Good morning, everybody. Thank you for coming to our AGM. I'm Kathleen Conlon, and I'm the Chairman of the Lynas board. I'm pleased to welcome you to the annual general meeting of the company. This is my first AGM as your Chairman, and it's also the first time that we've had so many shareholders joining us virtually during the pandemic. We're very happy to also be able to have shareholders in the room, and I see a lot of loyal, long-standing shareholders here, so welcome here as well. Ladies and gentlemen, today's AGM is being filmed, and it's being live-streamed via the Internet. Details are available on the Lynas website. When we come to the Q&A sections of the AGM, we will take questions from both online shareholders and shareholders in the room today. I would like to introduce my fellow directors.
Joining me in the room today are our Chief Executive Officer, who you all obviously know, Amanda Lacaze, and Non-Executive Director, Philippe Etienne. Due to COVID-19 travel restrictions, Non-Executive Directors, John Humphrey, Grant Murdoch, and Vanessa Guthrie, are participating online. So there's Grant and Vanessa, and John will be joining in a minute. Also participating online are Andrew Arnold, Lynas General Counsel and Company Secretary, and Gavin Buckingham, Partner, and Sarang Lal, Director from our audit firm, Ernst & Young. I understand that all shareholders present have registered with our share registry BoardRoom before the meeting. The Notice of Meeting was dispatched to shareholders on the 15th of October, 2020, and accordingly, this meeting is deemed to have been properly convened.
We have a quorum of more than two shareholders, and accordingly, this meeting is able to transact the formal business as set out in the notice of the meeting. Before we proceed with the formal business of the meeting, I will deliver a short address, after which Amanda Lacaze will deliver a presentation. We will then table the FY 2020 financial statements. At that point, we will pause for any questions on Amanda's presentation and the financial statements. After questions, we will continue with the formal business of the meeting. So, I joined the board back in November 2011, and at that time, Lynas had commissioned the Mount Weld Concentration Plant, but we were yet to start commercial operations in Malaysia. We faced many challenges, including issues with our Malaysian plant's startup and high debt. But even back then, I was convinced that Lynas was a winning idea.
It's clear that a secure and sustainable rare earth producer like Lynas would become a major player in the international rare earth industry. And for many of our shareholders here who were part of the journey at that point, the vision seemed very far away back in 2011. But nine years later, Lynas is a successful rare earth producer. We hold a special competitive position in the global rare earth market, and we are in a great position to grow. I'm incredibly proud of the Lynas management team, who've worked so hard to overcome the challenges and make this a reality. And we've built resilience into this business, and I think that's really been evident in how well the company has come through the COVID-19 pandemic this year.
Having spent a number of years focused on cost management, we're now focused on growth, and that's a really exciting position to be in. As you know, the rare earth market is strategically important, as many everyday items, from cars to mobile phones, are dependent on rare earths. Rare earths are also critical inputs to green technology, such as electric vehicles and wind turbines, which are essential technologies for low-carbon economies. Over the past two years, governments and major industrial economies around the world have taken an active interest in securing their supply of rare earths, and this focus on achieving a resilient supply chain has been further reinforced by the COVID-19 pandemic. As the only significant producer of separated rare earths outside of China, Lynas has an important and strategic role in helping build the rare earth supply chain resilience.
The Lynas 2025 growth vision will see our company expand our global footprint, invest in growth opportunities, and ensure that we continue to be a supplier of choice for our customers. We have a strong balance sheet to support our growth, and this was enhanced in September this year through our AUD 425 million capital raising to fund the Lynas 2025 foundation projects. As a board, we're always reviewing the composition of the board to ensure it meets the needs and growth objectives of this business. Following the retirement of our former chairman, Mike Harding, in September, we took the opportunity to renew our board, and we were delighted to welcome Dr. Vanessa Guthrie as a director.
Vanessa brings deep operational and major projects experience in the resource industry in Western Australia, and this will be particularly valuable as we continue our business transformation and expansion in Western Australia over the next five years. Vanessa is looking forward to speaking with you all later this morning. I would also like to take this opportunity to extend thanks to the Board of Management, to Mike Harding, for his commitment to our company over a critical five years as we undertook a corporate turnaround and established our growth vision. I would like to thank our people in Malaysia and Western Australia for their tremendous commitment to our company and their resilience that they also have shown during the year. And to you, to our shareholders, thank you for believing in Lynas and supporting our company through the year.
We went through a lot to get where we are today, but we never lost sight of the objective of being an ethical and sustainable producer of rare earths material. Our success is not just important for our people, our customers, and our communities. As a strategic supplier of rare earths, our success also matters to governments and manufacturing supply chains around the world. So I would like to invite Amanda to address the meeting.
Good morning, everybody. I too am delighted to speak to you, and I would like to really welcome both those of you who are here in the room and those of you who are joining us remotely. Now, I was going to say, because I stopped to talk to people, I didn't do my technical rehearsal. So I was standing here looking for this, but now I have found it. We're good. I am actually very disappointed that the continuing challenges presented by COVID-19 means we're running this AGM in a new format. I always look forward to our AGMs as an opportunity to engage directly with our shareholders, you. And after six years in this role, as an opportunity to catch up on the year you and your families have had.
In fact, our friend Dylan, who's one of the analysts who covers the company, he's added a new baby this year, and that was, I also spent more time looking at baby photos than looking for my technical aide. And really reflecting on how I have got to know many of you, our shareholders, both individual and institutional, on a personal level, reminds me of some of the differences in our company compared to others. At Lynas, our whole team shares strong values and a determination to succeed and grow. This year, we codified the values on which we have built our business. You may have noted this slide in some of our recent presentations. In 2020, our absolute core value of care has been more important than ever.
