new capability, then it makes sense for us to use that opportunity to continue to improve efficiencies in our operations. In terms of the business, the market continues to be very buoyant. Whilst the price was very stable through the quarter, it started to pick up in December, and we continue to look into a market with strong demand and, you know, really very good pricing prospects for our business. One of the other things which I think we sometimes, you know, sort of underestimate is we're not just an NdPr business. The value which comes from selling our other materials is important within our business.
You can see this when you look at the average price received over the quarter, that whilst the NdPr price was relatively flat, our average price actually lifted up, and that was a consequence of both the SEG pricing, heavies pricing remains very strong, but also increasing in sales of higher value-add lanthanum and cerium materials. A good quarter. We're doing everything we can to make sure that the quarter that we're in is gonna be an even better quarter. My colleague, Pol, has a very popular saying within the business that we are much better than yesterday, but much worse than tomorrow. Certainly that's our objective, is to ensure that we continue to improve. A good quarter.
Pleased with it, pleased with the settings in the market, pleased with our, you know, what we've been able to deliver in terms of production and sales, and certainly, very pleased with the progress on, you know, sort of our really very significant projects. With those, just, you know, sort of general opening comments, I'm very happy to take any questions that people might have.
Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Paul Young of Goldman Sachs. Please proceed with your question.
Thanks for morning. Morning, Amanda and team. Happy new year as well. I hope you're all going okay. First question is on the realized pricing. Good kick-up in the realized pricing for the other products, Amanda, as you mentioned. Just on the SEG pricing, the heavy pricing and the lanthanum cerium, the improvement in product mix and pricing. Do you expect that to continue over the next couple of quarters and into the medium term?
I think that we think that the heavy rare earth price remains very positive, and we would expect that that will continue. We would hope that we will continue to improve the contribution from our lanthanum and cerium materials as we increase the amount of higher value-added material that we sell.
Okay. All right. We should assume from modeling purposes a bit of a continuation on that, on that AUD per kilo on the other products in that case. Thanks for that. The next question, Amanda, is on projects, and some good progress on the Kalgoorlie Cracking and Leaching in the, in the quarter. Just observing, I guess, again, the pictures on some of the key items there and just sort of trying to match that with the, you know, the first of July deadline. Just wondering if you could just step through, you know, internally, or when you expect, you know, first carbonate production from Kalgoorlie, and just talk through maybe the ramp-up and just how that sort of matches again, with discussions with the Malaysian government.
Just on that, if you can just maybe just talk through the new Malaysian government, you know, how they've been, or how recent discussions, if you had some, have gone with respect to, you know, potentially extending the permit on the cracking and leaching uptime or operations, I should say, in Malaysia, beyond 1st of July, sort of just to match with that ramp-up requirements from Kalgoorlie.
Yeah. Paul, that was a question of very many parts. It would not surprise you to know that, you know, we have a huge amount of effort in the business focused on, you know, sort of this transitional period. If we take first the situation in Malaysia, as I think we've indicated previously, it is a matter of public record, disclosed by a previous minister, that we have appealed for the removal of the four conditions that were applied three years ago to our operating license. You know, our position is very strongly that we run a low risk operation. We are a lawful company which is compliant with all regulations, we have never been involved in any sort of health or environmental incident.
You know, the most compelling data that we have is now our 10 years of safe operation in Malaysia. Of course, you know, governments change. Our advocacy has always been that decisions should be made to ensure that we are treated fairly and equitably and that our performance is recognized. When the AELB does their audit of our operations in Malaysia, we have consistently been rated as very satisfactory, which is the highest level which is available. All that we seek from government is that decisions are fact-based, not actually made on the basis of some of the alarmist statements from some activist groups, which even the IAEA has said have no basis in scientific fact. We continue to engage with both the regulators and also with the government.
As recently as last month, we had a delegation from Malaysia come to visit our site in Kalgoorlie. You know, we have never pretended that we can forecast timelines that governments may choose. We are, you know, actively engaged with, as I said, both the government and the regulators. In terms of, you know, sort of feed on and ramp up in Kalgoorlie, you know, we have our own targets, which of course are all about ensuring that we will be able to bring that facility online. We are also looking to opportunities where we can ensure that we have, you know, sort of safety stock as required, as we manage, potentially a transition period.
