Lynas Rare Earths Ltd

ASX:LYC

Earnings Call Transcript 2023-Q2

[Operator]

Good day, and thank you for standing by. Welcome to the Lynas Rare Earths' Quarterly Results Briefing Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I'd now like to hand the conference over to Lynas. Please go ahead.

[Jennifer Parker, executive]

Thank you, and good morning. And welcome to the Lynas Rare Earths' quarterly briefing for the December 2022 quarter. Today's briefing will be presented by Amanda Lacaze. And joining Amanda are Gaudenz Sturzenegger, Chief Financial Officer; Pol Le Roux, Chief Operating Officer; Daniel Havas, VP, Strategy and Investor Relations; and Sarah Leonard, General Counsel and Company Secretary.

I'll now hand over to Amanda. Please go ahead, Amanda.

[Amanda Lacaze, executive]

Good morning, everybody. I hope to -- I guess I should start with Happy New Year. For those who celebrate Lunar or Chinese New Year, Gong Xi Fa Chai. I hope everybody had a really lovely festive season and have come back with enthusiasm and excitement for a great 2023.

So, I'm pleased to have launch today's quarterly results. There were -- relatively -- it was a relatively uneventful quarter, which was a delight after some of the challenges of the prior quarter, which, of course, we talked about in a lot of detail, including the catastrophic failure of water in Malaysia. We did have a few sort of hangover challenges from that at the beginning of the quarter, but we finished the quarter back as Lynas makes strides and look forward to being able to continue.

Both of our operational sites performed really well. Just as an interesting site, we had a record quarter at Mt Weld and we are making some very good progress on ensuring that we really are optimizing performance right through the value chain from mine to big bags at the edge of the land facility. We also made really excellent progress on all of our major projects. Just as a refresher, that includes our big project at Mt Weld, where we're expanding throughput by actually 4x, which expands our output over time by double.

We've got already bulk earthworks. Contractor has been mobilized. We've started the procurement of the long lead time items. That project is prioritized in a way that we're making the investments that are creating bottlenecks for our production today first. So, we will release those bottlenecks with our objective being that we will be able to sort of progressively sort of move production up rather than just jumping from today to the 1,000 tonnes a month, which is the target by the end of next year.

In addition to that, we are building our stockpile for the Kalgoorlie facility. It will initially be set with what we're describing as direct shipping ore, which is very high-grade material which we've segregated from the rest of the materials. So, this is not a constraint from the concentrator on our ability to actually build that inventory to feed the Kalgoorlie plant. Kalgoorlie itself, really, our project manager, she was telling me on Friday, it just is a fabulous time to be on site. I'm looking forward to being there next Monday when we will be in Kalgoorlie, importantly, signing a cultural agreement with traditional owners associated with our Mt Weld facility. But Grant tells me that every day, there is something new to look at and it is very exciting indeed to be operating at this time and seeing the huge progress, bearing in mind that it's still less than 12 months from receiving full approvals for that site. And we continue to work on our US processing facility making good progress on deliverables associated with that project.

And then, of course, in Malaysia, we had some significant development occurring to ensure that we can receive the mixed rare earth carbonate, which will arrive from -- which will -- sorry, I'm looking at the chat here which is saying that someone can't get a question in. So, I shouldn't look at those, should I? So in Malaysia, we've got a significant project to receive the mixed rare earth carbonate from the Kalgoorlie facility. But as with all of our projects, we will take the opportunity to improve a number of other elements of our processing facility, including in this instance, things like soda ash loading and unloading, because if we're going to be making an investment in the new building and new capability, then it makes sense for us to use that opportunity to continue to improve efficiencies in our operations.

So in terms of the business, the market continues to be very buoyant. Whilst the price was very stable through the quarter, it started to pick up in December and we continue to look into a market with strong demand and really very good pricing prospects for our business. And one of the other things, which I think we sometimes sort of underestimate is we're not just an NdPr business, the value which comes from selling our other materials is important within our business. And you can see this when you look at the average price received over the quarter that whilst the NdPr price was relatively flat, our average price actually lifted up and that was a consequence of both the SEG pricing, heavies pricing remains very strong, but also increasing in sales of higher value-added lanthanum and cerium materials.

