Ladies and gentlemen, thank you for standing by, and welcome to the Lynas Rare Earths quarterly results call. At this time, all participants are just in a listen-only mode. Following the presentation, there will be some time for a question-and-answer session today. To ask a question via the telephone, you'll just need to press star one on your telephone. Just please be advised that today's conference is being recorded. Without further ado, I'll now hand the call over to Lynas Rare Earths. Thank you, and please go ahead.
Good morning, and welcome to the Lynas Rare Earths investor briefing for the June quarter of FY 2021. Presenting the briefing today is Amanda Lacaze, CEO, and joining Amanda on the line, Gaudenz Sturzenegger, CFO, and Sarah Leonard, Company Secretary and General Counsel. Please go ahead, Amanda.
Thanks, Jen. Good morning, everybody, and thank you for joining us this morning for what is really one of the most pleasing quarterly reports that I’ve had the opportunity to present. Really, not a lot to add, but I would make a few comments. The first is that, you know, it is always our number one objective to ensure that we keep our people safe. Never has that been more challenging than in the environment at present in Malaysia, where pandemic conditions are real and, you know, very, very difficult for everybody. I'm not really big on using superlatives in a business sense. I've had too many ski instructors tell me that my turns are awesome, when in fact, I know that they're anything but.
But in this instance, I can tell you that I do sit in awe of the determination, the discipline, and the resilience of particularly our Lynas Malaysia leadership team, and every single member of our Malaysian team. Within an environment where infections are incredibly high and restrictions on operations are very tight, our people have kept our people safe, kept our operations safe. The leadership team has adjusted to new SOPs issued by the government quickly and efficiently. Some other challenges presented as a result of the pandemic, we've talked previously about some of the logistical challenges particularly related to shipping. In Malaysia, you know, we've had some issues also with water, as pumps have failed, and of course, some of the challenges around movement have made it difficult for the authorities to be able to address those.
Despite all of these challenges, our team has managed to keep production at just above the 75% that we've maintained through the year. And continued to implement a series of initiatives that will see us continue to improve our business, and continued engagement as appropriate with regulatory authorities and also with our communities. One of our most recent initiatives with our communities is one that particularly appeals to me, where we made up a series of care packs, and people in the company contributed to these, as well as the company itself. They had a chicken, a bag of rice, some noodles, and... Oh, now, I've forgotten what the fourth ingredient was.
But this has meant that, you know, we've been able to put a lot of these into our community, to ensure that people in the community who truly are doing it tough, in Malaysia, are able to continue to feed themselves and their families. Our financial results really speak for themselves. We put, you know, sort of our operating cash result was really exceptional, based upon record sales volume. Sorry, record sales revenue and of course, an extraordinarily positive average selling price for our materials. As noted in the report, there was a little softening of the price during the quarter, but this has recovered again during July.
I'm particularly proud of our continuing strong cost control and some very good progress from our research and development teams on implementing, identifying, testing, and implementing new and improved flow sheets, which will, in time, give us further reductions in cost in production cost. During the quarter, we've made really significant progress on our key Lynas 2025 projects. You've seen some of the photos. You know, the overall Lynas 2025 plan includes upgrades and changes at each of our sites. And so you can see, we've put some pictures in here of some of the things that we're doing at Mount Weld. And it's quite exciting actually seeing the development as we move forward at Mount Weld. In addition, you know, we've made really significant progress on our Kalgoorlie project....
It's starting to really get to the exciting part of this project. As you can see from the photo, we've got all five sections of the kiln shell completed or close to completion, and we have commenced preliminary site works on our site in Kalgoorlie, as approved by the EPA, and we're looking forward to further development of that site. In line with the Department of Defense milestones in related to the heavy rare earths project in the U.S., we've submitted all of the detailed engineering and design work, and at present are awaiting the Department of Defense's finalization of their merit evaluation of the submission.