It's been evidenced in our adoption of new health and hygiene practices to protect our people, and it has been evidenced in our continuing contribution to our local communities and service providers, particularly in Malaysia. We truly value the quality of our relationships with our stakeholders, all of our stakeholders, and of course, importantly, with you, our shareholders. As I reflect on our year past and some of our plans for the future, I trust you will recognize these values and their contribution to our results. However, before doing that, I would like to speak specifically to the value of diversity in our business. It is a key enabler of our success.
Lynas, unlike many of our ASX peers, is a truly global company. Our value starts under the ground in Western Australia. Our key value-adding process is in Malaysia, and the customers we serve are all over the world. We are one of only a very few Australian companies whose sales are 100% outside of Australia. In this global community, we are fully committed to embracing diversity in all parts of our company. We are ethnically diverse. We have 10 nationalities represented in just the first two layers of our management team. That ensures that at our management meetings, there is always diversity of perspective, and occasionally, I do have to explain to some of our team, Australian idioms, and they seem to quite enjoy it. You know, imagine describing how to have a you-know-what in a brewery. Not necessarily something that is part of their normal language.
We have further ethnic diversity, even within those nationalities, of course, because we have, at a minimum, in Malaysia, we have Malays, Chinese, and Indians. But as you would probably guess, I am particularly focused on gender diversity across our operations, and we are not where I want to be. We employ more than double the number of women in our business now as we did when I joined, and they are working in operational areas, not in administrative and support areas. But we want to continue to improve our gender diversity, and I want to share with you a video that some of our women made, because I think it is important that we show to young women in particular, that working at Lynas is challenging and fun.
One of the major selling points for Lynas is, as a medium-sized business, you're not a number. You have the opportunity to make a difference.
Basically, it's challenges. To me, taking up a challenge is one of the quicker ways for self-development.
In Lynas, we are always given a chance to talk in the community, to talk in crowd. So indirectly, it develop our soft skill, our communication skill, and also confidence level.
I certainly love it. Every time I have to take an outsider around the plant, I'm able to show them what I do, how unique this place is, and that I'm a part of that.
When I became full-time Lynas employee, it gave me the sense of belonging.
Don't be afraid to make mistakes. It's the best way to learn. If you ever have the chance to work in the mining industry, just give it a good shot, and I'm sure you won't look back.
Grab the challenge. You will never know the how you will try if you try it yourself.
Just to give you some perspective, Marie, who is the first there, is our head of HR here in Australia. Then, of course, you saw with two of our girls who work in our metallurgical unit at Mount Weld. Wei Ming, who is our senior accountant, you know, 2 IC, effectively, to our CFO. And at the end, Katina, who is leading all of our procurement activities associated with our new Kalgoorlie plant. I mean, so these are women who are in... Oh, and we also had Siti Elena, who was head of safety in Kuantan. So, you know, we want to offer women in our company opportunities to do real work and work which makes a difference.
It is increasingly important in the 21st century that we are seen as an employer of choice, and as we continue to grow and innovate in our business, ensuring diversity in all areas, including gender diversity, is really important. One of the primary purposes of an AGM is to reflect on the year that was, and of course, we have all heard ad nauseam that 2020 has been an extraordinary year. Of course, I think when the Macquarie Dictionary comes up with the word of the year, it will be unprecedented, and closely followed by people being super excited. But as I prepared this speech, some of the challenges we faced at the beginning of the 2020 financial year seemed very distant.
These challenges included ensuring the renewal of our operating license in Malaysia, finalizing our Lynas NEXT initiatives, and commencing our Lynas 2025 growth projects. And then, of course, later in the year, we faced the challenges presented by the COVID-19 pandemic. As with the many challenges we have faced through my time with the company, we, as a team, met these challenges by focusing on the things that matter most: caring for our people and communities, honoring best practice sustainability principles in all our activities, and ensuring that we comply with relevant regulations at all times. And I am proud to reflect on a year with many operational highlights. We have continued to improve our safety outcomes and implemented protocols which have protected our people and communities during the pandemic. We are committed to further developing our reputation as a source of responsible rare earths.
This includes honoring our commitments as a signatory to the UN Global Compact and embracing new technologies to improve the way in which we use and process our precious resource. In fiscal year 2020, we succeeded in having our Malaysian operating license renewed, not once, but twice. Then the current license is a three-year license to March 2023. And maybe most exciting of all, with our foundations well-established, we have made significant progress on our next growth phase. Unfortunately, our financial performance was less pleasing. The benchmark prices for our products remained low throughout the year. Despite that, we recorded positive cash flow from operations. But really, it was a year which was a story of four quarters. In the quarters where we had no constraints, external constraints on production, we were pleased with our performance.
However, in the second quarter, we were required to shut down when we reached our approved processing limit in Malaysia. The much more significant effect, of course, came in the fourth quarter, when we were required to shut down for 44 days in compliance with the Movement Control Order in Malaysia, implemented to deal with the first wave of COVID-19. And of course, as a fully integrated business, this had ramifications for both sides, and we also ceased production at the Mount Weld concentrator during the fourth quarter. During the shutdown, we took actions to protect our people and customers, both during the shutdown and after we recommenced operations. We implemented new health and hygiene protocols quickly. We have conducted extensive and continued to conduct testing of our people for COVID-19.
