The Lynas Rare Earths Ltd (ASX: LYC) share price is falling on Tuesday morning.
At the time of writing, the rare earths producer's shares are down almost 3% to $5.88.
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Why is the Lynas share price falling?
Investors have been selling the company's shares this morning following the release of its fourth quarter update.
According to the release, during the fourth quarter, Lynas' gross sales revenue fell 13.3% over the prior corresponding period to $136.6 million and sales receipts dropped 37.8% to $117.5 million.
Management notes that despite a slight improvement in China domestic end product demand, market prices remained low. But the good news is that Lynas' average selling price improved through the quarter as it carefully managed the timing of sales, especially for Heavy Rare Earth which were quite volatile throughout the quarter.
Lynas' average selling price during the fourth quarter was A$42.3 per kg. This is down slightly year on year and quarter on quarter.
Total rare earth oxide (REO) production came in 51.1% lower year on year at 2,188 tonnes and neodymium and praseodymium (NdPr) production fell 19.3% year on year to 1,504 tonnes.
Management advised that this production decline reflects its decision to undertake essential maintenance at Lynas Malaysia during the quarter.
Once complete, the company continued the ramp up downstream production to its interim target of 9,000 tonnes per annum. It is now working towards increasing its production to 10,500 tonnes per annum.
At the end of the period, Lynas' cash and equivalents balance was $523.8 million. This is down almost 50% since this time last year and 15% since the end of March.
Other news
Failing to give the Lynas share price a boost today was the release of another announcement after the market close on Monday.
Lynas announced that it has signed contracts with Zenith Energy for the supply of power from a gas-firmed hybrid renewable power station to Lynas' Mt Weld mine and concentration plant, near Laverton, Western Australia.
Lynas' CEO and managing director, Amanda Lacaze, commented:
Lynas produces materials used in the manufacture of 21st Century technologies and we look forward to working with Zenith Energy as it delivers a 21st Century power solution for Mt Weld. As part of our commitment to reducing GHG emissions and progressively transitioning to cleaner energy sources, the existing Mt Weld diesel power plant will be decommissioned as soon as the thermal (gas) power station is completed.
Moving away from the legacy diesel power plant to a gas-firmed hybrid renewable power station is a significant step in reducing the GHG emissions intensity of our Mt Weld operations. Pleasingly, our commitment to renewable energy sources also offers a lower unit cost of power compared to a thermal-only power solution.
