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Operator: Thank you for standing by, and welcome to the Lynas Rare Earths Half Year 2026 Results Briefing. [Operator Instructions] I would now like to hand the conference over to Lynas Rare Earths. Please go ahead.
Jennifer Parker: Good morning, and welcome to the Lynas Rare Earths Investor Briefing for the half year ending 31 December 2025. Today's briefing will be presented by Amanda Lacaze, CEO and Managing Director. And joining Amanda today are Gaudenz Sturzenegger, CFO; Daniel Havas, VP, Strategy and Investor Relations; and Sarah Leonard, General Counsel and Company Secretary. I'll now hand over to Amanda Lacaze. Please go ahead, Amanda.
Amanda Lacaze: Thanks, Jan, and good morning, everybody. Thank you all for joining today. I always think that it's a bit funny. You can see me, but I can't see you, but I hope that you're all well. And I'm incredibly pleased to be able to do this presentation. The first half of FY '26 has been one of those sort of half years where we were very busy, but it's really only in retrospect that the scale of what we were able to achieve has been properly illustrated. So look, I think it will be helpful to really step through the presentation that we launched today. We've got the obligatory disclaimers. And we have the important recognition of country as an operator in Australia in the mining sector, acknowledging and respecting the Traditional Owners of the lands on which we live, work and meet across Australia is important, and in particular, acknowledging and valuing our Aboriginal and Torres Strait Islander employees, partners and communities. So in the year-to-date, as I said, in the first 6 months of this year, we were busy. But as we look back on it in the rear vision mirror, gosh, we were really busy. Many achievements. So for a long time, we've been talking to you about the Lynas 2025 capital projects. And during this first 6 months of this financial year, a lot of milestones have been achieved with respect to those. The Mt Weld expansion project has been largely commissioned with the new flotation circuit operating at 70% of nameplate. I know that oftentimes, it's sort of, people will look at Mt Weld and I'll just say, well, we know the Mt Weld resource. We know the beneficiation circuit, all of this is pretty easy. I just would like to remind everyone, this is a big, complex project, as big as many other mining firms in Australia who don't do any processing past that initial beneficiation. We've had to commission 3 new mills. We've got new processes. We've got significant investment. I'll talk a little bit more about with water recycling. And so all of these things, it has been a complex commissioning and process and ramp-up process. And I'm really pleased with the progress that the team has made. Also of really important note is our 65-megawatt hybrid renewable power station is operational, and you can see some of the photos further on of the new wind turbines. The ramp-up at Kalgoorlie continues. We've undertaken a number of process modifications there to improve its performance. And I think as everybody knows, it has not been without its challenges, both internally and most particularly externally. It's very difficult to run a big complex plant like Kalgoorlie without reliable power. In Malaysia, where I think that we often don't put quite as much focus as we're talking about these things have been significant changes implemented as part of Lynas 2025, the uplift in production capacity, the processing of mixed rare earth carbonate and of course, the -- we had our first full 6 months of HRE or separation of dysprosium and terbium. So having done all of those things, and we've drawn the line under the Lynas 2025 capital program. It's really about how we're setting up the business for the next growth phase. And we started with the capital raise. We've announced the larger HRE separation facility that will go into Malaysia. We've announced some elements of our contribution to continuing industry development, including in metal and magnets, but also in terms of resource development. So as we look at all of this, I am minded to remind everybody that this is complicated. And I think I have mentioned it previously, but I would recommend to any sort of observer of this market, a particular study done by an engineer, Jen can provide information on this, but a consulting engineer on ramp-up curves for critical minerals and the fact that if you use McNulty, which is a 1 to 5 in rare earths outside China, you've never had anyone who's -- or in critical minerals projects generally, you've only had 1 or 2 projects. And this includes things like vanadium and nickel and as well as rare earths and a variety of other materials that has ever come close to a McNulty 1 or 2, which is the fastest, most trouble-free ramp-up. In other sectors, Lynas has performed best, and we were at a McNulty 4 ramp-up in Malaysia, and then we jumped up to a McNulty 2 in around about 2016. It is easy because we are an established player for people to think, oh, well, we've just brought on a new facility here and brought on a new facility there and everything is fine. But I would just remind everybody of the complexity and the value that derives from the fact that we are an established and experienced operator and indeed have been able to bring our new assets online, not trouble-free. That would not be fair to my operations team to say that, but certainly in very good order, and we continue that ramp up as we speak. We continue to put safety at the heart of everything that we do. And I was talking to our Board about this and as we