Annual report
Page 1
Lynas Rare Earths Limited | 2026 Appendix 4E Appendix 4E (Listing Rule 4.2A.3) Lynas Rare Earths Ltd (ACN 009 066 648) and Controlled Entities RESULTS FOR ANNOUNCEMENT TO MARKET 30 June 2026 A$m 30 June 2025 A$m Movement A$m % Revenue from ordinary activities 977.9 556.5 421.4 76% Earnings before interest, tax, depreciation, amortisation and treasury charges (EBITDA) 386.0 101.2 284.8 282% Profit from ordinary activities after tax attributable to members 222.4 8.0 214.4 2,679% Net profit for the period attributable to Members 222.4 8.0 214.4 2,679% Dividend Information No dividends have been paid or proposed at 30 June 2026. Net Tangible Assets 30 June 2026 (cents) 30 June 2025 (cents) Net Tangible Assets per share 350.91 250.62 For the year ended 30 June 2026 Reporting Period: Year ended 30 June 2026 Comparative Reporting Period: Year ended 30 June 2025
Page 2
2026 Annual Report
Page 3
Contents Lynas Rare Earths acknowledges the Traditional Owners of the lands on which we live and work, across Australia. We acknowledge and value Lynas’ Aboriginal and Torres Strait Islander employees, partners and communities and pay respect to their Elders past and present. www.LynasRareEarths.com Chair and CEO’s Letter 2 Our Operations 7 Living our Values 7 Board of Directors 8 Senior Management Team 8 Directors’ Report 9 Sustainability Report (mandatory) 28 Directors’ Declaration 29 1. Strategy 30 2. Governance 38 3. Risk Management 41 4. Metrics and Targets 43 Sustainability Report (voluntary) 48 Remuneration Report – Audited 49 Directors’ Declaration 73 Auditor’s Independence Declaration 74 Independent Auditor’s Report 75 Year 1 Scope Limited Assurance Report 80 Financial Statements 85 Consolidated Statement of Profit or Loss and Other Comprehensive Income 86 Consolidated Statement of Financial Position 87 Consolidated Statement of Changes in Equity 88 Consolidated Statement of Cash Flows 89 Notes to the Financial Statements 90 Additional Information 136 Corporate Directory Back Cover
Page 4
1 Lynas Rare Earths Limited | 2026 Annual Report $977.9m Sales Re v enue $222.4m Net P r ofit After Tax $1,209m Cash and Short Term Deposits $178.3m Property, Plant Equipment and Capital Spend 25% W om en Employees 1156 Employees 7,260 tonnes Ready for sale NdPr production 13,089 tonnes Ready for sale REO production FY26 Key Figures
Page 5
2 www.LynasRareEarths.com2 Chair and CEO’s Letter Dear Shareholder, we are pleased to present the Lynas Rare Earths Annual Report for the 2026 financial year. FY26 Performance Lynas was well positioned to capitalise on strong market demand in FY26. This resulted in record revenue of $977.9m and a Net Profit After Tax (NPAT) of $222.4m. Rare earths market prices strengthened during the year, reflecting both increased demand and global government action. A record average annual selling price of A$80.7/kg Rare Earth Oxide (REO) was achieved across all rare earth products, reflecting improved market prices, an increased mix of heavy rare earth sales, and sales with pricing not linked to the market index. These strong FY26 results reflect the process improvements made to our operations and the continued development of our rare earths product suite, including separated heavy rare earth (HRE) oxides Dysprosium (Dy), Terbium (Tb) and Samarium (Sm). Ready for sale REO production increased to 13,089 tonnes (FY25: 10,462 tonnes), including 7,260 tonnes NdPr (FY25: 6,558 tonnes). While cost of sales increased, this largely reflected the higher fixed cost attributed to new facilities which are in commissioning and ramp up, as well as the higher cost of sourcing inputs outside China and cost escalation due to the current geopolitical environment. The average China domestic price of NdPr (VAT excluded) increased from US$55.0/kg in June 2025 to US$100.8/kg in June 2026. This was influenced by market demand and floor price agreements led by global governments, including agreements between Lynas and Japan Australia Rare Earths B.V. (JARE) for supply of rare earths to Japanese industry to 20381 and with the U.S. Government for supply to the U.S. industrial base over a four-year period2. These agreements will help to reduce price volatility for Lynas and enable continued growth and investment in our operations. An increase in closing cash and short-term deposits to $1,209.1m (FY25: $166.5m), aligns with the Company’s strong operational performance and the successful equity raise during the period. The equity was raised to help accelerate the Towards 2030 growth strategy which was announced in August 2025 to meet increased market demand for rare earths. The strategy includes both optimising existing assets and key growth pillars. Positioning operations for growth NdPr sales volume increased by 12% to 7,337 tonnes (FY25: 6,555 tonnes), with record NdPr production in the second half of the year, and total REO sales volume increased by 11% to 12,122 tonnes (FY25: 10,970 tonnes). “ Lynas was well positioned to capitalise on strong market demand in FY26.” 1 https://wcsecure.weblink.com.au/pdf/LYC/03066669.pdf 2 https://wcsecure.weblink.com.au/pdf/LYC/03068512.pdf