We implemented a COVID-19 leave policy long before it was being talked about, you know, sort of in the press generally. Importantly, and I think this is a reflection of our values as a company, we did not stand down any of our employees, and we maintained close contact with them whilst they were absent from site. We gave them tasks to do at home, so that they remained engaged with the business, which meant that we were going to be able to restart operations in good order, and we have. We've maintained contact with our customers throughout and ensured we were all well prepared to commence supply once the Movement Control Order was lifted. We've already advised the market that we are now operating by choice at 75% of Lynas NEXT rates.
This is equivalent to the original nameplate capacity for our facilities. So therefore, we are able to capture cost efficiencies as foreseen in the original design and throughput efficiencies delivered by Lynas NEXT. So we use, you know, 75% of our assets, yet we are able to produce at, you know, original nameplate rates. At this rate, we are able to maintain supply to our key strategic customers whilst retaining flexibility to increase our production as demand grows. So despite the uncertainty introduced by the global pandemic, underlying growth drivers for our business remain unchanged, and we are pleased that demand does appear to be returning to pre-COVID levels. In particular, the demand from our Japanese customers is strong. Our demand is also strong inside China. This is driven by, of course, electrification of vehicles.
As we look at the automotive segment, you know, the segments, hybrid and electrified, and electric vehicles continue to grow, but also wind turbines, as a segment, are growing strongly and, particularly inside China, there have been new regulations related to household appliances, for example, your air conditioners and otherwise, which sees, more use of the materials that we produce. Of course, demand does vary by segment, and so we see strong demand for magnetic materials with actually very positive pricing trends. Demand for our other materials, primarily our catalytic materials, remains subdued, driven by lower sales of internal combustion engine vehicles and lower demand for fuels in all forms of transport. But looking forward, global mega trends have the potential to create some very positive outcomes for Lynas, including a new awareness of the importance of supply chain resilience.
You would be aware that the rare earth supply chain has come to the attention of governments around the world. The pandemic has sharpened this attention as it has shown that unforeseen events can quickly disrupt well-established supply chains. In addition, governments are facing a really strong imperative right now, a super imperative even, to generate new economic activity. Rare earths, which are essential to future-facing industries, will help to underpin economic growth. This is one of the reasons why the Australian government, with their Modern Manufacturing Initiative, with their AUD 1.5 billion funds, has identified critical minerals and rare earths as one of the target areas. The media often reports these matters as if it will result in winners and losers based on geopolitical alignment. We take a slightly different view.
We see a growing and dynamic market where customers will need diverse sourcing strategies to meet their increased demand, and we believe there will be enough growth around to support shared prosperity, and that's actually very exciting for our business. I am ambitious for Lynas. I mean, like, I am really ambitious for Lynas. We have created a business today with solid foundations, and we know how to operate our assets. We have strong relationships with existing customers, and we're developing new relationships with new customers. We have the technical IP to progress operating enhancements, new product development, and development of new applications, and we now have the balance sheet to support our ambitious growth plans. I am really ambitious for Lynas. What I see in our future is so much more even than what we are today.
And we are capable, as a team, of giving full voice to our ambitions. So many of you would have participated in our recent equity raise. In my sort of eight months now of being stuck behind a computer, Zooming, it was maybe the most exciting weekend of the year. It sort of started at about 6:00 P.M. on the Friday evening, and, you know, it was long days because we had many people all over the world. But boy, it was exciting that we have such a high degree of interest and support for our business.
That equity raise has meant that we've secured funding for our foundation, Kalgoorlie Rare Earth Processing Facility, and it provides us with the flexibility to use our cash flow to fund other key projects, like the Malaysian Permanent Disposal Facility, and it also supports our ability to capture other growth opportunities. Now, I know you have seen this map before, but we changed some of the language a little, which I hope will help people to really sort of think about our business. We are creating a company with leading competence in both upstream and downstream processing. We are investing in more processing capability in Western Australia, and that's not just about meeting our Malaysian license conditions. It makes perfectly good sense to perform early processing close to our resource at Mount Weld.
Our downstream facilities will be located close to customers, providing assured supply and supporting the development of downstream ecosystems and encouraging shared technical development. At Mount Weld, our ore body underpins our ability to grow, and we are investing and will continue to invest in our operations at Mount Weld to ensure we optimize the use of this precious resource. As we move further into the ore body, we are accessing areas which are richer with terbium and dysprosium, and we are carefully blending these to optimize our SEG heavy rare earths blend. We are introducing new steps in our flow sheet to improve concentrate quality, which feeds to improved performance in our Kuantan facility. Our focus on safety and environment continues with external certification renewed this year.
But maybe most excitingly, particularly for our geos, is the fact that we are committed to improving our understanding of the ore body with continued exploration. So today we have released a report on some exploration results from the fresh carbonatite below our current life of mine pit. So just in my plain language, because, of course, ultimately the report had to be written by our geologists. At present, you know, it's a collapsed volcano core, goes like this, and we have explored and have included in our resource and reserve statement, the resources and reserves sort of along there and there. And this, for the first time, we've actually sunk bores below that floor level, right? To see what the geology looks like there. And remembering it's a collapsed volcano core, we expect that it will change as we go deeper.
