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Key points
- The Lynas share price has dropped following its latest quarter update
- This is despite the miner reporting record sales revenue for the quarter
- Lynas is known for producing the battery material commonly used in electric cars
The Lynas Rare Earths Ltd (ASX: LYC) share price is slipping today despite the miner announcing record sales revenue in its latest quarterly report.
After a morning of ups and downs, the Lynas share price has sunk further in afternoon trade and is currently 1.35%, trading at $10.94.
Lynas is the largest producer of separated rare earth minerals outside of China. This includes neodymium and praseodymium (NdPr) — the combined material needed to power clean energy batteries such as electric vehicles.
Resources produced at its Western Australian Mt Weld mine are processed offshore at its Malaysian plant.
Let's take a closer look at the miner's results for the period ending 31 December 2021.
Record sales revenue for Lynas
This morning, Lynas released its company results for the December 2021 quarter, reporting inflated production and a record sales revenue of $202.7 million. This compares to $121.6 million in sales revenue for the same trading period in FY21.
The miner reported high consumer appetite and enthusiastic market conditions, which it anticipated would continue into the next quarter.
NdPr was in steady demand, with the market price hitting US$100/kg in November for the first time in 10 years. Production of the material reached 1,359 tonnes.
While the Chinese domestic price for NdPr was slightly higher, customers were prioritising "security of supply rather than price" in this current climate, according to the company.
Total rare earth oxide (REO) production was 4,209 tonnes.
The company reported it had completed its mining campaign 4-1 drilling during the quarter, and its chemical assay results were now pending.
Lynas added that coronavirus-related challenges were "inevitable", but it had risen to the challenge during the quarter.
With shipping delays and disruptions doubling the transportation time on its Fremantle to Kuantan, Malaysia route, the company chartered a ship to ensure consistency of supply instead of using regular commercial options.
Lynas will continue to combine these two shipping options in the future.
In addition, its employees in both Malaysia and Australia had achieved a high vaccination status, with almost half of Malaysian employees receiving third doses.
What's next for Lynas?
Looking forward, the company is pursuing its Lynas 2025 project.
The miner is building a rare earths processing facility in Kalgoorlie, Western Australia. This will be used to process the material produced from its Mt Weld mine.
The WA Environmental Protection Authority (EPA) issued an assessment report in October regarding the project. The approval is now awaiting determination.
The company has also ticked off several project milestones including the start of site recruitment and the arrival of essential equipment (such as kilns, filters and steel tanks).
Environmental regulator approval for its Malaysian permanent disposal facility (PDF) for Water Leach Purification (WLP) has also been attained, with further environmental, social and radiological impact assessments currently underway.
Lynas share price snapshot
The Lynas share price has seen a stellar 147% increase in the last 12 months.
Exactly a year ago, the Lynas share price was at its lowest point, at $4.48 apiece.
The Lynas share price hit a 52-week-high of $11.24 on January 13, after releasing its commitment to protect human rights and prevent modern slavery within its operations.
The miner has a market capitalisation of more than $10 billion and a price-to-earnings ratio (P/E) of 61.73.