Page 6
3 Lynas Rare Earths Limited | 2026 Annual Report3 At Mt Weld, high efficiency mining operations continued during the period, producing sufficient feedstock to supply both Lynas Malaysia and the Kalgoorlie Rare Earths Processing Facility. Construction and commissioning of the Mt Weld expansion project was completed and ramp up of the new flowsheet continued during the year. As expected in the ramp up of a large-scale processing facility, some challenges were experienced during the year. This included issues with the ramp up of the new water recycle plant at Mt Weld and an ore variation that presented challenges to downstream processing. Significant work has been undertaken to address these challenges. Construction and commissioning of the Mt Weld hybrid renewable power station by Lynas’ power purchase agreement (PPA) partner Zenith Energy was completed in the first half of the year, with the power station fully operational since January 2026. Average renewable electricity content in the six months to June 2026 was 93%, well ahead of the targeted 70%. In Malaysia, first production of the heavy rare earth Samarium (Sm) oxide was achieved in March 2026. This is Lynas’ third separated heavy rare earth product, following Dysprosium (Dy) and Terbium (Tb) oxides, first produced in FY25. Initial customer orders for Samarium (Sm) oxide are expected to be fulfilled in the first quarter of FY27. In Kalgoorlie, the ramp up of the Kalgoorlie Rare Earths Processing Facility continued during the year and process modifications targeting quality and productivity improvements were completed. This included a continuous precipitation process which will enable design precipitation capacity and mixed rare earth carbonate (MREC) quality improvements. In keeping with Lynas’ sustainability focus, construction of the new on-site water recycle plant is also being completed. “ Construction and commissioning of the Mt Weld expansion project was completed.”
Page 7
4 www.LynasRareEarths.com Pleasingly, record NdPr production was achieved in the second half of FY26. This was achieved despite the ore variation issues which affected downstream processing productivity and the volume of finished products during the June quarter. As shareholders will be aware, the Lynas Malaysia operating licence was renewed for a period of 10 years, commencing 3 March 2026. This is a longer period than the previous three-year operating licences and provides increased investment certainty. Prioritising safe operations Safety continued to be a key priority in FY26 as we ramped up and integrated new flowsheets across our operating sites. The 12-month rolling lost time injury frequency rate (LTIFR) improved to 0.9 per million hours worked (FY25: 1.8). However, the 12-month total recordable injury frequency rate (TRIFR) increased to 4.1 per million hours worked (FY25: 3.6), primarily due to strains, sprains and overstress. There is a continued focus in FY27 on training to reduce injuries. FY27 training priorities include correct manual handling techniques, three points of contact on stairs and ladders and ground condition awareness Accelerating Towards 2030 The Towards 2030 growth strategy was announced in August 20253 to optimise performance from the Lynas 2025 capital investments and grow the business. An equity raising was successfully completed to support the delivery of the strategy. The equity raising comprised a $750 million institutional placement and a ~$182 million Share Purchase Plan for retail shareholders. The institutional placement attracted significant demand from both existing shareholders and new investors and we thank shareholders for their support. Chair and CEO’s Letter 3 https://wcsecure.weblink.com.au/pdf/LYC/02985269.pdf “ Pleasingly, record NdPr production was achieved in the second half of FY26.”
Page 8
5Lynas Rare Earths Limited | 2026 Annual Report During the year, progress was made on key growth pillars of the Towards 2030 growth strategy including: Optimise performance from Lynas 2025 capital investments • Updated 12-year availability and supply agreement with JARE announced in March 2026 includes firm offtake for 5,000 tonnes per annum NdPr with a US$110/kg NdPr floor price and an upside sharing arrangement when prices exceed US$150/kg NdPr, capped at US$10m/annum. Lynas will make available up to 7,200 tonnes per annum of NdPr to Japanese industry to 2038, subject to no opportunity loss to Lynas; • The agreement with JARE also includes firm offtake of 50% of all HRE oxides at prices and terms that represent no opportunity loss to Lynas. Lynas will make available to the Japanese market up to 75% of