Lynas warns of production shortfall

Lynas Rare Earths (ASX: LYC) is expecting production shortfalls at its Kalgoorlie processing facility in WA due to major power supply disruptions.

Lynas estimates shortfalls to be equivalent to about one month’s worth of production.

The facility has seen a significant rise in power outages throughout the year, coinciding with the city phasing out its diesel generators in favour of renewable sources from the South West Interconnected System (SWIS).

The frequency and duration of outages were at a level in November that led to substantial lost production of mixed rare earth carbonate (MREC).

The company is assessing off-grid power solutions as a short-term solution to recover lost production within FY26 while it works with the WA Government and Western Power to improve power availability.

Lynas opened the Kalgoorlie facility late last year for intermediatory process rare earths sourced from its Mt Weld mine in WA before supplying the product as feedstock to its processing facility in Malaysia.

Production of finished goods at Lynas’ Malaysian facility is being affected by the shortfall in feedstock as the Kalgoorlie site is unable to recover lost production in time for processing within Q2 FY26.

Rare earth export restrictions imposed by China this year created a global push to diversify supply chains and Lynas is the largest producer of separated rare earth oxides outside of China.

Lynas has confirmed it will still produce sufficient product to fulfil customer requirements.