So, a good quarter. We're doing everything we can to make sure that the quarter that we're in is going to be an even better quarter. My colleague, Pol, has a very popular saying within the business that we are much better than yesterday but much worse than tomorrow. And certainly, that's our objective is to ensure that we continue to improve. But a good quarter, pleased with the settings in the market, pleased with what we've been able to deliver in terms of production and sales and certainly very pleased with the progress on sort of really very significant projects.

So, with those just sort of general opening comments, I'm very happy to take any questions that people might have.

[Operator]

[Operator Instructions] Our first question comes from the line of Paul Young of Goldman Sachs.

[Paul Young, analyst]

Happy New Year as well, and hope you're all going okay. First question is on the realized pricing. So good kick up in the realized pricing for the other products, Amanda, as you mentioned. Just on the SEG pricing, the heavy pricing and the lanthanum, cerium, the improvement in product mix and pricing, do you expect that to continue over the next couple of quarters and into the medium term?

[Amanda Lacaze, executive]

I think that we think that the Heavy Rare Earths price remains very positive, and we would expect that, that will continue. And we would hope that we will continue to improve the contribution from our lanthanum and cerium materials as we increase the amount of high value-added materials that we sell.

[Paul Young, analyst]

Okay. All right. So, we should assume, for modeling purposes, a bit of a continuation on that dollar per kilo on the other -- the other products in that case.

Next question, Amanda, is on projects and some good progress on the Kalgoorlie cracking and leaching in the quarter. Just observing, I guess, again the pictures on some of the key items there and just sort of trying to match that with the 1st of July deadline, just wondering if you could just step through internally, or when you expect first carbonate production from Kalgoorlie? And just talk through maybe the ramp-up and just how that sort of matches again with discussions with the Malaysian Government? And just on that, if you can just maybe just talk through the new Malaysian Government, how they've been, how recent discussions, if you had some, have gone with respect to potentially extending the permit on the cracking and leaching uptime or operations, I should say, in Malaysia, beyond 1st of July sort of just to match with that, that ramp-up requirements from Kalgoorlie?

[Amanda Lacaze, executive]

Yes. So, Paul, that was a question of very many parts. And it would not surprise you to know that we have a huge amount of effort in the business focused on sort of this transitional period. If we take the situation in Malaysia, as I think we've indicated previously, it is a matter of public record disclosed by a previous minister that we have appealed for the removal of the 4 conditions that were applied 3 years ago to our operating items. Our position is very strongly that we have -- we run a low-risk operation. We are a lawful company, which is compliant with all regulations and we have never been involved in any sort of health or environmental incidents.

The most compelling data that we have is now our 10 years of safe operation in Malaysia. So of course, governments change, our advocacy has always been that decision should be made to ensure that we're treated fairly and equitably and that our performance is recognized. So, when the AELB that's [ does audits ] with our operations in Malaysia, we have consistently been rated as very satisfactory, which is the highest level which is available. And all that we seek from the government is the decisions that are fact-based, not actually made on the basis of some of the alarm statements from some activist groups, which even the IAEA has said, has no basis and scientific fact.

So, we continue to engage with both the regulators and also with the government. As recently as last month, we had a delegation from Malaysia come to visit our site in Kalgoorlie. So, we have never pretended that we can forecast timelines the governments may choose, but we are actively engaged with, as I said, both the government and the regulators. In terms of sort of feed on and ramp-up in Kalgoorlie, we had our own targets, which of course, are all about ensuring that we will be able to bring that facility online. But we are also looking to opportunities where we can ensure that we have sort of safety stock as required as we manage potentially a transition period.

[Paul Young, analyst]

Okay. Can I just clarify one thing? Is one of the options that you're planning for a transition period, it sounds like it is as far as having to run LAMP below capacity as Kalgoorlie ramps-up?