all HRE oxides produced by Lynas, subject to no opportunity loss to Lynas. Add resource and scale • Establishment of the resource development team and identification of potential new feedstock sources; • Scoping study for the development of the Mt Weld Carbonatite has been completed and a dedicated team established to progress the further stages of the feasibility assessment; and • MoU signed with Japan Australia Rare Earths B.V. (JARE) to establish a framework for cooperation across the rare earths value chain, particularly in relation to mineral exploration of rare earth elements and adjacent minerals. Increase downstream capacity • Announcement of an expanded heavy rare earths (HRE) separation facility at Lynas Malaysia4 that will increase HRE production capacity and meet customer needs for an expanded suite of separated HRE products; • First production of Samarium (Sm) oxide at Lynas Malaysia5, adding to Lynas’ separated HRE product range. Expand into the outside China metal and magnet supply chain • Following an MoU signed in July 20256, in July 20267 a long-term partnership agreement with JS Link, Inc was signed for the development of a rare earth permanent magnet factory in Kuantan, Malaysia by JS Link; • MoU signed with Noveon Magnetics in October 2025 to help support a scalable domestic U.S. supply chain for rare earth permanent magnets8; • Framework Agreement entered into between Lynas and LS Eco Energy in March 20269 to work towards a definitive agreement for a long-term metal processing arrangement at a new rare earth metal making facility to be constructed by LS Eco Energy in Vietnam. 4 https://wcsecure.weblink.com.au/pdf/LYC/03015215.pdf 5 https://wcsecure.weblink.com.au/pdf/LYC/03069968.pdf 6 https://wcsecure.weblink.com.au/pdf/LYC/02970284.pdf 7 https://wcsecure.weblink.com.au/pdf/LYC/03108378.pdf 8 https://wcsecure.weblink.com.au/pdf/LYC/03005309.pdf 9 https://wcsecure.weblink.com.au/pdf/LYC/03072369.pdf
Page 9
Concluding remarks Lynas is focused on capitalising on our unique position in the rare earths market to build value for shareholders. The team is focused on safely ramping up the Lynas 2025 capital investments and increasing production capacity to meet growing demand from new metal and magnet making projects globally. As shareholders are aware, during the year Amanda Lacaze, Lynas’ Chief Executive Officer and Managing Director announced her intention to retire from the role, effective from 30 June 2026. Amanda made an outstanding contribution during her 12 years at Lynas and we thank Amanda for her leadership and dedication to our people, our company and the industry. The Board is undertaking a global CEO search process and will update the market in due course. We thank all members of the Lynas team for their hard work and commit- ment during the year. To our shareholders, thank you for your continued support. We look forward to updating you as we progress our Towards 2030 strategy in the year ahead. John Humphrey Chair Pol Le Roux Interim CEO 6 www.LynasRareEarths.com Chair and CEO’s Letter
Page 10
7Lynas Rare Earths Limited | 2026 Annual Report Living our Values AUSTRALIA Kalgoorlie, WA: Rare Earths Processing Facility Lynas Malaysia: Integrated Rare Earths refinery MALAYSIA Mt Weld, WA: Tier 1 Rare Earths deposit, Concentration Plant Care Achievement DiversityExpertise Sustainability We care for and respect each other, our communities and the environment. We make sure we all go home safe and well. We are passionate about contributing to a sustainable future and green technologies. We are a multicultural company. We value and embrace diversity. We are driven to be the world’s best in Rare Earths and to earn the respect of our customers. We are resilient and committed. We overcome challenges to achieve our goals. Our Operations
Page 11
8 www.LynasRareEarths.com John Humphrey Chair BOARD OF DIRECTORS SENIOR MANAGEMENT TEAM Amanda Lacaze Managing Director & CEO (Retired 30 June 2026) Dr Vanessa Guthrie AO Non-Executive Director John Beevers Non-Executive Director Amanda Lacaze Managing Director & CEO (Retired 30 June 2026) Mimi Afzan Afza Vice President People & Culture Dato Sri Mashal Ahmad Vice President Malaysia Daniel Havas Vice President Strategy & Investor Relations Chris Jenney Vice President Sales & Market Development Sarah Leonard General Counsel & Company Secretary Pol Le Roux Interim Chief Executive Officer (commenced 1 July 2026) Jennifer Parker Vice President Corporate Affairs Gaudenz Sturzenegger Chief Financial Officer Grant Murdoch Non-Executive Director Philippe Etienne Non-Executive Director Kathleen Bozanic Non-Executive Director
Page 12