We continue to be very actively engaged with various governments around the world, who remain focused on really developing better and more diverse supply chains in this sector. And we're delighted, only a couple of weeks ago, to welcome members of the EU delegation in Australia and representatives of 10 of the member countries to our site at Mount Weld. And that visit was co-hosted by the Governor of Western Australia, the Honorable Kim Beazley, which was really just a fabulous opportunity for us to show off the value, the quality of the ore body at Mount Weld and the skills and capabilities of our team there. And a really excellent quarter.
Just really delighted to be able to report this to our shareholders, many of whom have held our hands tightly through the years when, you know, we had a different set of challenges. You know, we look forward to continuing to deliver excellent results from our business. So with that, I'm happy to take questions.
Thank you. So ladies and gentlemen, we'll now be in that Q&A session. Again, if you'd like to ask a question, it's just by pressing star one on your telephone, and then just waiting for your name to be announced. And if at any time you need to cancel the request, it's just by pressing the pound or the hash key. Our first question today comes from the line of Jack Gabb. So please ask your question, Jack.
Thank you, and good morning, Amanda. Just a couple from me. Firstly, on pricing, you reported a nice pickup in average selling prices, and I realize some of that's down to NdPr. But just curious, was there much impact from a change in sales mix or notably higher realizations for SEG or cerium or lanthanum? Thanks.
Yes, most of it was driven by NdPr, as you would expect. SEG, yes, we have had some very good outcomes on that, and it's certainly one of the reasons why we've included, now for some time in the quarterly report, a view of dysprosium and terbium prices as well. That's seen strength in the SEG price, which has certainly been a great, you know, sort of underpinning to the improved prices on NdPr. And is, you know, sort of gives us more confidence. We've always been very confident, but even more confidence in the strategic logic of separating our heavy rare earths.
We are also doing more work on our geology and mine planning at Mount Weld to understand how we can best manage that resource, which, as you know, is unique because it is rich in heavies and in lights. Well, rich in lights and in heavy. And really, how do we modify our mine planning to ensure that we're able to optimize that, as well as that the operating teams are doing a lot of work on understanding the way that the different elements report through the process, so that we are maximizing recoveries on the most valuable of the elements that we produce. In terms of the lanthanum and cerium materials, there's not been any significant shift in pricing, but certainly, you know, demand has recovered.
So, that's been, you know, sort of really a very good thing for us because, you know, as I've said previously, for every kilo of NdPr that we produce, we will produce a kilo of lanthanum and two kilos of cerium, and finding a home for that material is important.
Perfect. Thanks. And then secondly, just on the PDF, you obviously outlined you're looking at a new site or potentially a new site. Just curious what's driven the change? You know, are there any additional CapEx requirements? And I guess lastly, is it feasible to permit this new location quickly enough to meet your September 3 deadline? Thanks.
... So Jack, it's a good question. I mean, we've always sought to assess a number of candidate sites, and in our discussions with government and regulatory authorities in Malaysia, we've always had more than one site for consideration. As you know, we always do things which are consistent with regulatory authority direction. And so, you know, coming up with a second site is really just a prudent risk management process for us to ensure that we have, you know, more than one opportunity where we have done, you know, sort of the detailed work on site characterization and other studies. We are working very closely with both the government and also the regulatory authorities on this process.
So, you know, I think I've also said many times that I see that there's very little value from blow-by-blow description on approvals and regulatory relationships. I would simply say that we're confident that we are working in a very productive way with the relevant authorities. With respect to cost, we have a turnkey solution that we've agreed with the contractor, which has been nominated by the Pahang State Government as the operator of these facilities in the state of Pahang.
Okay, perfect. Thank you. So you have no need to extend the deadline, it's fair to say, at this point?
At this point, we're working with the authorities to understand exactly what needs to be done, and also within the constraints of, you know, very restrictive movement control orders in Malaysia, including, you know, sort of across state borders and even into district at times. But we will, of course, you know, disclose if there's any change to the current situation.