Okay. Thanks, Amanda. Can I just clarify one thing? Is one of the options or that you're planning for a transition period? It sounds like it is as far as, you know, having to run LAMP below capacity, you know, as Kalgoorlie ramps up.
Look, we've got a number of scenarios, and we're preparing ourselves for all of them, right? The best possible scenario is one where we're running two facilities, which gives us a straight up uplift in the ability, you know, in throughput. Right through to one where we are required to close down one facility and operate the other. We're managing a number of different scenarios, and you know, it will be clear long before the first of July which of those we will be required to execute.
Okay. All right. Okay. Thank you, Amanda.
Thank you.
One moment for our next question. Our next question comes from the line of Daniel Morgan of Barrenjoey. Please proceed with your question.
Hi, Amanda and team. The plant clearly exited December at a very strong run rate, and I think you said earlier that you're looking for Lynas NEXT rates to be achieved, which is about 1,800 tons a quarter of NdPr. Is that what you anticipate for the next few months or next couple of quarters for your throughput? Is there any major maintenance or anything else that might impact being able to run at that rate?
Not every month will be the same, because of course, some months have 31 days and some months have 28 days. Running at around about 7,000 tons a year is always our objective and, we're just pleased that, you know, we're at that sort of run rate at present. We are always, you know, sort of cautious about making strong predictions on this, given some of the impacts that external factors can have on the business.
Thank you. Just on Kalgoorlie, the plant, which obviously I can see progress there. Just wondering your expectations once everything is in place and the plant is complete, how long do you think it takes to ramp up and commission the plant to full capacity?
I think that that will not be absolutely clear until we commence operations in that plant. Suffice to say that we have a really strong commissioning team. We have our operational team all in place already in Kalgoorlie. It's a residential team, writing processes. We will have all of the equipment properly tested before we commence. We have our significant, you know, sort of experience of operating a plant of this type in Malaysia. We expect the ramp-up time will be assisted by that level of experience that we have. At this stage, we won't be disclosing any specific timeline on that.
Okay. Thank you very much, Amanda.
Thanks, Daniel.
One moment for our next question. Our next question comes from the line of Al Harvey of JP Morgan. Please proceed with your question.
Good morning, Amanda and team. Just following up on the licensing in Malaysia. Just wanna confirm which works are actually underway. My understanding is there's the renewal for the entire facility due sometime around March 2023, and then the negotiations or your appeal on the restrictions put on cracking and leaching for July is occurring in parallel. Just kinda trying to get a sense of whether or not you think that those two could come concurrently, and if we're still expecting that before March this year?
Al, I've learned not to predict how either regulators or governments may choose to proceed. You are right. We operate under an operating license in Malaysia. The AELB, you know, we've had five of those issued over the period of time that we've been operating in Malaysia. The AELB issues those licenses with, you know, Well, we had a single set of conditions for the first, you know, sort of, seven, eight years of operation. We had, you know, sort of these additional conditions placed upon the operating license in March 2020. Our objective is to, and our appeal is to have those conditions removed. However, those conditions are not effective until the beginning of July.
You know, one scenario may see us with our operating license renewed with the conditions in place. Another one may see us with the operating license renewed with the conditions removed. You know, as I said, we continue to engage both with the regulators and government, and to prosecute our case very strongly for the fact that, you know, we have operated safely for 10 years under a set of operating conditions, and there's no scientific basis for making a change to those.
Great. Thanks. Thanks, Amanda. Secondly, just a bit more detail on the water reliability issues. Just wondering if the improvement is a reflection of a better performance of the pipeline, is it seasonality or is it some of the backup measures you put in place over the last couple of months or a combination? I just wanna try and get a sense of if and when we might see a return of water issues down the track?