9Lynas Rare Earths Limited | 2026 Annual Report Directors’ Report Lynas Rare Earths Limited ACN 009 066 648 ABN 27 009 066 648 Date of Incorporation 23/5/1983 Registered in WA 100% Lynas Services Pty Ltd ACN 103 936 232 Date of Incorporation 3/3/2003 Registered in Victoria 100% Mt Weld Holdings Pty Ltd ACN 073 998 106 Date of Incorporation 15/5/1996 Registered in WA 100% Mt Weld Mining Pty Ltd ACN 053 160 400 Date of Incorporation 29/7/1991 Registered in NSW 100% Lynas Kalgoorlie Pty Ltd ACN 053 160 302 Date of Incorporation 29/7/1991 Registered in NSW 100% Lynas OpCo Pty Ltd ACN 698 224 583 Date of Incorporation 19/5/2026 Registered in WA 0.01% 100% Lynas Africa Holdings Pty Ltd ACN 148 189 511 Date of Incorporation 13/1/2011 Registered in Victoria 100% Lynas Africa Limited Malawi Company No 8409 Date of Incorporation 12/7/2007 Registered in Malawi 99.99% 100% Lynas Malaysia Sdn Bhd Malaysian Company No 200601032530 Date of Incorporation 6/11/2006 Registered in Malaysia 100% Lynas France SAS Reg Number: 988 051 884 Date of Registration 01/7/2025 Registered in France 100% Lynas USA LLC Date of Incorporation 24/6/2019 Registered in Delaware, USA The Board of Directors (the “Board” or the “Directors”) of Lynas Rare Earths Limited (the “Company”) and its subsidiaries (together referred to as the “Group”) submit their report for the year ended 30 June 2026. In order to comply with the provisions of the Corporations Act 2001, the Directors’ report follows. CORPORATE INFORMATION Lynas Rare Earths Limited is limited by shares and is incorporated and domiciled in Australia. The Group’s corporate structure is as follows:
Page 13
10 www.LynasRareEarths.com Directors’ Report DIRECTORS The names and details of the Company’s Directors who were in office during or since the end of the financial year are as set out below. All Directors were in office for this entire period unless otherwise stated. John Humphrey LLB Non-Executive Director Mr Humphrey joined the Company as a Non-Executive Director on 15 May 2017 and was appointed Chair on 29 November 2023. His key areas of expertise include mergers and acquisitions, corporate finance and corporate governance. Mr Humphrey is a senior consultant to Mallesons (previously King & Wood Mallesons). He was the Dean of the Faculty of Law at Queensland University of Technology from January 2013 until June 2019. He was a Senior Partner at Mallesons between 1998 and 2012 and a Partner at Corrs Chambers Westgarth between 1980 and 1998. He is an experienced Non-Executive Director having previously been Chairman and a Non-Executive Director of Spotless Group Holdings until 31 January 2021 and Chairman and Non-Executive Director of Auswide Bank Limited (formerly Wide Bay Australia Limited) until 31 December 2020. He was appointed as Chairman and a Non-Executive Director of Titles Queensland in August 2021 and he has previously served as Chairman and Non-Executive Director of Horizon Oil Limited and Villa World Limited, Deputy Chairman of Mallesons. Mr Humphrey has also been a Non-Executive Director of Cromwell Property Group, Downer Group Limited, and Sunshine Broadcasting Group Limited and served as a member of the Australian Takeovers Panel. He is a member of the Australian Institute of Company Directors. Mr Humphrey is a member of the Nomination, Remuneration and Community Committee and a member of the Audit, Risk and ESG Committee. Amanda Lacaze BA, MAICD (retired 30 June 2026) Managing Director Ms Lacaze retired as Managing Director and Chief Executive Officer (CEO) of the Company on 30 June 2026 after 12 years in the role. Ms Lacaze has more than 25 years of senior operational experience to Lynas, including as Chief Executive Officer of Commander Communications, Executive Chairman of Orion Telecommunications and Chief Executive Officer of AOL|7. Prior to that, Ms Lacaze was Managing Director of Marketing at Telstra and held various business manage- ment roles at ICI Australia (now Orica and Incitec Pivot). Ms Lacaze’s early experience was in consumer goods with Nestle. Ms Lacaze is a member of Chief Executive Women and the Australian Institute of Company Directors. She was a Non-Executive Director of ING Bank Australia until 30 May 2021. Ms Lacaze holds a Bachelor of Arts Degree from the University of Queensland and postgraduate Diploma in Marketing from the Australian Graduate School of Management. John Beevers, Bachelor of Engineering, Master of Business GAICD Non-Executive Director Mr Beevers joined the Company as a Non-Executive Director on 1 May 2023. Mr Beevers is an experienced Board director with over 30 years’ experience in the resources, mining services and chemical industries. He has broad international experience in operations and leadership, including as CEO of Orica Mining Services and Managing Director and CEO for Groundprobe. Mr Beevers is currently a Non-Executive Director of Orica Limited and Syrah Resources Limited. He is a graduate of the Australian Institute of Company Directors. Mr Beevers is a member of the Nomination, Remuneration and Community Committee and a member of the Health, Safety and Environment Committee.