So we sunk these bores primarily looking for more water for us to be able to use in our processing, but we extended them deeper. So both have actually yielded water of sufficient quality to augment our current process water supply, so that's a very good thing. But this is the first time we have drilled to the depths that we've drilled, and we think the results are very promising. They show significant and continuous intersections of rare earth minerals. As Kam, who runs upstream, says, "You know, we might have gone there and found there was nothing," right? But actually, what we're seeing is, as I said, significant and continuous intersections of rare earth minerals, both light and heavies.
The mineralization remains open at depth, and while the grade is lower than in the weathered zone that we have been mining to date, the grain size is significantly coarser. I must caution you, these are very early findings, but we are completely committed to exploring below the current mineral resource to properly understand the potential for primary rare earths mineralization below the weathered zone. Of course, one of the most exciting developments in our business is our Kalgoorlie project, and we have many highlights to report. We are delighted with the support we've received from the City of Kalgoorlie-Boulder Council and the state and federal governments. Approvals will be regulated by state law after we've received the decision under the Federal EPBC Act that the project is not a controlled action.
Our project team has been able to work really productively throughout the pandemic, and I can tell you they are super excited. They are very excited with the project, as they are able, and the people who are running this project are the people who've run our cracking and leaching facility in Malaysia, and they're able to design a new and improved facility using the learnings from Lynas Malaysia. The team works across both of our sites, and we're working with local partners in both Western Australia and Malaysia. The team has completed the high-level design and currently completing detailed engineering, design, and procurement. We expect to commence production in mid-2021, and I'm greatly hopeful that I will be able to travel to Western Australia by then. I am particularly looking forward to the arrival of the rotary kiln.
Kam assures me it will be really spectacular as the five different parts are lifted into place on site. Just to bring a little bit more life in, here is a drawing of the new facility. For those of you who've visited our Malaysian plant, you'll see there are some significant differences. In fact, this has changed from where, if those at home are reading the speech, the kiln is the green, the single kiln at the back, which is different from the four that we have in Malaysia. One of the other things which maybe is not as clear on this is that it's engineered to be very close and, in fact, some of it underground, which minimizes the amount we have to spend on civil works, you know, concrete and steel.
So, very exciting. Kalgoorlie is a very exciting project for all of us, and particularly for the team engaged in executing. As part of Lynas NEXT, we expanded our product range, and this is delivering sustained additional value. Price outcomes for separated Nd and Pr are positive, with Nd now realizing a premium of about $2-$3 a kilo over NdPr. For those of you who've been following us diligently for some time, about 3 years ago, Pr delivered a premium over NdPr. Now, that's switched around, and this really underpins our determination to be a really strong rare earths company, not just an NdPr company. Because, you know, today, cerium and lanthanum don't fetch high prices, but 15 years ago, they were the king and Nd was a by-product.
So ensuring that we use all of the elements in our materials is really important to building value over time. The investment in lanthanum and cerium separation is supporting improved quality and therefore improved selling price. We're capturing the benefits of improved recoveries in cracking and leaching, in particular, and commencing work on further flow sheet development to drive a significant further improvement in costs. You know, our cost performance is the muscle in our business, and we need to stay match fit as far as that's concerned. We are progressing on our planning for our proposed facility in the U.S., the development of the heavy rare earth separation plant, and the ability to value add to our lanthanum and cerium products is commercially attractive.
We can capture additional margin by separating our own material, our own feedstock, which we currently sell in the form of SEG to a separator in China. The market is strong and attractive, and we expect that demand and price for these elements will continue to grow as demand for high-power electric motors grows. The development of value-added rare earths compounds offers a further opportunity to capture additional margin. The heavy rare earths process design is well progressed, and we've benchmarked it against best-in-class heavy rare earth separation. Of course, we announced earlier this year that we were selected and have signed a Phase 1 contract with the U.S. DOD. Progressing this project with U.S. government funding provides an excellent opportunity for value growth for all stakeholders in Lynas.
We are guided in everything we do by our vision to lead the market with responsible rare earths. This means considering all of our actions through a sustainability lens, including embracing new technologies to reduce our environmental footprint, working with our customers to scope opportunities to improve lifecycle costs, and using external assessment and verification processes to assure our approach. Last year, I spoke about our unique competitive advantages in this business: the Mount Weld ore body, our first mover advantage and market position, our technical IP and proven processing capacity, and our resilient culture. 2020 has been challenging on many fronts, and I don't think there's any of us here today who would have forecast when we were here last year, what we've had to face this year.
Despite these challenges, I am really proud to present the results of the hard work and application of the whole Lynas team as we continue to meet the growth objectives we have set for our business.
Thank you, Amanda. We will now move to questions. I will table the financial statements of the company for the year ending 30 June 2020, consisting of the annual financial report, the directors' report, and the auditors' report. The annual report was dispatched with the Notice of Meeting to those shareholders who requested a hard copy, and an electronic copy was sent by mail to shareholders with an email address and made available on the ASX website and the company website. We would now like to ask for questions on Amanda's presentation and the financial statements. A reminder that only shareholders, proxy holders, and authorized representatives can ask questions. Shareholders, when asking a question online, please enter your SRN HIN information at the start of your question so you can be identified as a shareholder. Your SRN HIN will be located on a recent share statement.
Proxy holders, please state your name and that you're a proxy holder. If a shareholder would like to ask a question via the webcast, please click Ask a Question button at the top right-hand corner. Once you've asked your question, click the Slide button to return to the webcast slides. If a shareholder would like to ask a question from inside the room, please raise your hand so we can bring the microphone to you. So with that, I'll open it up to questions. So we've got a couple in the room.
Are we going?
Yes.