Well, the issue that we had in September was a catastrophic equipment failure. We haven't had, you know, sort of an equipment failure of that magnitude in the time that we have been in Malaysia. You know, it was a big pipeline that burst, and it was, you know, 10 meters underground and, you know, it affected everybody, residential, industrial, everyone. It would be our hope, and I am sitting at a wooden table, so I'm touching wood, that this will not occur again.
In terms of some of the other issues associated with our supplier pipes, there have been a variety of different issues over time, which we have generally been able to mitigate, which may be associated with the pumping, you know, the pumping station or another time we had an issue with the bund wall which failed. Generally, we have been able to mitigate those issues. We continue to work on projects which will see us, you know, not have to use as much water. I mean, this here is consistent with, with best practice sustainability practices, so we certainly want to be doing that. That includes opportunities to recycle water and some rather exciting, you know, sort of further developments on that.
They are not short-term fixes, so we do continue to have our pipeline to the local You know, sort of pit which fills up with water when it rains, and it's rained a lot in the last three months. Pipe water supply has been consistent now across the quarter and we really haven't had to rely on some of those other initiatives.
Right. Maybe just a final one before I pass on. Just wanna understand if there's any potential for you guys to provide a reserve update sometime this year on Mount Weld. Guess, just really pretty keen on getting the split of contained rare earths and at deposit and how that changes with depth. I guess we haven't seen a split out in a, in a reserve or resource statement for a little while. Any update there?
Yes. We will do, at a minimum, we'll do a reserve update as part of our annual report because, of course, we're required to do that. We have a whole team working on, you know, on defining the carbonatite, on reserve, or resource in the first instance. That work continues. I don't expect that we will be finalizing that within the next six months. In addition to that, we are doing a lot more, drilling, as part of preparation for our next mining cut back, and, you know, to more accurately define the reserve.
You know, when Lynas first started a decade ago, more, more than that, 14 years ago in Mount Weld, we had really good drilling in quite a small area of the ore body in what we call, you know, in the central lanthanide deposit. We had a lot of other drill areas where it was relatively sparsely drilled. Now we are progressively drilling through different areas to properly flesh out our understanding of the ore body. The other thing which, you know, we are working on is we have a 4% cutoff grade, which, you know, of course is sort of pretty amazing compared to some of the other deposits which are being developed.
We are doing some further work to really understand whether that, which was set once again very early on in the process of development of the Mount Weld ore body, whether it remains the economic, economically optimized to be, have a cutoff grade at that number or whether we should be looking at a different cutoff grade. We do have a lot of work going on in terms of both geology and mining. Yes, we will be providing both resource and reserve updates. We don't expect that we will have completed the carbonatite work by the time we do the next substantive update. We believe that we will have substantive information related to the reserve as it is currently conceived. Does that make sense?
Yep. I might come back with a follow-up, but I'll pass it on for now.
Well, I'd be happy, to, you know, sort of, facilitate a discussion as our, with our Mount Weld team to provide some more detail. I guess suffice to say that, you know, as a business we seek to always have, a long, life, reserve. The work that we are doing, drilling both within the current, deposit and also at depth, is all part of ensuring that we have that we maintain, you know, sort of that long life.
Right. Yeah, definitely love to be able to pick brains of the Mount Weld team. Just while I've got you, I might just throw in one last question. Just thinking about markets and Chinese production quotas. I assume we're probably gonna get another six monthly update pretty soon. Have you or the team got any views on whether they'll likely increase those, the output there? Noting that it's increased it up by about 20%-25% over the last couple years.
I might actually pass that over and let Pol answer that. He's much closer to that than I am.
Yeah, good morning. Well, first on the production quotas. You remember that last year, combining first and second half, the production quotas led to around 20%, a bit more than 20% increase, and that was balanced with the demand increase. That reflects in a fairly stable price. Next production quotas are expected to be released after the Lunar New Year. It's a bit like with any regulators. There is no one knows what will be. I believe it will still be in line with the variation of demand, but that's all I can say on this.
All right. Thanks very much, Team.
One moment for our next question. Our next question comes from the line of Austin Yun of Macquarie. Please proceed with your question.