Page 14
11 Lynas Rare Earths Limited | 2026 Annual Report Philippe Etienne MBA, BSc (Phys) (Pharm) GAICD Non-Executive Director Mr Etienne joined the Company as a Non-Executive Director on 1 January 2015. He is Non-Executive Director of Aristocrat Leisure Limited. Mr Etienne previously held the role Non-Executive Director and Chair of Cleanaway Waste Management Limited (retired 30 June 2026). Mr Etienne is also a former Non-Executive Director of Sedgman Limited and the former Managing Director and Chief Executive Officer of Innovia Security Pty Ltd. Previously, he was the Chief Executive Officer of Orica Mining Services and was a member of Orica Limited’s Executive Committee. Mr Etienne is a member and graduate of the Australian Institute of Company Directors. His career includes senior executive positions with Orica in Australia, the USA and Germany including strategy and planning and responsibility for synergy delivery of large scale acquisitions. Mr Etienne is the Chair of the Health, Safety and Environment Committee and a member of the Audit, Risk and ESG Committee. Dr Vanessa Guthrie AO, Hon DSc, PhD, BSc (Hons) FAICD Non-Executive Director Dr Guthrie AO was appointed as a Non-Executive Director on 1 October 2020. Dr Guthrie has qualifications in geology, environment, law and business management including a PhD in Geology and over 30 years’ experience in the resources sector. Dr Guthrie is currently Chair of IGO Limited (appointed 1 December 2025 and chair from 1 January 2026), a Non-Executive Director of Santos Limited and Cleanaway Waste Management Limited (from 1 February 2026) and Deputy Chair of Cricket Australia. Dr Guthrie was formerly Chancellor of Curtin University, and a Director of Orica Limited, Adbri Limited, North American Construction Group Limited, and Tronox Holdings plc. Dr Guthrie was the former Managing Director and CEO of Toro Energy Limited. Dr Guthrie is a Fellow of the Australian Institute of Company Directors, the Australasian Institute of Mining and Metallurgy and the Academy of Technological Sciences and Engineering. She was appointed an Officer of the Order of Australia in 2021 in recognition of her contribution to the minerals and resources sector. Dr Guthrie is Chair of the Remuneration, Nomination and Community Committee (since 29 November 2023) and a member of the Health, Safety and Environment Committee. Grant Murdoch M COM (Hons), FAICD (Life), FCA Non-Executive Director Mr Murdoch joined the Company as a Non-Executive Director on 30 October 2017. Mr Murdoch has more than 38 years of chartered accounting experience. From 2004 to 2011, Mr Murdoch led the corporate finance team for Ernst & Young Queensland and was an audit and corporate finance partner with Deloitte from 1980 to 2000. Mr Murdoch has extensive experience in providing advice in relation to mergers, acquisitions, takeovers, corporate restructures, share issues, pre-acquisition pricing due diligence advice, expert reports for capital raisings and initial public offerings. Mr Murdoch is currently the Non-executive Chaiman of Eagle Street Associates Pty Ltd (appointed 1 July 2024). He was previously a Non-Executive Director and chair of the audit committee of Auswide Bank Ltd (resigned 17 February 2025), director and the chair of the audit committee for OFX Limited, ALS Limited, Redbubble Limited and QIC. He was also a former senator of the University of Queensland (as well as chair of the risk committee and member of the finance committee). He is an adjunct professor at the University of Queensland Business School. Mr Murdoch has a Master’s degree in Commerce (Honours) from the University of Canterbury, New Zealand, is a graduate of the Kellogg Advanced Executive Program and the Advanced Leadership Program at Northwestern University. He is a fellow of both the Institute of Chartered Accountants in Australia and New Zealand and of the Australian Institute of Company Directors. Mr Murdoch was the Chair of the Audit, Risk and ESG Committee until 28 February 2026 and a member of the Nomination, Remuneration and Community Committee.
Page 15
12 www.LynasRareEarths.com Directors’ Report Kathleen Bozanic, BCom, ANZCA, GAICD (Appointed 17 October 2025) Non-Executive Director Ms Bozanic has over 30 years’ experience as a finance professional in the resources sector. She is currently Non-Executive Chair of WA1 Resources Limited, Non-Executive Director of Rugby Australia and the UWA Business School, and a member of the University of Western Australia Senate. Previously, Ms Bozanic served as Non-Executive Director and Chair of the Audit and Risk Committee of IGO Limited prior to being appointed as Chief Financial Officer of IGO Limited. She was also previously a Non-Executive Director of DRA Global Limited, Great Southern Mining Limited, Rugby WA and Western Australian Department of Health, Child and Adolescent Health Service, a partner at Deloitte and has held senior positions with BGC Contracting, Atlas Iron Limited and Mt Gibson Limited. Ms Bozanic holds a Bachelor of Commerce (Accounting & Finance), is a member of the Institute of Chartered Accountants, Australian and New Zealand and Chief Executive Woman and is a graduate of the Australian Institute of Company Directors (GAICD). She was also previously a Registered Company Auditor in Australia. Ms Bozanic is the Chair of the Audit, Risk and ESG Committee and a member of the Nomination, Remuneration and Community Committee as of 1 March 2026. INTERIM CHIEF EXECUTIVE OFFICER Pol Le Roux Mr Le Roux was appointed as Interim CEO of Lynas Rare Earths on 1 July 2026 following the retirement of Amanda Lacaze. Previously he was Chief Operating Officer responsible for Lynas’ operations in Western Australia and Malaysia as well as Supply Chain, Major Projects, Health, Safety & Environment and Research and Innovation. COMPANY SECRETARY Sarah Leonard Ms Leonard is an experienced General Counsel and a leading resources and infrastructure lawyer. She was previ- ously the Group Legal Counsel at Monadelphous Group Limited, an ASX listed contractor in the resources sector. In that role, she was responsible for governance, compliance and regulatory matters in relation to the Group. Prior to her role as Group Legal Counsel, Sarah was a partner at Corrs Chambers Westgarth in the construction and infrastructure team. REMUNERATION OF KEY MANAGEMENT PERSONNEL Information about the remuneration of key management personnel is set out in the remuneration report of this Directors’ Report. The term ‘key management personnel’ refers to those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including any Director of the Company. DIRECTORS SHAREHOLDINGS As at the date of this report, the Directors’ shareholdings are consistent with the shareholdings table described in Section J(i) of the remuneration report. NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES The principal activities of the Group are: • Integrated mining of rare earth minerals in Australia and minerals processing in Australia and Malaysia; and • Development of rare earth deposits.