Graham's, Graham's my name. I'm a shareholder. What I'd like to know is, why doesn't Lynas start processing heavy rare earth in Malaysia, which are critical for, military-grade weapons, which China is, as far as I know, the only country that produces the two heavy rare earths?
Amanda?
Why don't we do it in Malaysia? Frankly, because I figure that a lot of you would probably look at me somewhat askance if we decided to put some significant more capital on the ground there until we have fully resolved all of our operating license issues. So that is the primary reason. We will separate our own heavies. Right now, there is value in doing that with the support of the U.S. government. But we will do this. We have assessed a number of different sites to build and operate that plant, and at this time, we've made the assessment that actually Texas is an excellent location for us to put that facility.
We have a question from one of our online attendees, from Philip Moyes. We have: When do you think Lynas will pay a dividend?
So as a board, we obviously take capital management very seriously. And we are looking at the best uses of our capital, and as Amanda said, we have significant growth opportunities, which we think will really deliver shareholder value. So right now, that's the focus of our capital management program.
My name's Bob Richardson. Amanda, it seems a long time since the two tenders were put forward in the United States for Light Rare Earths and Heavy Rare Earths. Noting a recent U.S. government award of money to Mountain Pass, who sends all of their product to China for processing, when are we going to hear a bit more about those tenders?
The heavy rare earths tender has a timeline associated with it and a number of milestones against which we need to provide deliverables, and we are meeting that timeline. In other circumstances, we would probably be pressing to accelerate that timeline, but it is very difficult in the pandemic for us to, well, frankly, I will tell this, I will say this straight up: I would not send any of our people to Texas right now, and we will not build a facility without some of our own engineers there to supervise and run that project. So that is an issue for us. With respect to the light rare earths tender, we have submitted a compliant proposal, and we are confident in that proposal. So, sorry if that doesn't tell you as much as you'd like to know, Bob.
Hiya, Jeff Parsons, a long-term shareholder. Could you update us on the special grades of cerium and lanthanum, and how that's going, and how that's looking for the future, that material that commands a premium over the basic prices?
I so wish, Jeff, that Pol was here. Pol is online. So Pol Le Roux is our head of marketing and sales, and Pol would have responded to you in the first instance by telling you that he's in love with cerium, right? I'm not sure that his wife thinks that's such a great thing, but anyway, he is. Because the exciting thing is that there are opportunities to improve it, both chemically and physically, to differentiate it. So our technical development work has been focused on high-purity cerium and also high surface area cerium. And those will produce new materials which perform even better in, you know, sort of their roles in terms of catalytic processes.
But really, also, just some of the improvements that we made in the plant in Malaysia means that we are able, you know, we are producing, you know, we're producing on spec in a way that allows us to never have to sell an off-spec material or otherwise. But the catalytic market is more challenged at present than the magnetic materials market. If you think about it, you know, cerium, the primary use goes into autocat systems in internal combustion engine vehicles. That segment has certainly suffered during the pandemic, but also lanthanum goes into oil refineries, and it's not just, you know, that people aren't driving their cars as much. Actually, the really big issue there is that airplanes aren't flying.
So we're mitigating some of the effect of that because our prices are probably holding somewhat better, but it certainly is creating more challenges for us in the business than, you know, the core magnetic materials business right now.
Is there much cerium going to the polishing industry now?
Ah, see, I think it. Thank you, Jeff. See, if Pol was here, he'd say, "Amanda, you should have thought of that yourself." So in fact, we had our board meeting yesterday, and we were talking with the board, maybe it was or maybe it was at our management meeting the day before, but really some of the success that we've had in establishing our polishing business, and we are now producing significant amounts of lanthanum and cerium to go into the polishing powder market in Japan. And that, sorry, Jeff, that's one of the areas because where quality really matters, because when Jeff's talking about polishing powder, it's like, your television screen, you know, which has been polished or your phone. If there's even the slightest impurity in that and it scratches the screen, then you've really got a big problem.
So it took us quite a long time to get qualified for those customers, and so it is something of which we are quite proud, especially Pol.
Do we have any other questions in the room?
Stan, I'm a proxy holder and shareholder. I'd like to say first, Mike's stepping down and retiring. We're very grateful for what you've done, Mike, so thank you. And welcome to you, Kathleen. And, Amanda, just some questions, and I know we gave.
Can I just have just a thank you and welcome as well?
Yes, thank you. Yes, you've done a look. There's no doubt. No, look, there's no doubt, Amanda, that the people I represent and myself, that you've done an amazing job, you know? I go back to 1983 when Nick was here, so that's how far I go back with this company. So look, the concern we always have when we tap the market for money and the dilution, and then you have consolidations and things like that, and it affects shareholders. And we have the money now. So the concern we have is that we want to see not being tapped to the market. We don't want to see the company in the debt crisis it was, and we all know what it was. And you've done an amazing job to get it out of that, which is good.
We just want to focus on a couple of things. I mean, one of the shareholders who was online talked about dividends and some of the fellow shareholders that are here. Dividends are important, you know? I can name a number of companies, Iluka, which is not a big, huge company, but they deliver dividends, you know, twice a year. And it's important for shareholders, especially long-term shareholders and people who've invested in the company. So, and the debt thing, we never want to be in that debt situation again, Chair and CEO. It's really important, you know, and I know you take it serious. So if you can just bear those things in mind, we're happy otherwise how everything's going. And we want you to stay for a long time.
