(Reuters) -Australia's Lynas Rare Earths warned of considerable uncertainty over the future of its heavy rare-earths processing plant in Texas and also reported a steeper-than-expected drop in its annual profit on Thursday.
Lynas, the world's largest rare-earths producer outside China, said it is in negotiations with the U.S. Department of Defence (DoD) to reach a mutually acceptable offtake agreement for production from the Texas-based Seadrift facility.
"While there can be no certainty that offtake
agreements will be agreed, any offtake agreements would need to be on commercial terms acceptable to Lynas," the miner said.
Lynas has been developing the facility under a contract with the U.S. DoD, with plans to begin operations in fiscal 2026. However, the company indicated that construction of the plant may not move forward.
The company's net profit after tax came in at A$8 million ($5.20 million) for the year ended June 30, a sharp decline from an A$84.5 million reported a year earlier.
The annual figure also missed the Visible Alpha consensus estimate of A$30.4 million.
Lynas attributed the drop in profit to depreciation costs from its Kalgoorlie and Mt Weld facility expansion, noting that production at Kalgoorlie fell short of nameplate capacity.
It expects its fiscal 2026 capital expenditure to be around A$160 million.
Separately, the miner announced a A$750 million equity raising to "pursue new growth opportunities".
The capital raise will see new shares issued at a price of A$13.25 apiece, representing a discount of 10% to its last close on August 27.
Shares of Lynas were placed on a trading halt earlier in the day ahead of the announcement of its annual results and the upcoming equity raising.
($1 = 1.5389 Australian dollars)
(Reporting by Shivangi Lahiri and Shruti Agarwal in Bengaluru; Editing by Vijay Kishore and Sherry Jacob-Phillips)