[Amanda Lacaze, executive]

Look, we've got a number of scenarios and we're preparing ourselves for all of them, right? The best possible scenario, if I may, we're running 2 facilities, which gives us a straight uplift in the ability in throughput right through to one where we are required to close down one facility and operate the other. So, we're managing a number of different scenarios. And it will be clear, long before the 1st of July, which of those we will be required to execute.

[Operator]

Our next question comes from the line of Daniel Morgan of Barrenjoey.

[Daniel Morgan, analyst]

The plant clearly exited December at a very strong run rate, and I think you said earlier that you're looking for Lynas next grade to be achieved, which is about 1,800 tonnes a quarter of NdPr. Is that what you anticipate for the next few months or next couple of quarters for your field throughput? Or is there any major maintenance or anything else that might impact being able to run at that rate?

[Amanda Lacaze, executive]

Not every month will be the same because, of course, some months have 31 days and some months have 28 days. But running at a roundabout 7,000 tonnes a year is always our objective and we're just pleased that we're at that full run-rate at present, but we are always sort of cautious about making strong predictions on this, given some of the impacts that external factors can have on the business.

[Daniel Morgan, analyst]

And just on Kalgoorlie, the plant which, obviously, I can see progress there. Just wondering your expectations once everything is in place when the plant is complete, how long do you think it takes to ramp up and commission the plant to full capacity?

[Amanda Lacaze, executive]

I think that, that will not be absolutely clear until we commence operations in that plant. Suffice to say that we have had a really strong commissioning team. We have our operational team, all in place already in Kalgoorlie. It's a residential team, running processes. We will have all of the equipment properly tested before we commence and we have our significant sort of experience of operating a plant of this type in Malaysia. So, we expect the ramp-up time will be assisted by that level of experience that we have. But at this stage, we won't be disclosing any specific timeline on that.

[Operator]

Our next question comes from the line of Al Harvey of JPMorgan.

[Alistair Harvey, analyst]

Just following up on licensing in Malaysia, I'm just trying to -- just want to confirm, which works are actually underway. So, my understanding is if there is a renewal for the entire facility due sometime around March 2023, and then the negotiations or your appeal on the restrictions put on cracking and leaching for July is occurring in parallel. Just kind of trying to get a sense of whether or not you think that those 2 could come concurrently and if we're still expecting that before March this year?

[Amanda Lacaze, executive]

Al, I've learned not to predict how either regulators or governments may choose to proceed, but you are right on that. We operate under an operating license in Malaysia. The AELB, we've had 5 of those issued over the period of time that we've been operating in Malaysia. And the AELB issues those licenses with -- well, we had a single set of conditions for the first, sort of, 7 years, 8 years of operation, and then we had sort of these additional conditions placed upon the operating license in March 2020.

So, our objective is to -- and our appeal is to have those conditions removed. However, those conditions are not effective until the beginning of July. So, one scenario may see us with our operating license renewed with the conditions in place. Another one may see us with the operating license renewed with the conditions removed. And as I said, we continue to engage both with the regulators and government and to prosecute our case very strongly for the fact that we have operated safely for 10 years under a set of operating conditions and there is no scientific basis for making a change to those.

[Alistair Harvey, analyst]

All right. Secondly, just a bit more detail on the water reliability issues. Just wondering if the improvement is a reflection of a better performance of the pipeline? Is it seasonality? Or is it some of the backup measures you put in place over the last couple of months or a combination? I just want to try and get a sense of, if and when we might see a return of water issues down the track.

[Amanda Lacaze, executive]

Yes. Well, the issue that we had in September was a catastrophic equipment failure. And so we haven't had sort of an equipment -- we haven't experienced an equipment failure of that magnitude in the time that we have been in Malaysia. It was a big pipeline that burst, and it was 10 -- I think it was 10 meters underground and it affected everybody, residential, industrial, everyone. So, it would be our hope and I'm sitting in a wooden table, so I am touching wood, but this will not occur again.