Hi, morning, Amanda and the team. Yeah, congratulations on the strong quarter results. Two questions from me, please. The first one is on the price realization. Just wondering if you could provide a bit more color on that new lanthanum and cerium specialty product you developed. Like, how much of the price premium can you get for this product? I'll come back with the second one. Thank you.
Okay, thank you. Once again, I'd like to pass over to Pol for that because this is an area of passion for Paul.
Yes. It's a very complex question to answer. I would say that we focus on adding value to basically cerium product mostly, and lanthanum as well, but cerium number one. You can check when you run the numbers, you can analyze the premium. It is already substantive. We have a lot of work and a plan of development for a lot more added value. As usual, the more complex targets you target, the more time it takes. This will continue over the next, I would say, years. Definitely it's a very important KPI for us.
That's why we reinforce our R&D pool to develop a new product application in the cerium main, basically cerium area, which will continue to be in oversupply for quite a while. For numbers, sorry, I can't really give you numbers precisely. It's substantial.
All right. Thank you. The second one is on the cost inflation. Just wondering, Amanda, how are you managing the cost inflation pressures at the Mount Weld and the Kalgoorlie project? I mean, in this reporting season, we see many companies reporting higher costs. It seems like this inflation pressure is kind of staying with us.
Yeah. We, we did provide an update last time on the fact that a combination of growth in scope and also cost escalations at Kalgoorlie saw us update from AUD 500 million- AUD 575 million, but basically a 15% uplift, bearing in mind that that was a combination of both costs and scope changes in the facility. Yeah, we see pressures across all of the business, but, you know, we're paid to manage those. We focus on ensuring that we continue to deliver efficiencies. If unit costs go up and they are unavoidable, well, our task is to implement projects which will see us improve the efficiency of operations. You know, whenever we think about costs, we think about how do we do things better?
If we do things better and we reduce waste, then costs will inevitably come down as a result. We do have escalation of costs, but we also have improvements in efficiency. We've not had to take any, you know, sort of, significant actions to, you know, drive cost out of the business. In fact, quite the opposite. You know, we continue to grow our investment in the business because we're facing into such a strong growth market. You know, when we look at our costs, we certainly see two or three big contributors to cost escalation. At Mount Weld, of course, a huge one of those is energy and increase in diesel costs.
We are working on alternate energy solutions for our Mount Weld facility, which over time will drive, you know, sort of costs out of the business, we believe. You know, in, in Malaysia, say, for example, you know, we've seen really significant increase in sulfuric acid prices, you know, which had been stable for a very long period of time. Once again, it's not something which is avoidable in the short term, but continuing to enhance efficiency, continuing to improve recoveries will mitigate to some effect the, to some extent, the effect of those price increases on the business performance.
Thank you, Amanda. I'll pass down.
One moment for our next question. Our next question comes from the line of Reg Spencer of Canaccord. Please proceed with your question.
Thank you. Good morning, Amanda and Pol and team. I'll start with Malaysia, if I can presume. I'm sure you guys all have seen the press last week relating to a decision on the extension of your license conditions in Malaysia. That press referred to a potential decision by the government early next month. I'm not sure whether or not you'd be willing to comment on that, but can I have a different view, either of asking you to comment on that?
Look, you know, don't believe everything you read in the press. In this instance, as we've disclosed previously, our operating license is due for renewal on the 2nd of March. We do expect that we will have some indication from the regulator with respect to that operating license renewal. Certainly no later than the 2nd of March.
Okay. Thanks. Sticking with Malaysia again, just confirm something for me then. Your annual concentrate import limit gets reset. Is that reset at the start of the year such that -
It's, yeah-
- regardless of the Sorry, such that regardless of the...
Sorry, Reg. Regardless of what?
The outcome of the operating condition operating license conditions would provide you with enough concentrate to get you through the ramp up of Kalgoorlie. You're working now to build up that concentrate for the next six months or whatever that timeline happens to be?