I think that what happens often in ASX companies, and I've seen. You know, I've been in this business 20 years, that what happens is that CEOs and people change, and the companies go terrible. S o.
Thank you for that. As I said, I'm ambitious for this company. I have no intentions of flying off into the, riding off into the sunset. My husband will tell anyone who cares to listen that life is easier for everyone when I'm busy. So, on the other matter and the management of the balance sheet, as Kathleen said, we think about this a lot. I understand that when you look at a capital raise, particularly as the quantum that we did in August, that people might say, "Well, what's the potential for downside?" And there certainly is potential for downside. On the other hand, the value associated with having a fully funded project in Kalgoorlie is really significant for this business. So when we initially talked about Lynas 2025 and building a facility in Kalgoorlie, that was 2025.
Now, we prudently must have that facility up, running, and producing at target rates by mid-2023. So we can't fund it out of cash flow confidently in that time, and particularly not with the uncertainties from the global pandemic. So ensuring that it was funded is really the most value-added thing that we think we can do for our shareholders. So then we had to think about, well, what's the right way to fund that? Is it equity or, or is it debt? And, you don't want us to be in that sort of debt mess again. I've got to tell you, I don't want to be in that debt mess again. But nonetheless, we did, you know, sort of give really very serious consideration to this. This is a key foundation of our business, and we felt that equity funding was the right path.
I think we have been vindicated in this. When you look at the fact that, you know, the shares are trading today about 60% above that, the price at which we raised. We have not, you know, destroyed our equity foundation in this business. But I think every director here will tell you, we spend a lot of time thinking about what is the right structure for the balance sheet and my growth ambitions. We will need to consider this on an ongoing basis. You know, what's the right way to fund that growth?
Thank you.
Bob Richardson again. Amanda, what is the approximate maximum capacity of the single new large rotary kiln that's going into Kalgoorlie?
We will start the first milestone that we need to meet is the equivalent of our current, so 7,000 tons a year, you know, 600 plus or minus tons of NdPr per month. However, we have designed it in such a way that it can be scaled up, depending upon the way that we operate it. And, you know, we continue to work towards that Lynas 2025 vision, which we have, which is 10,500 tons a year of NdPr.
Thank you. I noticed today's announcement of a new pipeline to bring gas to Kalgoorlie. There's already one, I gather, but I presume that would be quite a good thing for Lynas, wouldn't it? Because of the amount of gas that you would be planning to use.
I haven't seen that yet. But certainly we need gas and certainly we have talked to governments at all levels about the importance of government policy and infrastructure to really execute on, you know, government policy. So it's one thing, it's all very fine to say we'd like to have more critical minerals and rare earths processing in Australia. It's altogether another to ensure that, you know, government policy and infrastructure supports that. And so for us, you know, I go back to my point about cost is our muscle in our business. It's the thing which allowed us to survive where others didn't. And so, you know, building our facility in Kalgoorlie, ensuring that we don't bear cost penalties to that, and working with, you know, so government to ensure we have that is important.
The City of Kalgoorlie-Boulder has been, you know, really, an excellent partner in terms of working through this, and we continue to engage with both our state and federal governments to ensure that we are able to run an efficient and a cost-efficient business in Kal.
Thank you.
Michael Strakosch. Could you tell me the effect on the bottom line for every dollar or up and down that your four rare earths change in price has the effect on? I was seeing lately that the praseodymium price has gone up by CNY 20,000, which is not exactly transferable to US dollars, but I don't know where that price is secured on a Chinese Free on Board, which is not strictly your price.
There are some complexities to it, because, yes, the price for NdPr is set in renminbi. It then converts to US dollars, which then converts to Australian dollars. And so the price has been appreciating, and, you know, lots of people like to report different things, but it's sitting around about 400 RMB a kilo at present, which is about, you know, I think about a 6.5 exchange rate with the US dollar, takes us to somewhere around about $54 a kilo. However, at the same time, the US dollar has weakened against the Australian dollar, and so when we look at our weekly forecast, we look at it in US dollars, and then we look at it in Australian dollars.
Fortunately, at present, we're growing faster than the Australian dollar is appreciating. But we're not seeing as much upside as we would really like to see, because that little Aussie battler just keeps on keeping on. We'd be quite happy if it was, you know, certainly under AUD 0.70 . Generally speaking, it's worth about AUD 400,000-AUD 500,000 for every dollar. Yeah, so if you think about our sales being around about 400-450 tons a month, that puts it into perspective.
That's for the Pr-related, should I say? And the lanthanum has obviously gone up, or is it cerium that you're doing the polishing?
S ure.
Cerium.
But the changes in those prices, their prices are about AUD 2 a kilo. So, we need to optimize those because we've incurred cost in producing them, but you won't see it come through in the same. The change in market pricing, you won't see come through in the same way in the top line, unless they go to, like, AUD 10 a kilo, which we'd like.
Yeah, Jeff again. How's the reagent supply situation shaping up for Kalgoorlie? 'Cause indications early on were it's gonna be a bit more expensive than reagents in Malaysia. Will it be local supply or imported?
Our preference certainly for, so the primary reagent in the kiln is sulfuric acid. And there are solutions locally. I come back again to what I've said: our cost is our muscle. So the work that the team is doing, and you saw Katina, you know, this is the work around procurement on this, is about ensuring that we have the most cost-effective source. So there are local sources. Our local supplier in Malaysia has indicated enthusiasm to co-invest again alongside Lynas, and of course, there is import solutions as well. We have time to finalize that. Sorry, I know you've always got interesting questions, but someone else has to have a turn.