Perfect, thanks. And then just very last one from me. Very good to see your heavy submissions progressing. Just, I'm curious whether there's any evidence that we're closer to a magnet maker solution in the U.S. and whether you're considering a role in that process?
Ah, well, I think that the level of sophistication of understanding of you know the importance of the whole of the rare earth supply chain, including the downstream ecosystem, is really picking up both in the U.S. and also in Europe. You know, we've always been confident that particularly in the U.S., that there will be those who are prepared to step in and take up that part of the value chain. You know, we have very large and loyal customers, and we would, you know, any change to where we participate in the value chain would be done very carefully and with significant consultation with our customers.
Perfect. Thanks, Amanda. I'll pass it on.
Thanks, Jack.
We've got another question from the line of Daniel Morgan. So please ask your question, Daniel.
Hi, Amanda and team. Just wanted to know, given the strong financial results, good cash flow, and the, you know, the very strong and strengthening balance sheet, is there the potential for a maiden dividend to be considered?
I'm always thinking about maiden dividends, Daniel. It would be, you know, certainly we see that this is an important part of meeting our shareholder needs. You would recall that we have certain constraints that, you know, were agreed to historically with respect to the payment of dividends, associated with our senior secured lender. We will need to resolve those. And we also, you know, the more important thing is that we need to make choices or need to make assessments on how best to serve our shareholders' interest. Is it with the dividends or is it with, you know, sort of continuing investment in various areas of the business? But we are considering it, what would be required for us to be able to do that.
But, at this stage, certainly, I, I'm not announcing any change to our policy today.
Okay, thank you. We've been hearing about a lot of cost inflation in the mining industry, particularly in WA, as it pertains to labor and the impact of borders. Just wondering how you're managing this risk on the Kalgoorlie project? You know, I know there isn't and hasn't been an update of the capital cost envelope of about AUD 500 million.
Yes, there hasn't been an update. And as you know, Daniel, we always disclose if there is anything material to disclose, and so therefore you can assume that we're not seeing that number has changed. We have a number of different strategies to address, you know, potential cost inflation. And we're seeing those actually work, you know, currently, and we're not seeing that we need to put additional risk mitigants in place just now. So, you know, we are working. We've actually identified this in the report, you know, we've released a lot of our packages of work. You know, almost all of our major equipment has been ordered.
You know, certainly all, sorry, all of the long lead time equipment and more than half of our total equipment required. In addition to that, some of our major contracts relating to things like earthworks and civil works have also been completed. So, you know, we're seeing ourselves in a strong position working with, as we've identified right from the beginning, you know, sort of local and mid-sized players who tend to be working very effectively in the current environment.
Thank you. And for the heavy rare earth separation, your SEG product, I was just wondering if you could talk about the potential value uplift from separating it yourself. You know, what proportion of the value you're getting now versus what you could get separating it yourself? Just wondering if you'd talk about that, revenue uplift.
It's a substantial uplift. We don't provide detailed P&Ls by product because we are a fully integrated, you know, sort of process. And so, we won't be providing, you know, sort of a detailed P&L for the heavies. Internally, however, the way that we have done this is that we have looked at the difference between, you know, the margin as you're implying, Daniel, the margin on SEG versus the margin that we'll get on the separated materials. And, you know, we expect it to be, you know, as I said, a significant uplift, which is the reason why it makes sense for us to do it.
Okay. And, just last question before I throw it to others. You're starting the next mining campaign again. Just wondering, is there anything in the ore body that you'll be mining that's different, that might pose any challenges for recoveries or costs? Thank you.
It's a really good question. And, you know, as we move through the ore body, of course, we see changes. One of the things that we're very alert to is increasing apatite ore within the mix. But we have done the test work, and part of the additional Stack Cell that we've put in place is to ensure as we move into additional parts of the ore body, we've actually got the flow sheet adjusted in a way that means that we will be able to maintain the high recovery rates that we've got at present. But it's certainly something which we're not just assuming that as we move through the ore body, everything's gonna keep on working the same way that it does now.