were thinking about how do we present some of the safety information. And I made the point that it's a little bit disappointing in some ways that we hardly ever spend any time on the safety slide externally. We spend a huge amount of time, however, on safety, on personnel and process safety inside the business. And I would also take this opportunity to remind everyone that Australian mining leads the world in terms of both our approach and our performance with respect to safety and other sustainability practices. We're incredibly proud that the major maintenance that we undertook in Malaysia late in the second quarter, which involved over 30 subcontracting companies and 100,000 work hours was executed to schedule and without injury. We're incredibly proud that Mt Weld and Kalgoorlie employees achieved 12 months without any recordable injuries in December 2025. And as our projects move from commissioning to operations, we are very focused on our Yes, We Care HSE strategy because, yes, we really do care that everybody goes home safely and well every day. Then if we look at our financials, well, this is very pleasing for me as I make my last half year report, to be able to report such an excellent results. I'm also a bit sad that the next CEO will get all of the second half glory because as we've foreshadowed in our announcement, we expect that the market settings will continue to be positive. And I think everyone who's been following Lynas for some time would appreciate we are the only company that can take full advantage of the positive market settings because we are the company that is operating and producing today, not just lights but also heavies. So excellent performance, sales revenue, net profit after tax, EBITDA, all up. And of course, we have the big jump in cash and short-term deposits as a result of the capital raise, which is setting us up for towards 2030. When we look at it operationally, and this is one of my favorite photos. And I think some folks have been in Malaysia in the last 6 months would have seen this new part of product finishing. And it is just beautiful. It's part of our uplifting capacity that we have available to us now in Malaysia. So NdPr production was absolutely on track for record 6 months until we hit the problems with power in Kalgoorlie. So we're just a little bit off. But -- and as you can see from this, we're starting to roll off in terms of sort of final payments related to the capital program with Lynas 2025. Looking at that sort of with a bit of history, we've just put in the half years since FY '20. You can see that we are sort of consistently increasing on a rolling 12-month basis, we've certainly had -- and rightly so with all of the investment that we've made, we continue to set new production records. As I say to our operations team, every month should be a record as we continue our ramp-up of the new facilities. And then, of course, you can also see the benefits that come from the increased benchmark selling price. So the benchmark is moving higher, but our internal measure is how much we can beat that benchmark by as a result of our efforts and our negotiations with various customers. The market generally is very constructive right now. As we've indicated, the price in December 2025 was sitting for -- NdPr was sitting at $74 a kilo compared to $49 in December 2024. That price has continued to firm. And yesterday, we reached over the sort of magic $110 a kilo mark. And this really reflects a number of things. It does reflect the government actions in -- which is really starting to reshape the market. We are seeing governments Australia, Japan, EU and of course, the U.S. taking action to create a functional market, right? We have never asked for subsidies, but there is no question there has been market failure for many years in the rare earths industry and acting policies, which ensures that the market is functioning properly, we think is really important. And as those policies are implemented and the market responds, then the potential cost to government just goes down. I mean like at present, as the price sits above the $110 NdPr floor price, I'm sure the U.S. government is feeling very relaxed. We continue to be engaged closely with relevant governments, and I'm sure many people will have read various articles on the likelihood of governments other than the U.S. government also putting in place policy measures to facilitate a proper functioning market. So for us, huge opportunities. We make lots of NdPr, and we make now Dy and Tb. These are the products in greatest demand in terms of total volume, and we will shortly be producing some other materials, particularly samarium, which we expect to come through before the end of this financial year. I was hoping -- so -- and then it will follow up with gadolinium and neodymium and then other elements as we bring our new production facility in Malaysia online. Japanese magnet makers are winning new business. Ex-China magnet buyers are seeking direct supply to mitigate supply chain risks. As recently as yesterday, we had Chinese indicating further controls on materials to be exported to Japan. We have a very long-standing and productive relationship with our Japanese customers, and this certainly provides an opportunity for Lynas. And we are seeing significant demand for our bundled lights and heavies sort of being able to sell these together in the ratio that customers require them gives us a significant competitive advantage in the market. So we are -- this says we can capture value, we are capturing value from the current market upside. Just then just everyone can step through. I love this picture