Page 16
13 Lynas Rare Earths Limited | 2026 Annual Report SIGNIFICANT CHANGES IN STATE OF AFFAIRS Except as disclosed in the review of operations, the factors and business risks that affect future performance and the subsequent events, there have been no significant changes in the state of affairs of the Group during the current financial year. PERFORMANCE REVIEW The Directors together with Management monitor the Group’s overall performance including development and implementation of the strategic plan and the operating and financial performance of the Group. REVIEW OF OPERATIONS Financial highlights Lynas Rare Earths Limited (Lynas) recorded a Net Profit After Tax (NPAT) of $222.4m for the 2026 financial year, a significant improvement on FY25. Annual revenue increased to a record $977.9m as a result of increased NdPr sales volume, higher selling prices due to improvements in the NdPr market price and an increasing share of sales independent of the market index. An increase in closing cash and short term deposits of $1,209.1m (30 June 2025: $166.5m) at 30 June 2026 aligns with the conclusion of major capital projects as part of the Lynas 2025 growth initiative, an increase in the average selling price across all rare earth oxides, in particular the NdPr family, and a successful capital raise during the period. FY26 A$m FY25 A$m Movement A$m % Net Sales Revenue 977.9 556.5 421.4 76% Cost of Sales (585.5) (426.7) (158.8) 37% Gross Profit 392.4 129.8 262.6 202% Net Profit Before Tax 256.1 9.7 246.4 2,540% Net Profit After Tax 222.4 8.0 214.4 2,679% Sales volumes FY26 t REO FY25 t REO Movement t REO % Sales volume total (t REO) 12,122 10,970 1,152 11% Sales volume NdPr (t) 7,337 6,555 782 12% NdPr contribution to total sales 61% 60% Cash and Asset movements 30 June 26 A$m 30 June 25 A$m Movement A$m % Cash and Short-term Deposits 1,209.1 166.5 1,042.6 626% Net Assets 3,490.4 2,352.7 1,137.7 48% Market Capitalisation 18,177.4 8,054.2 10,123.2 126%
Page 17
14 www.LynasRareEarths.com Directors’ Report Operational highlights Lynas strengthened its balance sheet during the year through strong operational results and the completion of an equity raising. The equity raising will support the Company’s strong growth agenda through the Towards 2030 growth strategy which was announced in August 20251 and progressed during the period. Towards 2030 sets out Lynas’ plan to optimise performance from the Lynas 2025 capital investments which were largely completed in 2025 and progress new growth opportunities. The equity raising comprised a $750 million institutional placement and a ~$182 million Share Purchase Plan for retail shareholders. The institutional placement attracted significant demand and support from both existing shareholders and new investors. The successful completion was announced the following day. The Share Purchase Plan also received strong support from eligible shareholders and Lynas exercised its discretion to accept all valid applications. As a result, the Share Purchase Plan increased to ~$182 million from the initial target of $75 million. Highlights from operations included: • Annual revenue increased to a record $977.9m from $556.5m in FY25; • Ready for sale REO production increased to 13,089 tonnes, including 7,260 tonnes NdPr, up from 10,462 tonnes in FY25, including 6,558 tonnes NdPr; • Record average annual selling price across all rare earth products of A$80.7/kg • Lynas Malaysia operating licence renewed for 10 years2; • Completed construction and commissioning of the Mt Weld expansion project and ramped up new flowsheet; • Completed construction and commissioning of the Mt Weld hybrid renewable power station ahead of schedule, achieving average 93% renewable electricity production in 2H FY26, well above the target of 70%. On 10 March 2026, Lynas and JARE announced an updated 12-year availability and supply agreement which builds on the success of this partnership over the past 15 years. The updated agreement includes: • Firm offtake for 5,000 tonnes per annum NdPr with a US$110/kg NdPr floor price. Lynas will also make available up to 7,200 tonnes per annum of NdPr to Japanese industry to 2038, subject to no opportunity loss to Lynas; • An upside sharing arrangement when prices exceed US$150/kg NdPr, capped at US$10m/annum; • Lynas will make available to the Japanese market up to 75% of all HRE oxides produced by Lynas, subject to no opportunity loss to Lynas with a firm offtake of 50% of all HRE oxides at prices and terms that represent no opportunity loss to Lynas; • Volumes and prices of NdPr and HRE which are supplied to customers will be agreed by Lynas, JARE and each customer. The updated agreement will ensure continued supply of these strategically important materials for Japanese industry and the implementation of fair market pricing as part of the agreement will reduce price volatility for Lynas and enable continued growth and investment in our operations. Following the launch of the Towards 2030 growth strategy, Lynas progressed key growth pillars including: • Optimise performance from Lynas 2025 capital investments: Updated 12-year availability and supply agreement with JARE for Japanese industry announced March 2026, includes firm offtakes and US$110/kg NdPr floor price; • Add resource and scale: Establishment of the resource development team and identification of potential new feedstock sources; scoping study for the development of the Mt Weld Carbonatite has been completed and a dedicated team established to progress the further stages of the feasibility assessment; and an MoU signed with Japan Australia Rare Earths B.V. (JARE) to establish a framework for cooperation across the rare earths value chain, particularly in relation to mineral exploration of rare earth elements and adjacent minerals; • Increase downstream capacity: Announcement of an expanded heavy rare earths (HRE) separation facility at Lynas Malaysia3 that will increase HRE production capacity and meet customer need for an expanded suite of separated HRE products; first production of Samarium (Sm) oxide at Lynas Malaysia4, adding to Lynas’ separated Dy and Tb products which were first produced in FY25; 1 https://wcsecure.weblink.com.au/pdf/LYC/02985269.pdf 2 https://wcsecure.weblink.com.au/pdf/LYC/03063279.pdf 3 https://wcsecure.weblink.com.au/pdf/LYC/03015215.pdf 4 https://wcsecure.weblink.com.au/pdf/LYC/03069968.pdf