Our mineralogy team is really very focused on doing all of this test work, and we think we've got some good strategies for dealing with it.
Okay. Thank you very much.
Thanks.
Your next question comes from the line of Reg Spencer. Please ask your question, Reg.
Thank you. Good morning, Amanda. Just on the outlook, is it safe to presume that we should be assuming a 70%-75% utilization rate until such time as those Malaysian COVID restrictions are loosened or lightened?
You know, I don't do guidance because it's so very difficult. We started this quarter, you know, sort of with our tails up, really thinking we'd be able to, you know, sort of switch things up. If not, you know, sort of all the way, at least, you know, we'd be able to get a bit of extra production out of the plant this quarter. And, you know, the result as it stands, I think, is just really excellent given the number of challenges that we've had. So, we'll see. It's all I can say. You know, yesterday there were 17,000 COVID cases in Malaysia. But, you know, just for Australians in particular, we're stopping and pausing and thinking about.
So we will not do anything which puts the health, in fact, the lives of our people at risk. But at present, the Malaysian team is really doing extraordinary things. The 40% headcount constraint means that there are times when we have to prioritize maintenance over production. Say, for example, because we can't have, you know, sort of, our maintenance people and contractor teams on site at the same time as our production teams and stay under that limit. Pahang has actually, you know, is in a much better position than some other parts of Malaysia, but we just remain alert and vigilant as far as this is concerned. But trust me, you know, the team is pushing as hard as we possibly can within the constraints that we have.
Understood. Yeah, I don't think anyone doubts the achievements of your team in Malaysia, given the circumstances. Just shifting tack a little bit to CapEx. How should we think about CapEx during FY 2022? Obviously, construction at Kalgoorlie is yet to commence in earnest. And I presume, well, I suppose the timeline is all dependent on getting final EPA approvals and so on and so forth. But you know, should any guidance on that front, even though you've just said that you're open for any time?
Well, look, we've just done our budget. I can tell you, this time next year, I doubt that I will be presenting a report with nearly AUD 700 million in cash at bank, because we will have spent an awful lot of that. I know a few of you wonder why we're not spending faster. It's not because the work is going slowly. It's because we are quite good at managing the way that we spend, and I don't see any good reason to spend early and often, you know. I mean, the team negotiates good arrangements, you know, good commercial arrangements with our suppliers, which meet their needs so that they're, you know, sort of keen to supply to us, but at the same time meet our needs.
But we would expect that the substantial portion of the two, the two biggest projects, which is the Lynas Kalgoorlie and the PDF activities in Malaysia, that a substantial portion of each of those projects will be funded in the 2022 year.
Understood. Thanks, Amanda. I'll pass it on.
Your next question comes from the line of Trent Allen. So please ask your question, Trent.
Oh, hi, guys. Congratulations on a great result. Now, my question is just about the PDF again. I don't know if you can comment, but there was an article appeared in Malaysia on the weekend, saying that the second location that you mentioned is on an empty lot right next to the LAMP, back in the industrial estate. So, my first question is, is that article accurate? I don't know if you've seen it. It was on the Malaysiakini website. And secondly, it seems like a logical place to put the PDF. Why wasn't that the first choice, anyway, just across the fence instead of some distance away? Thank you.
Excellent questions, Trent. And you would be no doubt not surprised to know that yes, we have seen what Malaysiakini has printed. Malaysiakini has a particular profile within Malaysia. In terms of why wasn't this on the list, I think that those who've covered us or followed us for some time will recall that even all the way back in, I think it was 2015, the International Atomic Energy Agency you know sort of recommended that we should be investigating you know on-site options.
As I said earlier, we've always had more than one option that we've presented to government and regulators, but ultimately, you know, sort of what goes on the list for full investigation sits with the government in the first instance, the Pahang State Government, to identify that it fits with their plan for management of residues that we thought, and also that it is actually government land ultimately, which is used for this facility.