of Mt Weld. We've gone from this tiny baby little sort of concentrator, which is sitting sort of in the sort of top right-hand corner there below the process water pond. On your top left, I think it's quite helpful for people to see. Those are our tailings dams. But as you can see, they're like a beautifully sort of plowed field, not ready to be sown with wheat, but certainly ready to be remined and put back through our processing facility. Some of the elements of the new beneficiation plant means that we will be able to liberate some of the materials, which we did not recover in the first instance. And in those tailings dams facilities, we've actually been able to track the rare earths concentration at somewhere around about 7% to 7.5%, which makes it in and of itself a highly valuable mineral resource. Kalgoorlie continues to ramp up. Sorry, I missed -- no, Jen, you can go back. You can see 3 of our 4 wind turbines there. This is just terrific. We are so pleased with the new power station. It is not cheap. And I do get frustrated when people talk about how sort of the unit cost of a kilowatt hour of renewable power is cheaper than any other option. That's true, but only after you've covered the capital cost of the 4 wind turbines and 2,500 solar panels and the gas turbines, which need to be there to provide baseload power and the batteries as well. Having said that, it is true that on a variable cost basis, we now have electricity, which is significantly less costly than our previous diesel power station. But more importantly, we are really, really pleased that we've been producing in December, 92% of our power has come from renewable electricity. The wind at Knight has been a better source of power than we were expecting. And the power station is performing better than our initial target of 70% renewable content. So really very excited about that. And the second really significant initiative as part of the Mt Weld expansion was commissioning of some of the new water treatment facilities with our objective to achieve 90% of our tailings water to be recycled. We've been able to demonstrate that. We're not yet reliably and sort of delivering at that level, but we are confident that we will get there. And then Kalgoorlie, Kalgoorlie, I think I've said previously, we need to recognize there are 2 parts. Cracking and leaching, but -- we have many skills when it comes to sort of cracking rare earth ores in our company and the cracking and leaching part of Kalgoorlie is actually running pretty well, notwithstanding the outrageous, frankly, power disruptions that we had during the second quarter. The mix -- the carbonation circuit as with all new processes, we found as we've ramped it up that bottlenecks move around and that we need to enhance or improve certain processes. And we are doing that in a very managed and measured way, just like we did when -- really when we were ramping up the LAMP 10 years ago. And so Kalgoorlie continues to improve, but not yet where we would like it to -- quite yet where we would like it to be on a long-term basis. And then Lynas Malaysia is, once again, not giving me any sleepless nights at all. The Malaysian plant is running extraordinarily well. The -- particularly, we're seeing the benefits of the major maintenance on the cracking plant in the second quarter. It's running better than it has ever run in its life. The new separation circuits are stable and producing. And really, it's just a case of can we keep feedstock at the sorts of rates that we want them to. I think as we said, we produced Dy and Tb last year, and we've announced the new expansion, Heavy Rare Earths expansion plant, and we expect samarium production soonish. So all looking very good in Malaysia as well. In the U.S., the U.S. has -- well, boy, has the U.S. government really sort of discovered rare earths. We have continuing discussions with the U.S. government, particularly with respect to an offtake agreement, which is acceptable to us. Having said that, our engagement with particularly U.S. defense industries is really strong. And we are selling material into U.S. defense industries at very pleasing prices. We've also taken the opportunity to do a little brand promotion. I thought everyone would like to see our billboards as they were in various locations in Washington. So just -- Jen, moving on to the next one. I've really already talked about the hybrid power station and -- okay, now we'll move on to communities. And I think everybody who has even spent a few minutes with me over the years knows my view, which is that we cannot prosper if the communities in which we operate do not prosper as well. So in each and every one of our locations, we are incredibly connected to community. We think that it is a really important part of our success and also our culture. And I look at the faces whenever we have these photos. I look at the people that -- our people who are engaged in our community events. And I'm just really proud of them and really proud of the contribution that we make to improving the lives of the people who both work for us, but also their families and their community. So with that, I am very happy to -- yes, then we got the stuff about people. Then I'm really happy to take questions.
Operator: [Operator Instructions] Your first question comes from Rahul Anand with Morgan Stanley.
Rahul Anand: I just wanted to ask a question on sort of how you're going with securing that ionic clay deposit or supply from Malaysia for the HRE plant? And I guess, how much can you produce from the plant; currently in terms of yttrium, dysprosium and terbium if you're only using the Mt Weld feed?
