Strong rare earth prices have proved to be a boon for Lynas Corporation (ASX:LYC), which has seen its net profit after tax for the first half of the 2021 financial year rocket 944 per cent to $40.6m over the previous corresponding period.

Revenue has increased by 12 per cent to $202.5m while earnings before interest, taxes, depreciation, and amortisation (EBITDA) climbed by 82 per cent to $80.6m.

This is thanks to increased production of neodymium-praseodymium (NdPr) oxide that coincided with a rise in prices for the high value product, which is used to produce the permanent magnets that are used in electric vehicle motors.

Shares in the company were up 2.8 per cent to $5.82 as the rest of the market dived.

“Despite ongoing uncertainty in the global economy and logistics/supply chain systems due to the effects of the pandemic, rare earths market settings were favourable and pricing for rare earths materials improved,” managing director Amanda Lacaze said.

“We demonstrated our ability to capitalise on this upside during the period, with cost of sales maintained at $150.8m while achieving an increase in sales revenue to A$202.5 million.”

Lynas has laid the foundations for future growth, raising $425m during the period to fund its planned rare earths processing facility in Kalgoorlie and associated upgrades to its existing plant in Malaysia.

It has also committed to repaying the Australian Government’s JobKeeper subsidy and Malaysian wage subsidy that it received in the first half of the 2021 financial year.

Lynas Corporation (ASX:LYC) share price chart


Future rare earth producer

Lynas is not the only rare earth play with good news today.

Vital Metals (ASX:VML) is poised to become the first rare earths producer in Canada with the company announcing that it is on track to start production at its Nechalacho project in the Northwest Territories.

The ore sorter is awaiting delivery to the site next month while fabrication of feed hoppers, stackers and conveyors is complete and awaiting transport.

Mining is on track to begin in March and the company has started a drill program to define a mine plan for Stage 2 production from the Tardiff deposit, test three high-grade targets at the deposit and evaluate potential expansion of the T Zone by targeting two additional zones.

Vital is looking to produce 5,000tpa of rare earth oxides from Nechalacho by 2025 with potential for further expansion.

Vital Metals (ASX:VML) share price chart