In terms of some of the other issues associated with our supplier pipe, there have been a variety of different issues over time, which we had generally been able to mitigate, which may be associated with the pumping station or another time we had an issue with the bund wall which failed. But generally, we've been able to mitigate those issues. But we continue to work on projects, which will see us not have to use as much water. I mean, this is consistent with best practice -- sustainability practices.

So, we certainly want to be doing that. And so that includes opportunities to recycle water and some rather exciting sort of further developments on that, but they are not short-term fixes. So, we do continue to have our pipeline to the local sort of pits, which fills up with water when it rains and it's rained a lot in the last 3 months. But pipe water supply has been consistent now across the quarter, and we really haven't had to rely on some of those other initiatives.

[Alistair Harvey, analyst]

Right. Maybe just a final one before I pass on. Just wanted to understand if there's any potential for you guys to provide a reserve update sometime this year on Mount Weld. I guess just really pretty keen on getting the split of contained rare earths and deposit and how that changes with depth. I guess we haven't seen a split out in a reserve or resource statement for a while. So is there any update there?

[Amanda Lacaze, executive]

Yes. Well, we will do -- at a minimum, we'll do a reserve update as part of our Annual Report because, of course, we are required to do that. We have a whole team working on -- sort of on defining the carbonatite on reserve or resource in the first instance. So that work continues. I don't expect that we will be finalizing that within the next 6 months. But in addition to that, we are doing a lot more drilling as part of preparation for our next mining cutback and to more accurately define the reserve. So when Lynas just started a decade ago, more than that, say, 14 years ago in Mt Weld, we had really good drilling in quite a small area of the ore body in, what we call, in the Central Lanthanide deposit. And we had a lot of other drill areas where it was relatively sparsely drilled. Now, we are progressively drilling through different areas to properly flesh out our understanding of the ore body.

The other thing which we are working on is, we have a 4% cut-off grade which, of course, is sort of pretty amazing compared to some of the other deposits which are being developed. And so we're doing some further work to really understand whether that -- which was set once again very early on in the process of development at the Mt Weld ore body, whether it is -- whether it remains the economic -- economically optimized to be -- have a cut-off grade at that number, or whether we should be looking at a different cutoff grade.

So, we do have a lot of work going on in terms of both geology and mining. And yes, we will be providing both resource or reserve updates, but we don't expect that we will have completed the carbonatite work by the time we do the next substantive update. But we believe that we will have substantive information related to the reserve as it is currently conceived. Does that make sense?

[Alistair Harvey, analyst]

Yes. I might come back with a follow-up. But I'll pass it on for now.

[Amanda Lacaze, executive]

Well, I'd be happy, Al, to sort of facilitate a discussion with our Mt Weld team to provide some more detail. I guess, suffice to say that as a business, we seek to always have a long-life reserve. And so the work that we're doing, drilling both within the current deposit and also at depth is all part of ensuring that we have that, that we maintain sort of that long life.

[Alistair Harvey, analyst]

Right. Yes, definitely love to be able to pick up brains [Technical Difficulty]. Just while I've got you, I might just throw in 1 last question. Just thinking about markets and Chinese production quotas. So, I assume we're probably going to get another -- a 6-monthly update pretty soon. Have you or the team got any views on whether they'll likely increase those, the output there, knowing that [ we increased that ] up by about 20% to 25% over the last couple of years.

[Amanda Lacaze, executive]

I might actually pass that over and let Pol answer that. He is much closer to that than I am.

[Pol Le Roux, executive]

Yes. Well, first, on the production quotas, you remember that last year combining first and second half, the production quotas led to around 20%, a bit more than 20% increase. And that was balanced with the demand increase. So that reflects a fairly stable price. Next production quotas are expected to be released after the lunar new year, but it's a bit like with any regulators, there is no -- no one knows what will be. I believe it will still be in line with the variation of demand, but that's all I can say on this.

[Operator]

Our next question comes from the line of Austin Yun of Macquarie.