Look, we have a series of conditions associated, a standard conditions associated with the license, which includes the amount that we can import, the quantity which can be stored on site at any given time. You know, at various times, we've been able to get variations to that, like particularly through the pandemic, where we had sort of variability in the amount which was delivered and when it was delivered. We also have conditions associated with the amount that can be processed. We manage within all of those conditions. Without trying to, you know, sort of, make it too complex, you know, there's, as I said, you know, there's a series of conditions. We manage to those conditions. Yes, one of them is associated with the amount that we can import.
Yes, it does, reset on the first of January each year.
That's useful. Thanks, Amanda. I'll pass it on. Thanks, guys.
Thanks, Reg.
One moment for our next question. Our next question comes from the line of Dim Ariyasinghe of UBS. Please proceed with your question.
Cool. Thank you. Thanks, Amanda and team. Look, just a quick one from me. I was just hoping you can reconcile, help me reconcile some of the numbers. CapEx for this year, you've guided previously towards AUD 600 million, and then there was a CapEx creep for Kal that you reported on last quarter, so that takes it to AUD 675. I'm just trying to reconcile that with the cash spend of AUD 240 for the half. Do you expect the second half to be more heavily back weighted or could you just walk me through that? Thanks.
Yeah, sure. I'm happy to let Gaudenz add a bit more onto this as well. Yes, this is cash. We're now committed almost fully in terms of purchase orders associated with the Kalgoorlie project. This is just a timing issue, as, you know, to when it actually goes out. Notwithstanding guidance, if we don't have to pay something, we don't pay it just to stick with the timeline. Gaudenz, maybe you'd like to say something more to the capital profile.
Good morning, everybody. I think on the CapEx, what you can really see is, particularly on the cash side, an increase in spend level, which obviously follows the commitment PPOs which switch out in the market. I think the last quarter was above AUD 140 million and the quarter before, AUD 100 million. You see a clear trend and that would, well, I'm very sure we see the trend to continue. Particularly the next two quarters will be quite high in specifically in regard to the Kalgoorlie project, which logically makes sense. On the Mount Weld expansion program, we will see a ramp up as well, but on a much lower level at this point in time.
Right. Okay, cool. Thanks. Just, what, yeah, when can we expect to get up to Kal and do more than a drive-by or so on the works or?
You know, frankly, we have a huge number of contractors on site. We wouldn't even take you onto the site right now because, you know, just managing the traffic with the contractors on site is a challenge in and of itself. Yeah. I can't answer that, but I'll have Daniel come back to you with some estimates on timing. You know, it certainly won't be whilst we've got, you know, sort of hundreds of people actually building stuff. It's gonna be some months before we would be able to have visitors on site.
Oh, that's clear. Okay, cool. Thanks guys.
One moment for our next question. Our next question comes from the line of Paul Young of Goldman Sachs. Please proceed with your question.
Thanks. Hi, Amanda. A few follow-ups from me. Just on your ex-Malaysian and actually downstream strategy. Just wondering if you could expand on the comments on the U.S. refinery. I know you said that you made good progress on deliverables. Just wondering, you know, what that is. Has construction actually started? Have you selected the, you know, i.e., the site? Yeah. Just after a bit more information on the U.S. refinery progress. Thanks.
We've identified a site. It's on the Gulf Coast. We're working with various levels of government on finalizing that position. It, we think that it's a very good site for the plant because it's within an already industrialized area, has good services, has access to very good and skilled labor. With respect to engineering, detailed engineering and design, that's, you know, been completed, but now we're working with, yeah, so the outsourced engineering team. I mean, we think we've had some fairly challenging inflation of costs in Australia. In the U.S., it's been, you know, at Australian levels plus some. We have populated more of the team with both internal and external resources.
It's that stage where there's nothing much exciting to see, but all of the heavy lifting in terms of your sort of planning and, you know, design development, all of those sorts of things. That's where we are right now.
Okay. That's all.
Not very exciting for everybody outside, but quite exciting for the project team.
Yeah. Yeah, okay. Understood. Thanks, Amanda. Just your comments around engagement or incoming inquiries from OEMs and non-China magnet facilities for offtake. That's really interesting. I guess the question I have is around, you know, of the 12,000 tons of NdPr you wanna produce, how much actually is actually not contracted? I guess outside the Chinese and Japanese contracts.