Page 18
15 Lynas Rare Earths Limited | 2026 Annual Report • Expand into the outside China metal and magnet supply chain: Following an MoU signed in July 20255, in July 20266 a long-term partnership agreement with JS Link, Inc was signed for the development of a rare earth permanent magnet factory in Kuantan, Malaysia by JS Link; MoU signed with Noveon Magnetics in October 2025 to support a scalable domestic U.S. supply chain for rare earth permanent magnets7; Framework Agreement entered into between Lynas and LS Eco Energy in March 2026 to work towards a definitive agreement for a long-term metal processing arrangement at a new rare earth metal making facility to be constructed by LS Eco Energy in Vietnam. During the year, raw materials and consumables inventory was proactively increased to safeguard against potential disruptions arising from geopolitics, global logistics conditions and global trade uncertainties. Lynas continues to develop the Mt Weld resource to meet forecast demand growth. This includes ongoing explora- tion activities within the Mt Weld orebody. Mt Weld High efficiency mining operations continued during the period, securing sufficient feedstock to supply both Lynas Malaysia and the Kalgoorlie Rare Earths Processing Facility, while optimising production costs in the long term. A scoping study for the development of the Mt Weld Carbonatite was completed during the year and a dedicated team has been established to progress the further stages of the feasibility assessment. Commissioning of the Mt Weld expansion project was largely completed in the December quarter of FY26 and the flotation process was running steadily at 70% of design capacity in December 2025. During the second half of FY26, the ramp up of the processing plant continued, with all equipment operational apart from a new fine grinding mill (Isamill) which is planned to be operational in FY27 and will assist with further improvement in recoveries. Construction focus is now on additional tailings storage facilities required to meet future needs. As expected in the ramp up of a large-scale processing facility, some challenges were experienced and resolved during the June quarter FY26. This included issues with the new Mt Weld water recycling plant and concentrate quality issues which affected the productivity of cracking and leaching in Kalgoorlie and Kuantan and the volume of finished products during the June quarter. Operating standards for upstream and downstream processing have now been improved to better manage the ore variation. Construction and commissioning of the Mt Weld hybrid power station by Lynas’ power purchase agreement (PPA) partner Zenith Energy was completed in the first half of the year and the power station has been fully operational since January 2026. Average renewable electricity content in 2H FY26 was 93%, well ahead of the targeted 70%. Lynas Malaysia During the year, enhancements and equipment installed as part of the Lynas 2025 growth plan were ramped up, including new enclosed furnaces that provide safety, productivity and GHG emissions reduction benefits. First production of Samarium (Sm) oxide was achieved in March 2026 and the customer qualification process commenced in FY26. This adds to Lynas’ separated heavy rare earth product suite which also includes Dy and Tb oxides first produced in FY25. As previously noted, Mt Weld concentrate quality issues affected the productivity of cracking and leaching in Kuantan and the volume of finished products during the June quarter. Operating standards for upstream and downstream processing have now been improved to better manage the ore variation. On 29 October 2025, Lynas announced a heavy rare earth (HRE) expansion project at the Lynas Malaysia advanced materials plant. The HRE expansion project is required to process various kinds of HRE feedstock in addition to Mt Weld feedstock in order to produce target volumes of the suite of separated HRE products. Purchase orders for critical equipment have been placed and the project scope has been reviewed to allow a staged, product-by- product start-up and to meet specific customers’ product purity and physical characteristic requirements. The next step will be the production of Gadolinium (Gd) (expected in early FY28), Yttrium (Y) (expected in early CY28) increase Samarium (Sm) production capacity (expected CY28) ,and then Lutetium (Lu). The estimated cost of the expanded HRE facility has increased from approximately A$180 million9 to approximately A$294m (including contingency). The increased cost is due to additional equipment to meet customers’ specific product purity and physical characteristic requirements, the higher cost of sourcing equipment outside China, and cost escalation due to the current geopolitical environment. 5 https://wcsecure.weblink.com.au/pdf/LYC/02970284.pdf 6 https://wcsecure.weblink.com.au/pdf/LYC/03108378.pdf 7 https://wcsecure.weblink.com.au/pdf/LYC/03005309.pdf 8 https://wcsecure.weblink.com.au/pdf/LYC/03072369.pdf 9 https://wcsecure.weblink.com.au/pdf/LYC/03015215.pdf
Page 19