[Austin Yun, analyst]

Congratulations on the strong quarter result. 2 questions from me, please. The first one is on the price realization. Just wondering if you could provide bit more color on that new lanthanum and cerium specialty products you developed. Like how much of the price premium can you get for this product.

I'll come back with the second one.

[Amanda Lacaze, executive]

Okay. Once again, I'd like to pass over to Pol for that because this is an area of passion for Pol.

[Pol Le Roux, executive]

Yes. It's a very complex question to answer. I would say that we focus on adding value to basically cerium product mostly and lanthanum as well, but cerium #1. And so it's -- you can check -- when you run the numbers, you can analyze the premium. As far as the substantive, we have a lot of work and a plan of development for lot more added value. But as usual, the more complex targets, you target the more time it takes. So, this will continue over the next, I would say, years.

But definitely, it's a very important KPI for us. And that's why we reinforced our R&D pool to develop a new product application in the cerium, basically, cerium area, which will continue to be in oversupply for quite a while. But for numbers, sorry, I can't give you numbers precisely. It's substantial.

[Austin Yun, analyst]

All right. The second one is on the cost inflation. Just wondering, Amanda, how are you managing the cost inflation pressures at Mount Weld and the Kalgoorlie project? I mean, in this reporting season, we see many companies reporting higher costs. So seems like this inflation pressure is kind of staying with us.

[Amanda Lacaze, executive]

Yes. So, we did provide an update last time on the fact that a combination of growth in scope and also cost escalations at Kalgoorlie or an update from 500 to -- I think it was 575 mill, but basically a 15% uplift, bearing in mind that, that was combination of both costs and scope changes in the facility. Yes, we see pressures across all of the business, but we're paid to manage those.

So, we focus on ensuring that we continue to deliver efficiencies. So if unit costs go up and they are unavoidable, well, our task is to implement projects, which will see us improve the efficiency of operations. Whenever we think about costs, we think about how do we do things better because if we do things better and we reduce waste, then costs will inevitably come down as a result.

So, we do have escalation of costs, but we also have improvements in efficiency and we've not had to take any sort of significant actions to drive cost out of the business, in fact, quite the opposite. We continue to grow our investment in the business because we're facing into such a strong growth market. So when we look at our costs, we certainly see 2 or 3 big contributors to cost escalation and at Mt Weld, of course, a huge one, those with energy and increase in diesel costs.

We are working on alternate energy solutions for our Mt Weld facility, which over time will drive sort of costs out of the business we believe. And in Malaysia, so for example, we've seen really significant increase in sulfuric acid prices, which had been stable for a very long period of time. Once again, it's not something which is avoidable in the short term, but continuing to enhance efficiency, continuing to improve recoveries will mitigate to some effect -- to some extent, the effect of those price increases on the business performance.

[Operator]

Our next question comes from the line of Reg Spencer of Canaccord.

[Reg Spencer, analyst]

I will start with Malaysia if I can. I presume you guys would have seen the press last week relating to a decision on the extension of the license conditions in Malaysia. That press referred to a change of decision by the government early next month. I'm not sure whether if you would be willing to comment on that, but can I have a [ tip of the ore asking you ] to comment on that?

[Amanda Lacaze, executive]

Oh, look, don't believe everything you read in the press. But in this instance, as we've disclosed previously, our operating license is due for renewal on the 2nd of March. So, we do expect that we will have some indications from the regulator with respect to that operating license renewals certainly no later than the 2nd of March.

[Reg Spencer, analyst]

Okay. Sticking with Malaysia again. In terms of [indiscernible], your overall concentrate in import, [ is that risk or benefit over the years ], such that regardless of the [Technical Difficulty]? Sorry, stuff there regardless [Technical Difficulty]?

[Amanda Lacaze, executive]

Sorry, Reg, regardless of what?

[Reg Spencer, analyst]

The outcome of the operating condition -- operating license conditions would provide you with enough concentrate to get you through the ramp up of Kalgoorlie. So, you're working now to build-up that concentrate over the next 6 months or [indiscernible]?

