Lynas Rare Earths Ltd., the first commercial producer of heavy rare earths outside China, announced plans to raise A$750 million ($488 million) through an equity capital raising, comprising an institutional placement and a share purchase plan. Shares will be offered at A$13.25 each, representing a 10 per cent discount to the last traded price on August 27.
Chief Executive Officer Amanda Lacaze said the move reflects the need to act quickly in a rapidly evolving market. “The rare earths market is rapidly evolving and we need to move at pace to maximize value from existing assets and create further value from market opportunities,” Lacaze said in a statement on Thursday.
The news follows a recent surge in rare earth prices, with Lynas selling its products at the highest rates in three years. The rebound comes as global supply tightens and demand recovers. China, which accounts for roughly 90 per cent of global rare-earth magnet production, reported that shipments in July jumped to their highest level since January.
Despite the favorable market conditions, Lynas posted A$8 million in net income for the year ending June 30, falling short of the A$23.5 million expected by analysts. The company is betting that the capital raising will enable it to expand operations and capitalize on the improving market environment.