So, you know, without going into chapter and verse, to and fro, and all of those sorts of things, as I said, we've identified, you know, sort of up to half a dozen different places that we think would be suitable, and we just work through those on a, you know, with government regulators and, you know, ensure that we do the work that they require us to do, to, you know, sort of prove that those sites would be appropriate for, you know, for use for this activity. Yeah.
Yeah, sure.
Was there a second one?
Oh, so you've seen the article. It seems to have some quite detailed images and such in it. Can you comment on its accuracy, or is that not something you can talk about?
Look, I think what we're saying here is that we've identified the site. We're working with government and also with the regulators on those various studies that need to be complete and change, you know, you know, sort of how much that is. It's radiation management plans, and it's an environmental impact assessment, and it's, you know, sort of we have to do soil testing and a whole variety of different things. The excellent thing is that we have eight years of data for the material which is stored in the temporary facilities at the LAMP. And so that facilitates, you know, sort of really our ability to be very, very sure about what the effect of storing there is.
With respect to whether Malaysiakini gets things right or wrong, I'm not really going to comment on them.
Yeah, sure. Well, I hope that is the new site, and it's approved. It would be a lot easier, you would think, just to push things across the fence rather than truck them out to Bukit Ketam.
Sure. As a greenie, the idea of not having trucks going down, you know, I mean, we were looking at things like, would we be able to get electric trucks and those sorts of things, but still, not having trucks trundle down the highway would definitely meet my aspirations.
Okay, thank you.
Your next question just comes from the line of Dylan Kelly. So please ask your question, Dylan.
Morning, Amanda. Pretty much all my questions have been answered. I've just got one final one. I wanted to clarify the impact to the workforce in Malaysia based on all this, the current lockdown situation. You mentioned in the release that you're limiting the workforce to what? 40% of what it's supposed to be. Is that... I noticed that that latest movement order started on the first of June. Could you just clarify if that, like, how that's changed relative to the past and what portion of the workforce you used to be able to have in?
Oh, it's much tighter. We operated for some time at 60%, and there is a variation between daytime, a number allowed during the day versus on night shift. Of course, we have significant of our administrative staff on site in Kuantan. They're all working from home. And we just schedule very carefully, as I said, the other activity, because, you know, I don't want everybody here thinking, "Oh, gosh, we can produce at this rate with 40% of our headcount. Gee, we must have been, you know, sort of slacking off when we had 100%." That's not the case. I mean, what we do is we're very selective, and we do have to make choices some days between maintenance and production staff.
Our people have been, you know, sort of flexible and responsive to that. In some instances, the movement control order has extended beyond, you know, sort of state prohibits state border crossings, which means some of our people who are the kind, you know, sort of call them weekend spouses in Malaysia. So some of our people are not able to get home to see their families, but there's also even been some inter-district. So these are the EMCOs, the Enhanced Movement Control Orders, which prohibit inter-district travel. We've taken, you know, virtually the whole hotel in the local Balok village, and house our people there as required.
It means that we can ensure that we're providing, a hygienic environment, that we're able to implement, you know, sort of hygiene practices there, that keep our people safe, while at the same time complying with not having our people moving across districts. So, you know, that's sort of really... It's a real time management task. You know, we have, you know, sort of morning calls where we look at what's happened, what's happened in terms of any variation to standard operating procedures, and we ensure that we meet those absolutely. As indicated in the report, we are participating in the process, the public, private vaccination process. I can tell you that last week we had the first week of this in operation.
We've had about 60% of our staff have had their first vaccine, and we had a 99% turnout, with the only ones who didn't turn up being those who'd already accessed the vaccine via other government means. So, you know, our people are limited. Our people are very alert. There have been times where people have, you know, one or other of our people have acquired a, you know, COVID outside of the workplace. And because, you know, a lot of our people live near each other, are friends or otherwise, you know, I think at its, the worst, we had 32 of our people that we actually had involuntary, you know, sort of isolation because we contact traced ourselves through our own process.