Amanda Lacaze: So we can't produce anything from the plant yet because it's not actually constructed. So we do just have our small little circuit that which is just doing the Dy and Tb, right now, we will have some samarium come out, but that's actually not from the ultimate facility. We're doing that via a bit of flow sheet development within our normal operations. We are working closely with a number of firms in Malaysia on working through the ionic clay development with the objective that we will have that as feedstock at the same time as we're bringing that new plant online, which we expect to be towards the end of calendar year '27.
Rahul Anand: Yes. So my question was related to the new plant, Amanda. But I guess just as a follow-up, if there is at all a restriction from China in terms of, I guess, IAC leaching reagents or SX chemicals, is there a contingency plan? Or can you source them elsewhere as well once that plan comes up?
Amanda Lacaze: We've already done that. We've already put in place contingency plans for all reagents and all equipment, which is required in Malaysia. We've been working on that since -- well, actually since before the initial issues in April last year, but certainly since that time. And so where when we started last April, there was a couple of critical path items, we have identified alternate sources for those items. And we are confident about our ability to continue to operate. But the point that you're making about sort of availability of reagents, equipment and expertise out of China is an important one and is another reason why Lynas is in such a strong position to take advantage of current market dynamics compared to other firms.
Operator: Your next question comes from Neal Dingmann with William Blair.
Neal Dingmann: Amanda, a quick question. Could you talk a little bit about offtake agreements, maybe even including, I know with Noveon, you have the MOU. So I'm just wondering, it seems like, again, now that you are cranking up production, I would assume everybody is sort of knocking at your door.
Amanda Lacaze: Of course, sometimes we knock at their doors. Certainly, our objective is to ensure that we have -- ultimately that we have 100% of our offtake contracted to the highest value customers in the market. Our ability to be able to sell bundles of NdPr and Dy and/or Tb certainly gives us the opportunity to be able to capture, as I said, the highest value customers. And we're confident that as we ramp up over the next 3 years as some of the downstream capability outside China, downstream capability comes online that we will be to place 100% of our material outside China. Having said that, China is the largest rare earths market in the world, and we're happy to participate in the Chinese market as well.
Neal Dingmann: Very good. And just a reminder on the heavies, what is the -- what's your capacity on the heavies? Can you remind me again?
Amanda Lacaze: Well, at present, we haven't provided explicit capacity on Dy and Tb because it's a bit of an opportunity sort of circuit that we've put in place. But on the -- we have provided that. And actually, it would probably be best if I point to Daniel to give that sort of data. But at present, we -- if you take our production stats that we provided as part of the quarterly report for the first 6 months, that's probably a reasonable sort of an indication. Daniel, did you want to add anything to that?
Daniel Havas: Well, the current circuit is doing -- has the capacity of 1,500 tonnes throughput. But as Amanda points out, we've not provided guidance on the breakdown of the Dy and Tb coming out of that. The new facility will allow us to have 5,000 tonnes of throughput and the figures were outlined in the release when we announced the heavy circuit -- sorry, the heavy facility that we're putting in Malaysia.
Operator: Your next question comes from Austin Yun with Macquarie.
Austin Yun: Just first question is on the cost side. Looking to understand what's driving the rise in the general and admin costs in this period. Also, understand how should we think about the depreciation charges given the run rate is ramping up at Kalgoorlie?
Amanda Lacaze: Sorry, what was -- Austin, what was the second part of that question? I just missed it.
Austin Yun: Sorry. The second part is on the depreciation charges.
Amanda Lacaze: Depreciation? Okay.
Austin Yun: Yes. The first one is on general and admin expenses.
Amanda Lacaze: Okay. So I'm just going to ask Gaudenz to deal with both Part A and Part B, Gaudenz.