Good morning. Alex Reina, I'm a shareholder. I've got a question about growth and, and the future. Would like to know your position about, the rare earth mining on ocean beds. What are your thoughts about that? Do you think it's a serious area? Are you collaborating with the existing companies that are doing this, specifically in Japan? And, yeah, your opinion about that. Thanks.
I sometimes chuckle when I read about some of the sort of options for accessing rare earths, including, you know, from the moon. And I think about some of the challenges that we have had in creating a profitable business. And, you know, once again, go back to cost. So, you know, flying to the moon to get your rare earths is pretty expensive. Our assessment at this stage is exploiting a resource on the ocean floor is also pretty expensive. And we keep a watching brief on all the feedstock supply options. We've not found any yet which are as economic as continuing to explore and exploit our own resource at Mount Weld. It doesn't mean we won't find something else, and that's why we keep a watching brief on it, but at this stage, there is nothing.
Thank you. My last question, Amanda. Are there any current, still current Malaysian production limitations in Kuantan?
Yes, we still have a limit on the amount of lanthanide concentrate that we are allowed to process. We certainly won't test that limit this year because of the 44-day shutdown. It may come into effect next year. The following year, we expect to have Kalgoorlie ramping up, so we don't think it will be an issue for us then either.
So there is no. Well, I'm just wondering what the current reason would be for such production limitations. It seems odd to me.
Uh, yes.
We agree.
So are there any other questions in the room? Do we have any more questions online? Okay, excellent. So as there are no further questions at this stage, we will proceed with the formal business of the meeting. Attendees in the room will have received one of the following cards upon registration: blue for voting shareholders, orange for non-voting shareholders, and yellow for visitors. This year, we will again use the procedure whereby each resolution will be discussed, and then each resolution will be voted on by way of a poll. Details of the proxies received for each resolution will be shown on the screen prior to each resolution being put to the meeting. As stated on the proxy form, the Chairman will vote undirected proxies in favor of each resolution.
Each shareholder who is present in person and who is eligible to vote at today's meeting will have received a blue-colored voting card from the registration desk. At the conclusion of the meeting, representatives of the BoardRoom will collect the completed voting cards from each shareholder. The Notice of Meeting, having been duly distributed to all shareholders, will be taken as read. After each resolution is tabled, I will ask for questions from shareholders online and shareholders in the room. Resolution 1 seeks approval of the 2020 Remuneration Report, which is set out in the company's annual report. The Remuneration Report sets out specific details of the company's remuneration framework during the year ending 30 June 2020. Proxies received for Resolution 1 concerning the Remuneration Report are shown on the screen. Are there any questions for this resolution? Do we have any questions online, Jennifer? Thank you.
I will now put Resolution 1 to the meeting for voting by way of a poll. The text of the resolution is shown on the screen, if I can use the clicker. Now, resolutions 2, 3, and 4 relate to the proposed re-election of directors. The board values the contributions and experience of all of our directors, and we support the re-election of each of the directors. So Resolution 2 relates to the proposed re-election of John Humphrey as a director. Details of John's background and experience are set out in the Explanatory Memorandum and on the screen. The proxies for this resolution are also shown on the screen. I would now like to invite John to briefly address the meeting.
Thanks, Kathleen, and good morning, shareholders. I'm pleased to be able to share with you some details of my working background and experience. I graduated from university with a law degree, and I've subsequently worked as a corporate lawyer, spending 33 years as a partner in two of Australia's national law firms, being Corrs Chambers Westgarth and King & Wood Mallesons. During my career, I specialized in Mergers and Acquisitions, capital raisings, corporate disclosure obligations, and general corporate governance. In the time I've been on the Lynas board, this experience has proven useful, having regard to the recent substantial capital raising that Lynas successfully undertook, and before that, in the Lynas response to the takeover bid made for your company by Wesfarmers.
In addition, my experience in Mergers and Acquisitions should come in useful as Lynas evaluates and explores potential options available to it to achieve future growth in our product range, in our product volumes, and in our revenues, through taking advantage of well-targeted acquisition opportunities. I've been a director of ASX-listed companies for the last two decades. I'm currently a non-executive director and the chairman of Auswide Bank, a role from which I'll retire at the end of the year. I have previously served as a non-executive director and chairman of Spotless Holdings, Horizon Oil, and Villa World Limited, and as a non-executive director of Cromwell Property Group, Downer Group Limited, and Sunshine Broadcasting Network Limited.
As a result of these experiences as a non-executive director, I have acquired experience in mining and construction projects and workplace health and safety, all of which I believe are relevant and useful to Lynas. Now, Kathleen, I might hand back to you.
Thank you very much, John. Do we have any questions for John on this resolution? Okay. No, no questions. Thank you very much, John. As I said, the board really values John's contribution. So I will now put resolution to the meeting for voting by way of a poll. The text of the resolution is shown on the screen. Resolution 3 relates to the proposed re-election of Grant Murdoch as a director. Details of Grant's background and experience are set out in the Explanatory Memorandum and on the screen. The proxies for these resolutions are also shown on the screen. I would like to now invite Grant to briefly address the meeting.