So they stayed at home until they were clear. So, it's just a very active and daily management, but we do have to make choices.
... Okay, fair enough. Just turning slightly to water supply. I mean, that's been a problem in the past.
Yeah.
You had several programs to mitigate that in the future.
Yeah.
Any chance of disruption going on from here?
Oh, look, you know, last time it was such a big issue, you know, we put in an additional storage pond. We've had, you know, we've also set up a process where we can extract water from the nearby, disused bauxite pit. We've now also reactivated some of our water treatment processing plant, so that it will allow us to treat some of that water for greater usage. But certainly one of the things that we're looking at as we continue to assess ways to improve our flow sheet, is how to reduce water requirements, you know, with increased recycling, and a number of other initiatives that we will announce as we prove them, you know, sort of at bench and plant scale.
It's, you know, really disappointing that, you know, we've managed to get sort of quite an extended period of time where supply was, you know, pretty much on the ball. But once again, you know, there's been equipment failures in the water, you know, in the public water processing system, which has resulted in this. And of course, it's harder for those equipment failures to be addressed with some of the movement control restrictions. But we're not sitting-
Okay, cool.
You know, we're not sitting just waiting to be buffeted, you know, backwards and forwards on this. It is part of our weekly report, is really our water initiatives. And, these are good initiatives and applicable in every site that we have. You know, I mean, in Australia, we also have water supply challenges because, you know, we're operating on a dry continent. So, finding better flow sheets that see us recycling more water is good. It's good in an environmental sense, and it's good in a business sense.
Understood. Thanks for clarifying, Amanda.
Okay. Now, I've received a call from David Deckelbaum from the U.S. on the webcast asking how does this design to refine carbonate at Kalgoorlie impact views on operating expenses or margins versus the initial flow sheet? Well, it improves it. Here's the reason, you know, as we noted in our release last week, our objective with this new circuit is actually to improve the quality of the carbonate. Any time that we improve purity, it's always better. So, you know, sort of always focusing upstream on producing the best possible feedstock for the next downstream process is really important. I think most people are alert to the fact that we are moving a significant part of our operations from a low-cost jurisdiction to a higher cost jurisdiction.
We are very focused on ensuring that we find compensating savings to compensate for those areas where we will not be able to avoid higher costs. For example, Australians get paid a lot more than Malaysians. And notwithstanding our conversation we've just had on water, water is more expensive in Australia than it is in Malaysia. So we are looking for ways to really compensate some of those costs. And certainly the carbonate, the new carbonate refining circuit, does give us some benefits there in terms of production of chemicals, but it's primarily a quality task.
Okay, just from the telephones, I might give one final reminder. If you'd like to ask a question, it's just by pressing star one. But we do have another telephone question, Amanda. I will next go to Michael Evans. So please ask your question, Michael.
Oh, good day, Amanda, and, congratulations on a good quarter in what's clearly challenging conditions. Most of my questions have been answered. I wasn't sure I was still on the queue, but that's, that's great. I mean, I, I was curious on how you're thinking about the full capacity of Lynas Next, and making assumptions around, you know, how long the, the pandemic lasts. But I, I certainly don't wanna labor that point. But clearly it's not an issue of demand. With prices where they are, demand's very strong and, you can sell a lot more NdPr if you can produce it safely, I expect. I, I suppose, leading on from that, you made a comment in the, in the quarterly that, that some of the price rises in the first quarter were, speculative, I think you used the word.
Can you make any comment on the prices at the moment? I mean, I can't figure them out. They go up, they go down, now they're going up, look like they're going up, look like they're going up again. I mean, can you give us some insights from your customers on?
Uh, yeah
on the sort of the price dynamics?