[Amanda Lacaze, executive]

No, we have a series of conditions associated, standard conditions associated with the license, which includes the amount that we can import, the quantity which can be stored on site at any given time. At various times, we have been able to get variations to that, particularly through the pandemic where we had sort of variability in the amount, which was delivered and when it was delivered. And we also have conditions associated with the amount that can be processed. We managed within all of those conditions. And so without trying to sort of make it too complex, as I said, Reg, there is a series of conditions. We managed to those conditions. And, yes, one of them is associated with the amount that we can import. And yes, it does reset on the 1st of January each year.

[Operator]

Our next question comes from the line of Dim Ariyasinghe of UBS.

[Dim Ariyasinghe, analyst]

Look, just a quick one from me. I was just hoping you can reconcile -- help me reconcile some of the numbers. So CapEx for this year, you've guided previously towards $600 million, and then there was a CapEx creep for Kal that you reported on last quarter. So that takes to $675 million. I'm just trying to reconcile that with the cash spend of $240 million for the half, do you expect the second half to be more heavily back weighted? Or could you just walk me through that?

[Amanda Lacaze, executive]

Yes. Sure. And I'm happy to let Gaudenz add a bit more on to this as well, but yes, this is cash. We're now committed almost fully in terms of purchase orders associated with the Kalgoorlie project. And so this is just a timing issue as to when it actually goes up. But notwithstanding guidance, if we don't have to pay something, we don't pay it just to stick with the timeline.

But, Gaudenz, maybe you'd like to say something more to the capital profile.

[Gaudenz Sturzenegger, executive]

I think on the CapEx, what you can really see is on the -- particularly on the cash side an increase in spend level, which obviously follows the commitment, [ the POs ] which are out in the market. I think the last quarter was above $140 million and the quarter before $100 million. So you see a clear trend. And I'm very sure we see the trend to continue. So, particularly, the next 2 quarters will be quite high, specifically in regards to the Kalgoorlie project, which logically makes sense. On the Mt Weld expansion program, we will see a ramp up as well, but on a much lower level at this point in time.

[Dim Ariyasinghe, analyst]

Right. Okay. Cool. And just when can we expect to get up to Kal and do more than -- drive by some of the works?

[Amanda Lacaze, executive]

Frankly, we have a huge number of contractors on site. We wouldn't even take you on to the site right now because it's just managing the traffic with the contractors on site is a challenge in and of itself. So, yes, I'll try and answer that, but I'll have Daniel come back to you with some estimates on timing. But it certainly won't be whilst we've got sort of hundreds of people actually building stuff. So it's going to be some months before we would be able to have visitors on site.

[Operator]

Our next question comes from the line of Paul Young of Goldman Sachs.

[Paul Young, analyst]

A few follow-ups from me. Just on your ex-Malaysian and actually downstream strategy. Just wondering if you could expand on the comments on the US refinery. I know you said that you made good progress on deliverables. Just wondering what that is, has construction actually started, have you selected the -- i.e., the site? And yes, just after a bit more information on the U.S. refinery progress.

[Amanda Lacaze, executive]

Yes. We've identified a site. It's on the Gulf Coast. We're working with at various levels of government on finalizing that position. We think that it's a very good site for the plant because it's within an already industrialized area, has good services, has access to very good and skilled labor. With respect to engineering -- detailed engineering and design, that's been completed, but now we are working with the outsourced engineering team.

I mean we think we've had some fairly challenging inflation of costs in Australia, as well in the US, in Spain, at Australian levels plus some. So, we have populated more of the teams with both internal and external resources. It's that stage where there is nothing much exciting to see, but all of the heavy-lifting in terms of sort of planning and design, development, all of those sorts of things, that's where we are right now. So it's not exciting for everybody outside, but quite exciting for the project team.

[Paul Young, analyst]

Yes. Okay. Understood. And just your comments around engagement or incoming inquiries some OEMs and non-China magnet facilities for offtake. That's really interesting. And I guess the question I have is around, of the 12,000 tonnes of NdPr you want to produce, how much actually is -- is actually not contracted? So, I guess outside of the Chinese and Japanese contracts.