Gaudenz Sturzenegger: Yes. Austin, thank you for the question. I think the first one, I understood was a G&A question. The other one was a depreciation question. On G&A, I think if you go a little bit to Note 10, which -- and the Note 2, which Note 2 in this case, I think a big portion of the increase is related to not absorbed depreciation and employment cost charges, which relate to Kal. So we are not yet running at the run rate we are planning. So that has impacted about $20 million, $25 million on this. And on depreciation level, I think here, important to go back to our main projects we have or we had. I think it's $800-plus million on Kal, $550 million for the Mt Weld expansion. And most of this has been capitalized before. So you will see now the impact on the depreciation side, there is a smaller portion, $100 million to $200 million, which is still to be capitalized in Mt Weld expansion, which should happen in this quarter. So I think it's a pretty solid base. You have seen there. There's probably a little bit more due to the second phase of the Mt Weld. But fundamentally, it's just the $1.35 billion, which are coming into operation and where we had the capitalization event. I hope that helps.
Austin Yun: Yes, sure. So the depreciation charges will be even higher in the second half, potentially given the ramp up?
Gaudenz Sturzenegger: Yes, exactly.
Austin Yun: Okay. Just the second question is on Kalgoorlie. Amanda, you mentioned that it's still kind of in the ramp-up and the bottleneck is sort of shifting. I'm just keen to understand your operating model plan for this plant in the next 12 months. Are we still expecting a batch operation model? Or would you aim to switch to continuous towards the end of this calendar year?
Amanda Lacaze: At present, we aim to -- at present, Kalgoorlie is extra capacity to the baseload in Malaysia. And so we manage production to that. And so that's not hard to work that out. We added 50% capacity to downstream. So we've got baseload comes out of cracking in Malaysia, plus half of that again coming out of Kalgoorlie. And we'll just manage it, whether it's sort of decisions on batching or continuous operation for longer batches, I guess, they're just operational decisions that we will make on what's the best operating and financial outcome.
Operator: Your next question comes from Chen Jiang with Bank of America.
Chen Jiang: Thank you for all the color on the rare earths market and comments about your sales in the presentation. First question, I'm just trying to understand your comments about Lynas continue to optimize your sales model, direct contracting and also you have ongoing negotiation offtake agreement with U.S. government. What's going to change going forward, especially for your 7,500 tonne per annum NdPr priority sales to Japan? And because you are ramping up, there will be incremental sales ex Japan. I guess, given -- how should we think about your pricing mechanism for NdPr? Because as you mentioned in the call, China NdPr price is $19 or 17% above the price floor. So I guess you are getting that USD 120 per kilogram higher than price floor or you can beat that benchmark for NdPr.
Amanda Lacaze: So you've answered all your own question, Chen. Yet, our job -- the sales job and the sales measure that our Head of Sales provides to me on a monthly basis is what percentage above the equivalent benchmark rate are we achieving in terms of price. And we do achieve a premium versus the benchmark. It is different customer by customer for customer-specific reasons. And we don't provide sort of detail on all of our customer contracts, which wouldn't surprise you. I mean they're commercial and confidence and really such an important driver in our business. So we do still have -- however, we have some contracts which have floors and ceilings and the ceilings sometimes can be lower than the market price, but we've made a decision that made sense when we put those contracts in place. We have other contracts which are just pegged to the market price. So as the price goes up, we make more money. And then we have increasingly longer-term contracts and our discussion with all of particularly magnet buyers is that we're not interested in short-term contracts. We're interested in long-term contracts, which properly reflect the value of the materials that we produce. So we've always said this that we have a variety of different pricing mechanisms and the task of our sales team is to optimize that to give us the best possible return. And really a key measure on that is how much value are they adding, which is the size of the premium versus the benchmark. [ It's ] really good right now, as you can see.
Chen Jiang: Yes, yes. I guess for your priority sale to Japan versus ex Japan, you would get a better price ex Japan. Is my understanding correct?
Amanda Lacaze: We seek to get the best price in every instance, which is the right price for our customers and the right price for us. We have a very long-standing relationship with our Japanese customers. We have commitments, which are mutual commitments as far as those contracts are concerned. But I think that trying -- I understand why you are asking this and you're trying to deconstruct our revenue line. I'm not going to even give you breadcrumbs to be able to do that because the way that we deal with our customers is an important part of adding value in our business. And I don't want to be deconstructing the way that we deliver the final outcome. The issue is are we continuing to drive extra growth from our business? And are we driving that growth from a combination of volume and price. And I think that our results tell you that we are doing that.
Chen Jiang: Sure. I understand. And just a second question on your balance sheet. So I guess you have over $1 billion cash sitting there from the equity you raised last year. Now thinking of the incoming operating cash flow over the next 12 months given NdPr price is so high and you continue to ramp up production. So you will have a lot of cash printing over the next 12 months. But your FY '26 CapEx kind of guided last year $160 million. So how should I think about your CapEx profile? I guess you won't keep piling the cash. How should I think about your CapEx profile and your organic growth over the next, I guess, near term or medium term?
