*

Lynas revenue of A$200.2 million misses consensus

*

Will start producing samarium in 1H 2026 calendar year

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Lynas notes strong demand from emerging customer base

(Adds CEO comments in paragraphs 5,11,16, analyst comment in

paragraphs 7-8, background in paragraphs 12-15)

By Melanie Burton

MELBOURNE, Oct 30 (Reuters) - First-quarter revenue at

Australia's Lynas Rare Earths ( LYSCF ) rose by 66% from a year

earlier, the company said on Thursday, but missed market

expectations, though it flagged strong demand from existing and

emerging customers for strategic metals.

Governments outside dominant rare earths producer China have

been scrambling to develop an alternative supply pipeline for

industries including automotive and defence as China has stepped

up export restrictions linked to the sector.

Lynas, the world's largest producer of rare earths outside

China, is leaning into the push by expanding its customer base,

and negotiating for higher prices, as it ramps up production

including that of the most valuable heavy rare earths.

Lynas posted sales revenue of A$200.2 million ($130.09

million) for the quarter ended September 30, up from A$120.5

million a year earlier but missing the Visible Alpha consensus

estimate of A$230 million. Shares traded little changed at

A$15.27 by midday.

"Market demand is strong, and we have a great deal of

flexibility in choosing to whom we sell and at what price," CEO

Amanda Lacaze said on a results call.

Lacaze said Lynas forecasts rare earths demand growth in the

high-single to low-double digits per year.

Australian brokerage Barrenjoey said Lynas missed its

revenue expectations because supply anxiety did not appear to

have boosted customer demand as much as it had anticipated.

"It would appear downstream demand was not as strong as we

had thought it would be and the ramp in Dy (dysprosium) and Tb

(terbium) being available for sale is a taking a tad longer,"

Barrenjoey analyst Daniel Morgan said in a note.

Dysprosium and terbium, which Lynas began producing earlier

this year, are among the most valuable of the rare earths. Lynas

said it has brought forward plans to start producing samarium in

the first half of next calendar year due to demand, from 2027.

Lynas' rare earth oxide output for the first quarter was

3,993 metric tons, compared to 2,722 tons reported last year. It

produced 9 tons of dysprosium and terbium.

"In terms of testing the market we have identified extremely

strong demand ... And we have identified a preparedness to pay

because of the scarcity of the material from outside China

sources," Lacaze said.

IMPROVING PRICES

The results came as Washington and Beijing this week reached

a framework for a trade deal that could pause planned U.S.

tariffs and delay Chinese export controls on critical minerals,

including rare earths, for a year, easing fears of supply

disruptions that had boosted the sector this year.

China processes more than 90% of the world's rare earths and

magnets and recently expanded export curbs including adding rare

earths processing equipment to its export control list.

Lynas said those restrictions would impact its business;

however, it has identified alternative supply sources for key

inputs should export restrictions go ahead.

Governments are still expected to help underpin development

of an alternative supply chain, via supporting deals containing

price floors. Australia has said it is considering price floors

but agreements have yet to materialise beyond a U.S. deal with

its largest rare earths producer MP Materials.

"MP was facing an existential crisis as a result of the

tariff and trade restrictions between China and the U.S., ...the

timely implementation of that deal was important," Lacaze said,

adding she was looking forward to hearing about outcomes on

policy settings from the recent G7 meetings in Canada.

In the meantime, the company is carefully managing

production rates and sales until "various governmental

agreements have been finalised," Lynas said in its earnings

statement.

The firm also continues to see "significant uncertainty"

over the future of its heavy rare-earths processing plant at

Seadrift, Texas. It is focusing on a build-out of a processing

plant in Malaysia, to satisfy East Asian demand, Lacaze said.

($1 = 1.5389 Australian dollars)