[Amanda Lacaze, executive]

Okay. So, I'll just hand over to Pol to answer that question.

[Pol Le Roux, executive]

Well, I can make a very simple question -- answer. Since our production capacity currently is 600 tonnes a month, we don't contract over our capacity. So the day we are at 1,200 tonnes, that would be 600 tonnes a month additional to contract, because people want to sign a contract on the promise that you will someday produce. They want to see evidence.

Sometime they sign MoU with a company saying they will produce rare earths sometime in the future, but it won't go to a contract level. So the answer is very simple. And we just have a queue of OEMs and lots of discussion ongoing with them for securing the supply of rare earths. In addition to that, anyone who has a project for magnet making outside China, today comes to Lynas. So that's why -- because we are the only one supplying outside China. And so all-in all, we are not short of demand. I would have to say that we are short of supply, but that's my problem as well.

[Amanda Lacaze, executive]

So, Paul, the short answer is we don't sell anything in the spot market.

[Paul Young, analyst]

Yes, no, I understand that. Yes. Just from a volume perspective on percentage terms versus Lynas 2025, the upsized plant. What Pol just said is very helpful. Last question I have, Amanda, is just on -- I mean this industry, everything is developing so quickly. Every quarter from a downstream perspective, the magnet industry is changing very quickly and will change very quickly over the next couple of years from a perspective of government funding, but also involvement of OEMs, you see what MP Materials has done, but also new entrants across the value chain. Are you interested in -- is one of your things you're looking at potentially getting funding from OEMs or even actually getting involved in magnet making?

[Amanda Lacaze, executive]

At this stage, we don't have tech and funding. So, we're not specifically looking for additional funding sources. In terms of do we [Technical Difficulty] advance downstream activities, we have a continuing watching brief on that and have done quite a lot of work really on what are the opportunities, what that might look like, how could they be executed right now. And the last time we did sort of a full review on this, we can get a bigger bang for our buck for our shareholders by increasing output than we can buy diverting attention into some of the downstream activities. And we are -- one of the hallmarks of our success is that we focus on doing things, completing them and then moving to the next one. So right now, we have a very, very full agenda with the Mt Weld expansion, with Kalgoorlie, with the further development of the Malaysian facility and the US. But yes, we have our work ongoing with respect to downstream development, which we will brief at an appropriate time.

[Operator]

Our next question comes from the line of Al Harvey of JPMorgan.

[Alistair Harvey, analyst]

Maybe following up with Paul, just you mentioned Chinese quotas could come in line with demand growth. Just wanted to get a sense of where you guys are seeing your forecasts for demand growth in 2023 and then maybe out on a 5-year view, if you've had any substantial changes since you've last mentioned those things?

[Pol Le Roux, executive]

Okay. So short-term growth 2023 for us, we are more than fully booked with our existing contracts. And the growth especially in electric cars continue to be very strong, with a better -- slightly improved situation on the semiconductors supply, which has been cutting a bit of the growth last year. On the long run, definitely, this will continue. So, we're talking about the double-digit growth for the next 5 years at least, unless there is something like a global financial crisis that we experienced few years back.

The question being where will this demand come from, is it from China or is it from outside China? And that's the game that is being played at the moment. Who will be the leading country for electric cars? And there is a lot to do in the west to not lose this fight against China yet. And that is yet to be seen. We don't see -- we see a lot of announcements of magnet -- new magnet projects. So far, outside China, I have seen only one new factory in Vietnam, Shin-Etsu, but that's -- that's an existing magnet maker and that's a very excellent customer of Lynas. But that's the only one who did actually increase production outside China so far. So, we'll see.

[Operator]

[Operator Instructions]

[Amanda Lacaze, executive]

Okay. It sounds to me like we might have had all of the questions. So, we're about 5 minutes from the end. So if anybody else has a question now is a good time. Otherwise, I would once again thank you all for your interest and look forward to seeing you in person as we move through the year.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect.