“The reduced profit recorded for the period reflected low market prices,” CEO Amanda Lacaze said in a statement today.

“We see the current challenges as short-term issues,” Lacaze said.

Shares of Lynas fell as much as 5.8% in Sydney after the announcement.

Last month, Australian billionaire Gina Rinehart increased her stake in the company to 8.31%, becoming its third-largest shareholder.

The miner’s performance indicates the market is still over-supplied, with rare earth oxide prices down due to strong output from China and its economic slowdown.

Lynas is one of the only rare earths producers that competes with the nation’s domination of the market.

The Australian miner reported net income of A$5.9 million (US$3.7 million) for the six months to Dec 31.

That compared with a consensus estimate of A$32.2 million. It won’t pay an interim dividend.

The US and allies such as Australia are trying to challenge China’s stranglehold by unlocking their significant deposits.

That plan has been hindered by the price decline that has complicated development of some new projects.

After peaking in February 2022, rare earths prices on a benchmark index in Shanghai had fallen almost 70% by March 2024. Still, they have since ticked up by about 30%.

“Market conditions remain unpredictable, and Lynas’ success will depend on its continued ability to balance growth ambitions with disciplined financial management,” Jefferies Equity Research analysts including Mitch Ryan said in a report.

Still, the company was “strategically positioned to capture any market strength as it continues to expand capacity and product offerings,” they added.

Lynas saw a slight increase in the unit cost of production during the period as its processing facilities in Western Australia and a refinery in Malaysia come online.

It’s also developing a processing plant in the US.