Okay. I'll just hand over to Pol to answer that question.
I can make a very simple question answer. Since our production capacity currently is 600 tons a month, we don't contract over our capacity. The day we are 1,200, that would be 600 tons a month additional to contract. 'Cause people won't sign a contract on a promise that you will sign their produce. They want to see evidence. Sometimes they sign MoU with a company saying they will produce REEs sometime in future, but it won't go to a contract level. The answer is very simple. We just have a queue of OEMs, and lots of discussion ongoing with them for securing the supply of REEs. In addition to that, anyone who has a project for magnet making outside China today comes to Lynas.
That's why, because we are the only ones supplying NdPr outside China. All in all, we are not short of demand. I would have to say that we're short of supply, but that's my problem as well.
Yeah. Thanks, Pol.
The short answer.
May-
The short answer is we don't sell anything in the spot market.
No, I just understand that. Yeah. It's just from a volume perspective on a percentage terms versus a, you know, Lynas 2025, the upsize plan. That, but that what Pol just said is very helpful. Last question I have, Amanda, is just on, you know, I mean, this industry, everything is developing so quickly. Every quarter, you know, from a mag, you know, downstream perspective, the magnet industry is changing very quickly, and will change very quickly, you know, over the next couple of years, from perspective of government funding, but also involvement of OEMs. You see what MP Materials has done, but also new entrants across the value chain.
Are you interested in, you know, is one of your, you know, things you're looking at, you know, potentially getting funding from OEMs or even actually getting involved in magnet making?
At this stage we don't have a gap in funding. You know, we're not specifically looking for additional funding sources. In terms of do we expand into certain downstream activities, we have a continuing watching brief on that, and have done quite a lot of work really on what are the opportunities, what that might then look like, how could they be executed. Right now, and the last time we did, you know, sort of a full review on this, we can get bigger bang for our buck, for our shareholders by increasing output than we can by diverting attention into some of the downstream activities. You know, we are...
One of the hallmarks of our success is that we focus on doing things, completing them, and then moving to the next one. Right now we have a very, very full agenda with the Mount Weld expansion, with Kalgoorlie, with the further development of the Malaysian facility and with the U.S. Yes, we have work ongoing with respect to downstream development, which we will brief at an appropriate time.
Okay. Thanks, Amanda. Very interesting. I'll leave it there.
Thanks.
One moment for our next question. Our next question comes from the line of Al Harvey of JP Morgan. Please proceed with your question.
Thanks, thanks for the follow-up. Maybe following up with Pol, just you mentioned you know Chinese quotas could come in line with demand growth. Just wanted to get a sense of where you guys are seeing, you know, your forecast for demand growth in 2023, and then maybe out on a five-year view, if you've had any substantial changes since you've last mentioned those things?
Okay. Short-term growth, 2023 for us, we are more than fully booked with our existing contract. The growth, especially in electric cars, continue to be very strong, with a bit better or slightly improved situation on the semiconductors supply, which has been cutting a bit of the growth last year. On the long run, definitely, this will continue, we're talking about double-digit growth for the next five years at least. Unless there is something like a global financial crisis that we experienced a few years back. The question being where will this demand come from? Is it from China or is it from outside China? That's the game that is being played at the moment. Who will be the leading country for electric cars?
There is a lot to do in the West to to not to not lose this fight against China or. Yeah. That is yet to be seen. We, we don't see we see a lot of announcement of magnet, new magnet projects. So far outside China, I've seen only one new factory in Japan from Mitsui, but that's an existing magnet maker, and that's a very excellent customer of Lynas. That's the only one who did actually increase production outside China so far. We'll see.
All right. Thanks, Pol. Thanks, team.
As a reminder, to ask a question, you will need to press star one one on your telephone. One moment, please.
Okay. It sounds to me like we might have had all of the questions. We're about five minutes from the end. If anybody else has a question, now is good time. Otherwise, I would once again thank you all for your interest and look forward to seeing you in person as we move through the year.
This concludes today's conference call. Thank you for participating. You may now disconnect.