Amanda Lacaze: Thanks, Chen. So I think the first thing is that we did -- if we separate these 2 things, and actually, we do separate these 2 buckets of money as -- even on -- we still do a weekly forecast, and we separate these 2 buckets of money. We manage to the ex capital raise bucket. So really, what are we doing in terms of generating cash from operations and improving our position there. And that is really because it remains my heart desire that we are able to return some of that capital to our shareholders. The second piece, which we manage as a separate sort of bucket of money is the money that we raised for the Towards 2030 growth initiatives, and we will spend that money on those initiatives. So far, we have announced the $180 million, which is for the new HRE plant in Malaysia as well as that we are progressing rapidly on detailed documentation around things like the JS Link magnet factory in Malaysia, and we will be making further investments in terms of resource development once again, particularly in Malaysia. So that's the way that we are thinking about this with the objective that as we continue to generate more cash out of the business that we manage that accordingly, and we have the ability to make a decision on how and at what time and in what form might that be returned to shareholders, recognizing that we are still a growth business. The capital that we raised in August actually underpins our growth capability and we'll continue to do so.
Operator: Next question comes from Jonathan Sharp with JPMorgan.
Jonathan Sharp: Congratulations on the good result. Nice to see those NdPr prices coming up. First question just on the Towards 2030 5-year growth strategy, which one of the pillars is increasing capacity. But my question is, will this include expanding NdPr capacity at some point beyond 12,000 tonnes per annum? Now I understand that you're currently embedding the expansion that you've just done and some -- but yes, will it include expanding beyond the 12,000 tonnes per annum? And if I'm correct, my understanding is that there's a pathway to an additional 2.4 kilotonnes per annum at the concentrator, which was previously disclosed. You have the capacity of cracking and leaching once Kal's ramped up. And I would imagine the ability to expand solvent extraction is there with not too much capital. So really, my question is, why not expand further beyond 12,000, even if that's after 2030? Or is it more to do with the market being there to sell into?
Amanda Lacaze: Thanks for the question, Jonathan, and welcome. I see that you're now [indiscernible] at JP. So yes, we will consider expansions beyond the current -- well, we've got -- we've said in the Towards 2030 like today, we got 10.5. We've said the stepping up to 12 is sort of a bit of a no-brainer. There are, however, some more substantial investments required to take it beyond that, but we know what they are. Some are at Mt Weld and some will actually be in Malaysia. You're right about our ability to be able to increase throughput and solvent extraction very cost effectively. But bear in mind, we just put on about 50% capacity increase in solvent extraction without a really serious price tag attached to it. The next step is going to have a few more costs associated with it. And some of those are going to be related to utilities and other management capabilities in Malaysia. The team is working on that. We expect over the 5-year period, yes, we will have placed 100% of what we produce outside China, and we will be looking for more production. And so therefore, we will be looking to drive production higher. But we don't have the precise plan on how all the bits of the jigsaw fit together to do that quite yet.
Jonathan Sharp: Okay. And maybe just to dig in a little bit more on that. Would it be right to do 14,000 tonnes per annum after 2030? Or is there a number that you could give us?
Amanda Lacaze: Well, I think -- as you've noted, Jonathan, we have identified 2,400 tonne uplift that would come out of Mt Weld. And we've previously identified that that's available and maybe towards -- I would think that our ability to place all of our NdPr outside China is dependent upon the speed with which the downstream industry develops. And so I think there's something like 7 different magnet projects in the U.S. at present. Some of them will never see the light of day. Others will come to market. We've got the projects that we're partnering with, particularly in the Korean metal and magnet making projects. We are confident that they will come online. So we will increase our NdPr production as downstream processing increases. So hopefully, those projects which do successfully come to market will start producing sometime in late '27, early '28. We'll have a watching brief on those to make sure that we're matching our production to that capacity.
Jonathan Sharp: Okay. Great. And just second question. Congratulations on the very good...
Amanda Lacaze: You get 2 questions -- I'm sorry. Go on, Jonathan. I shouldn't have joke. Yes, go on.