Yeah. So, I was going to say something about your comments on volume, but now it's just, it just escaped me, unfortunately. But, we are very focused on doing whatever we can to, to increase volume throughput, because the market is strong, demand is strong. The use of the word speculative is probably not that important other than the fact that, you know, and you've followed this for long enough to know that, you know, this is a market where there can be speculation, being a relatively small market, and that can at times, you know, sort of influence the prices. But on the other hand, I would say that, you know, what we're seeing is a really sustained increase in demand.
This is generally a time when we see a bit of a dip in, you know... There's no good reason for seasonality, but there is a bit of seasonality. And we're not seeing any of that this year at all. In fact, demand is remaining, you know, really strong, if not increasing. So, yeah, we see the market, you know, the market pricing. At times when you get sort of a sharp spike, you think, "Oh, someone's, you know, sort of having a bit of a punt." But generally, this sort of sustained increase in price does reflect a really sustained increase in demand. And so, you know, whilst I know all of you and all of our shareholders would like us to produce more, our focus is really on making sure that we can meet our customer needs as well.
You know, our customers are growing, and we need to be growing with them.
Hmm. No, that's helpful. I suppose while I've got you on the topic, the word commodity is not one you like, I know that.
I hate it.
I mean, on that note, we've talked about it before for many years, but well, can you comment on here we are with these great prices, $60+. I know you've been through a lot longer periods of much lower prices. You know, if your customers, your OEMs, et cetera, are they getting serious about locking in some prices now that they're getting serious about EVs and, you know, getting more confident on the outlook in that market? Can you lock in a meaningful proportion of your NdPr output? And where are those discussions at? Or I wouldn't want to say ask you that you've given up on them.
I mean, that's something you'd never give up on, but, you know, to get some fixed pricing, totally change the dynamics of your sales profile going forward, right?
Sure. And once again, you know, there's a bit of a balance. I mean, how much do we, how much do we fix and at what price can we fix it? And we go back to the idea that we really like to have a bit of a portfolio of prices, so we get, you know, exposure to the upside, which of course brings exposure to downside as well, on some of what we do. Right now, we don't have a lot of spare NdPr to be, to be acquiring new, contracts. You know, the Japanese market is very, robust.
So, you know, we, we have executed a couple of fixed price contracts in the last six months, but it's not going to substantially move the dial until we are able to increase our output, which will allow us to pick up a couple of additional customers in those types of contracts that you're talking about.
Okay. That's helpful. Thank you. I'll leave it at that.
Thanks, Amanda.
Thanks, Michael.
We did have a final question now from Jay Erlandson. Please ask your question, Jay.
Hi, Amanda. It's Jay from Colorado.
Hey, Jay. How are you?
Oh, I'm doing very well. I'm just heading back into civilization. And, I had a question. I read an article before I left at the Pentagon for U.S.'s, that's the U.S. Military Authority. But the Pentagon said that Lynas would be commanding about 25% of the world's output of REO, REOs when the projects are completed. Can you comment if that's true? And, it sounds like a pretty good, pretty good number.
Well, our objective, Jay, is to, you know, at least add an extra 50% over and above the Lynas mix rates by 2025. But as we're looking at the market demand accelerating even faster than when we set that target a couple of years ago, we are looking at every option that we can to increase production. The 25% is just a function, you know, of how fast the market grows, and, you know, whether we can grow as fast as the market is growing. But we certainly think that we need to be in that sort of range, you know, to be a meaningful player in the global market.
Cool. Well, that sounds great. Great job. A really good quarter.
Thanks, Jay.
With that, there's no, no further telephone questions. So for now, I'll hand back to Lynas Rare Earths.
Okay. Well, look, once again, thank you everybody for joining today. It really was a pleasure to be able to present such an excellent quarter. And, I look forward to engaging with you all again, when we release our annual results in about a month's time.
Ladies and gentlemen, that does conclude today's conference call. Once again, thank you all for participating today. You may now all disconnect. Thank you.