Thank you, Kathleen, and good morning, shareholders and fellow directors. In asking for your support as a non-executive director, I think I bring experience and passion for Lynas and as a shareholder. My experience is over 40 years in professional services, initially as an audit partner and then as a corporate finance partner. And the experience as an audit partner has been tested as we have had several license issues in Malaysia, which has meant we've had significant negotiations with our auditors. For the past 9 years, I've been a non-executive director on a number of ASX companies, including ALS, Cardno, Redbubble, finance company QIC, and I'm currently a director of OFX. My other experience is as a senator of the University of Queensland, and I'm a past member of the AICD Queensland Council.
I think bringing that experience and passion, experience, my professional experience, but I see what Lynas is doing in the world as being one of the, the great opportunities for our, our globe. So thank you for your continued support.
Thank you very much, Grant. Are there any questions on this resolution? Thank you. So if there are no questions, I will put Resolution 3 to the meeting for voting by way of a poll. The text of Resolution 3 is shown on the screen. Resolution 4 relates to the proposed election of Dr. Vanessa Guthrie as a director. Details of Vanessa's background and experience are set out in the Explanatory Memorandum and on the screen. The proxies for the resolution are also shown on the screen. I would now like to invite Vanessa to briefly address the meeting.
Thank you, Kathleen, and good morning, everyone. I'm delighted to be here at my first Lynas AGM and have been nominated by my fellow directors to join them on the board. It's a privilege to be afforded the opportunity to join Lynas at such an exciting time and to be able to contribute to the growth of the company at a time of significant market expansion. The commitment demonstrated by the executive and board to creating value for all shareholders, as evidenced by the strong and sustained performance through difficult market conditions, as well as the exciting and ambitious future laid out by our Managing Director, was a key factor in my decision to join the Lynas board and stand for election today. This commitment reflects my determination to add value to your company and your investment.
As an independent non-executive director, I bring over 30 years of executive career experience to the Lynas board through my knowledge, expertise, and perspective that has been built across the mining sector in Australia, including at some of Australia's largest listed resource companies. I have a PhD in geology, and so the current, drill results are very exciting for me. I've held a number of senior roles, ranging from operations, environment, community, corporate development, and sustainability through to CEO and Managing Director. Since leaving executive roles, I've built a portfolio of board positions, and I'm currently a non-exec director of listed company Santos, Tronox Holdings PLC, and the deputy chair of Adbri Limited.
This strong corporate governance experience, combined with the breadth of my executive career and my deep understanding of health, safety, environment, and sustainability, adds to the current directors' experience base and brings further diversity of thought and expertise to your company. My aim is to use this experience to help grow your investment in Lynas and realize even greater value. I have the time and capacity to commit to Lynas and am committed to working collaboratively with your board and executive team to deliver the very best value outcomes we can for all shareholders. Thank you for your consideration, and with your support, I look forward to continuing to work hard in your best interests and delivering even greater value in both the short and the long term through a strong and sustainable Lynas. Thank you.
Thank you very much, Vanessa. Do we have any questions on this resolution? I will now put Resolution 4 to the meeting for voting by way of poll. The text of Resolution 4 is shown on the screen. Now, Resolution 5 relates to the proposed authorization of performance rights being issued under the company's Employee Performance Rights Plan. It is common for shareholders to seek, for companies to seek shareholder approval for the issue of employee performance rights every three years, in accordance with the ASX Listing Rule 7.1, as detailed in the Explanatory Memorandum. The Lynas incentive structure focuses on specific objectives that align with the shareholders, including cash management, production output, cost management, EBITDA growth, and total shareholder return. The proxies for this resolution are shown on the screen. Are there any questions for this resolution?
If there are no questions, then I will now put Resolution 5 to the meeting for voting by way of poll. The text of the Resolution 5 is shown on the screen. I'll now move to Resolution 6. Resolution 6 relates to the proposed grant of 473,407 performance rights for the benefit of our CEO and Managing Director, Amanda Lacaze. Each performance right is a right to acquire one share of the company in the future. More details regarding the performance rights that are proposed to be issued to Ms. Lacaze are set out in the Explanatory Memorandum. Proxies for this resolution are now shown on the screen. Do we have any questions on this resolution? Okay, if there's no questions, I'll put the resolution to the meeting for voting by way of poll.
The text of the Resolution 6 is shown on the screen. Resolution 7 is a special resolution related to the proposed change of the company's name to Lynas Rare Earths Limited, and the consequential changes to the references in the company's name in the Constitution. The board believes that Lynas should be clearly branded as a rare earths company in light of Lynas's leading role in the global rare earths industry. Accordingly, the proposed change of company name is appropriate to further promote the company's strategic objectives and our position in the global rare earths market. The proxies for the resolution are now shown on the screen. Are there any questions for this resolution? Okay, since there are no questions, I will now put Resolution 7 to the meeting for voting by way of poll. The text of Resolution 7 is shown on the screen.
Ladies and gentlemen, that concludes the formal business of the meeting, and as there is no other business, I declare the formal part of the meeting closed. I would now like to complete the poll process. For those shareholders present in the room, the instructions for completing your blue voting card are as follows: Please write your name on the card in the space provided at the top. Secondly, unless you wish to vote a number of shares in one manner and another shares in a different manner, clearly mark only one of the boxes on the voting paper next to each of the resolutions. You may vote for or against each resolution.
Please sign in the space provided at the foot of the voting card, and finally, lodge the completed blue card in the ballot boxes that are available at the doors when you exit, or hand your card to a BoardRoom representative who is now in the room. The results of the poll will be announced to the ASX and posted on the Lynas website today. Ladies and gentlemen, thank you again for your attendance, both in person and online, and the interest you continue to show in our company. That concludes today's proceedings. Thank you.