Jonathan Sharp: Now I know you're still there. But as you do look to appoint the next CEO, what are you looking at in terms of capabilities? Is it operational execution, marketing, maybe government relations? And should we expect any changes in the direction under the new CEO?
Amanda Lacaze: Look, you'll have to ask the Board that despite the fact that I think that I'm by far the most competent person to select the next CEO, the nonexecutive directors on our Board think they have the say, too. Anyway, I think that we have -- my job is to make sure that we have a business which is strong, which is resilient and which is able to continue to demonstrate the same sort of success that we've been able to demonstrate over my tenure. I would expect that given the quality of our track record that we would not be -- the Board would not be seeking to make an appointment, which would take the business in a fundamentally different direction. Sorry, everybody. I've just got a message that says that there are 7 more questions in the queue, and it's 10:54. So please, can we just have 1 question each so that we can try to give everybody a chance to ask a question.
Operator: Your next question comes from Daniel Morgan with Barrenjoey.
Daniel Morgan: Just on the market, it's clearly improved. Spot prices are rallying, customer inquiries is increasing. I'd basically just like to circle back to how you plan to run the volume side of the business going forward. So can you lift volumes materially from here? When do you think you can run the system at 10.5? Or is rectification and power issues that probably meaning that in the short term, you're going to be kept at 8,000 to 9,000 tonnes per annum?
Amanda Lacaze: Daniel, good question. In the very short term, the 8,000 to 9,000 is probably right. In the short term, but not quite so very short term, we continue to be focused on the 10.5. 10.5 is roughly 30 tonnes a day. We know how we get that 30 tonnes a day, and we have many days where we are achieving the 30 tonnes a day, we're just not achieving it every day yet. And yes, that is primarily about Kalgoorlie and about the amount of feed that we're able to deliver into LAMP ex Kalgoorlie.
Operator: Your next question comes from Scott Ryall with Rimor Equity Research.
Scott Ryall: Amanda, on Slides 5 and 6 -- no, sorry, 5, you talked to how well the business was set up as an incumbent and with lots of capability and opportunities to expand into other areas. So I guess what you didn't say was that's your legacy, so congratulations. I'm wondering, just on a 3- to 5-year basis, given the excitement around rare earths in the last couple of years that has stepped up big time. How do you keep your staff and -- or protect your staff and protect your intellectual property, please, just in the context of your incumbency advantages?
Amanda Lacaze: Yes. I think that's a really intelligent question because many times, people forget the importance of people in the business. We talk about IP, and there is no doubt that some of it is scientific IP, which can be properly documented, et cetera. But there's huge value that comes from just every operator in the company actually knowing what their job is, and that's a form of IP as well. We're very focused on ensuring that we are an employer of choice, and I don't expect that to change when we transition to a new CEO because Lynas is so much more than a single person. Lynas, I know that I'm the figurehead, but Lynas is every person who works in the company. And so the care and -- the care for each other that is a feature of the way that we operate and our focus on achievement and excellence, I believe, will survive me. Our people continue to work at Lynas because they get satisfaction from their jobs. They know they're doing something which is valuable and that they are valued for doing it. And I think that, too, after 12 years will definitely survive me. So being an employer of choice, yes, it's about making sure that we pay well and all of those things. But it's mostly about making sure that when you go home at the end of the day, you can say, I made a difference today, and we work very hard to make sure all of our people can feel like that when they go home every day.
Operator: Your next question comes from Dim Ariyasinghe with UBS.
Dim Ariyasinghe: Can I just get an update on the LAMP license? So it's due to expire on Monday. It feels like it's maybe just a rubber stamp that you need. But in the unlikely case that it doesn't go ahead, what contingencies do you have? Can Kal step up to ensure that the rest of the quarter is okay? Yes, if that's one question, that's it.
Amanda Lacaze: Dim, I'm not sure that I've got a lot constructive to say about sort of the hypothetical of, let's say, we don't get sort of an extension on the license. I don't think that that's likely to happen. I think that the licensing environment, as we indicated, has changed. The new legislation went through and was gazetted at the beginning of December last year. It certainly should ensure that we're no longer in this sort of every 3 years, what's going to happen, but in a much more normalized licensing environment where if we meet sort of our requirements, we can reasonably expect that the license will continue. As we've indicated, we've done the things that we need to do. We've had the Atomic Energy Department has been in done its audit. We've received a very satisfactory rating, which is the highest rating available and we continue to run our operations safely for our people and our communities and the environment. So yes, would I have liked all of this to be resolved a month ago? Yes, but that's not the way the system works. But we will provide you with an update, I would expect within the next few days.
Operator: Your next question comes from Paul Young with Goldman Sachs.
Paul Young: Just this one should be pretty easy. I noticed that you've got a really good provisional pricing tailwind in the half of about $20 million. So your revenue beat the Street's expectations, and it was well above the cash receipts because of receivables increase in inventories, et cetera. But just on the provisional pricing tailwind, just to help us out going forward because you should actually see this benefit over the next 6 months as well, like a revenue tailwind on repricing of product you forward sold, but the price hasn't been locked down. Can you just help us just think about or just explain what your quotational pricing period is? Like as far as -- so we can look at -- we can actually just judge provisional pricing adjustments going forward?
Amanda Lacaze: I can't give you chapter and verse on that, Paul, because it is different by customer. And the provisional pricing mostly relates to sales which are made into Japan. Sojitz carries that inventory and does actually denominate certain inventory for certain customers, which is why sometimes the tail is longer than we might otherwise expect it to be. But I'll invite Gaudenz to speak to it as well, but I would think that we should have most of it find its way through the system sort of within the next 3 months. Gaudenz, do you want to add anything to that?
Gaudenz Sturzenegger: Yes, Paul, I think that's correct. You see it on the balance sheet receivable side already. But yes, it depends sale by sale also when the final sale is made to the customer. And that varies between 1 month and 3 months. Probably best you take -- if you want to model it, take about a 2 to 3-month lagging impact into consideration, then probably another 3 months before you see the cash really coming in or going out. I mean it's positive at the moment, has not always been like that, but we obviously enjoy the current setup, okay? I hope that helps.
Amanda Lacaze: A little bit more color, Paul, because I think it's an interesting question, a little bit more color. We basically invoice when it leaves our factory gate. We go through a process of then tolling it in our toll metal makers. And then it goes from there into the magnet makers. And that actual -- that's part of what drives the difference here. And that is, as Gaudenz said, it's at least a 2-month period that we're talking about before it finds its way into the magnet makers. So yes, for modeling purposes, I think that you could assume a 2 to 3 months sort of lag is reasonable.
Operator: Your next question comes from Austin Yun with Macquarie.
Austin Yun: A quick follow-up. Just looking at your term deposit, keen to understand how did you explain the budget for that figure? Should we assume that the remaining balance will be what you set aside minus working capital requirement set aside for the downstream...
Amanda Lacaze: Austin, I'm sorry, I have not -- you've just been garbled on my line. I don't -- can you start this question again, please? I can't understand what you're asking.
Austin Yun: Sorry. I'm keen to understand the thinking for this term deposit and the remaining cash for the next 12 months, would that be the amount you set aside for the ionic clay project in Malaysia and also the downstream plant, the capital requirement?
Amanda Lacaze: So that's basically a treasury question. So I'll let Gaudenz do that. I mean in terms of allocation into the different projects, we will disclose those as we finalize each of the projects. So we've disclosed the $180 million on the Heavy Rare Earths. We understand the profile of expenditure of that money and are managing it accordingly. But in general terms, treasury, I'll let Gaudenz say a few words to that.
Gaudenz Sturzenegger: Yes. There -- I think it's probably better to look at it as a very dynamic process. I wouldn't really draw conclusions as you try to do that this is really specifically for certain spendings later on. I think also the terms we have there in that category are between -- beyond 3 months, but shorter than 12 months. It's more interest optimization approach we have there. So I will not read too much into the figure as such. And overall, we try to have a balanced approach, a cautious approach, but obviously, at the same time, optimizing the interest income. And at the moment, some of the shorter durations are better than the longer one. So it's pretty mixed.
Operator: There are no further questions at this time. I'll now hand back to Ms. Amanda Lacaze for closing remarks.
Amanda Lacaze: Okay. Thank you very much, and thank you all for your participation today and the questions that you have asked. And as with, I think, every CEO, I would remind you that any day that ends in "y" is a good day for Lynas and Lynas shareholders. So I look forward to seeing many of you over the next week or so. Thanks. Bye.
Operator: That does conclude our conference for today. Thank you for participating, and you may now disconnect.