Rare earths producer Lynas has warned governments to be "alert at all times" to the knock-on effects of the nickel meltdown as it joins the ranks of miners revealing a slide in profits.
Prices for critical minerals remain depressed with China controlling supply and enjoying a similar near-monopoly on rare earths needed for advanced manufacturing, electric cars and defence technology.
Lynas, the biggest producer of rare earths outside China, announced on Monday a 74 per cent slide in net profit to $39.5 million for the six months to December 31 amid industry uncertainty about jobs and refineries.
Chief executive Amanda Lacaze told an investor webcast Lynas was getting a premium for every kilogram of rare earths it sold, but was still pegged to the "inside China" price.
"It is really important for everybody who operates in a global industry not to keep their fingers crossed for the day that everything is magically in their favour," Ms Lacaze said.
"Our focus is on making sure that we are a low-cost producer and that we can make money even when the market is soft."
The company is juggling two West Australian facilities - a Kalgoorlie rare earths refinery and the massive Mt Weld mine - as well as Malaysian operations and Ms Lacaze said it would soon break ground on a project in the United States.
She said Lynas was also making contingency plans to replace sulphuric acid usually supplied by BHP's nearby nickel refinery, which is being considered for closure to ride out the battery mineral's slump.
"Governments need to be alert at all times to the fact the the minerals industry is an ecosystem," Ms Lacaze said.
BHP has been a source of sulphuric acid for processing in the Goldfields mining region for decades, including as the most cost-effective and lowest risk source for Lynas' Kalgoorlie works, she explained.
During a period of "sustained low pricing" Lynas will remain engaged with governments on meeting ambitions for sovereign supplies, she said.
Australian credentials are helping Lynas in the United States, which wants a reliable source outside China.
"The US, more than anywhere, has really understood in its legislation, the importance of not just constructing the facilities but ensuring they remain efficient and competitive on an ongoing basis," Ms Lacaze said.
She said there was "no change" to the plan to ramp up to a minimum of 7000 tonnes per annum at Kalgoorlie, but admitted it was "a fair way away" from intended output, known as nameplate capacity.
Ms Lacaze said the company had a strong cash balance of $686.1 million and reiterated 2024 would be a "transitional year" for the company.
Earnings before interest, taxes, depreciation, and amortisation fell more than two-thirds (67 per cent) to $62.6 million and revenue fell 37 per cent to $234.8 million.
Lightning strikes took out industrial power to the outback city of Kalgoorlie for weeks during summer, which cut production and distorted overall costs.
Lynas shares rose 4.8 per cent or 28 cents to $6.12 in afternoon trade.