16 www.LynasRareEarths.com Directors’ Report The Lynas Malaysia operating licence was renewed for 10 years commencing 3 March 2026. This is a substantially longer licence term than the previously issued 3-year licence terms, providing greater investment certainty for Lynas and for our rare earths supply chain partners and customers. As part of the operating licence, Lynas Malaysia is required to implement an alternative cracking process so that the facility no longer produces WLP residue with an activity concentration above 1 Bq/g after 2 March 2031, with the modification to commence based on an agreed plan by March 2028. Over the past 3 years, Lynas and local and international academic institutions have undertaken laboratory-scale research into modifications to the cracking process. Lynas is now progressing with plans for an industrial pilot trial, together with trials on the reuse of WLP. During the year the Department of Environment (DOE) Environmental Audit was successfully completed with 31 best practices, zero observations and zero non-compliances. Kalgoorlie The ramp up of the Kalgoorlie Rare Earths Processing Facility continued during the year and process modifications targeting quality and productivity improvements were completed. This included a continuous precipitation process which will enable design precipitation capacity and mixed rare earth carbonate (MREC) quality improvements. In keeping with Lynas’ sustainability focus, works to complete construction of the Kalgoorlie water recycle plant continue. The ramp up faced a number of challenges during the year, including power supply disruptions in the December quarter and flow on effects from the Mt Weld ore variation detailed earlier in this report. Following works by the external electricity provider, electricity supply stabilised from December onwards. Lynas continues to explore alternative energy solutions including off-grid electricity options. Lynas USA Lynas signed a binding Letter of Intent with the U.S. Government in March 2026 for the supply of approximately US$96 million of light and heavy rare earth oxides over a 4 year period. This supply of rare earth oxides is for the U.S. industrial base and broader industry development, particularly for research, development, test, and evaluation purposes related to permanent magnet production. Funding for the supply agreement has been reallocated from funds previously intended for the construction of a HRE facility in Texas which will no longer proceed. The floor price for supply of NdPr oxide will be US$110/kg. Health, Safety and Environment Lynas is committed to ensuring the Group’s operations in Australia and Malaysia are consistent with national and international safety and sustainability best practice. The 12-month rolling lost time injury frequency rate (LTIFR) as at 30 June 2026 was 0.9 per million hours worked, an improvement from the FY25 LTIFR of 1.8 per million hours worked. The 12-month total recordable injury frequency rate (TRIFR) at 30 June 2026 was 4.1 per million hours worked, higher than the FY25 TRIFR of 3.6 per million hours worked. The annual ISO surveillance audits were conducted at Mt Weld and Lynas Malaysia during the year and both sites were recertified for ISO 9001:2015 (Quality Management), ISO 14001:2015 (Environmental Management) and ISO 45011:2018 (Occupational Health and Safety Management). These sites have been certified since 2012. The Kalgoorlie operations remain in ramp up and as such, ISO certification has not commenced.
Page 20
17 Lynas Rare Earths Limited | 2026 Annual Report FINANCIAL AND OPERATIONAL PERFORMANCE Sales volume, revenue and costs Sales by tonnage and value FY26 FY25 FY24 FY23 FY26 Percentage change Sales volume (REOt) 12,122 10,970 12,158 16,014 10.5% Cash receipts from customers (A$m) 887.3 550.7 460.8 820.8 61.1% Sales revenue (A$m) 977.9 556.5 463.3 739.3 75.7% Average selling price (A$/kg) 80.7 50.6 38.1 46.2 59.4% Cost of sales (A$m) (585.5) (426.7) (330.6) (399.9) 37.2% The average selling price across all rare earth products of A$80.7/kg REO for the year was the highest on record. This reflects the continued focus on the highest value strategic customers, improved NdPr market prices, an increased mix of heavy rare earth sales and sales with pricing not linked to the market index. The cost of sales has increased with a higher fixed cost attributed to new facilities which are in commissioning and ramp up. Lynas has received strong customer enquiry for our new separated heavy rare earths (HRE) products. The Lynas pricing offer for Dysprosium (Dy) and Terbium (Tb) reflects the high demand for these products outside China rather than the market index which is based on inside China transactions. The first separated HRE oxides (Dy, Tb) were shipped to customers during the year and customer qualification commenced for Samarium (Sm) oxide, first produced in March 2026. The initial customer orders for Samarium (Sm) oxide are expected to be fulfilled in the first quarter of FY27. Customers continue to focus on securing sustainable, outside China supply chains due to geopolitics and export restrictions. This focus is supported by strategic Government actions to secure rare earth volumes to support critical manufacturing industries. Lynas is uniquely positioned to operate effectively in this evolving market environment as the only commercial producer of light and heavy rare earth oxides outside of China. On 10 March 2026, Lynas and JARE announced an updated 12-year availability and supply agreement which builds on the success of this partnership over the past 15 years. The updated agreement includes: • Firm offtake for 5,000 tonnes per annum NdPr with a US$110/kg NdPr floor price. Lynas will also make available up to 7,200 tonnes per annum of NdPr to Japanese industry to 2038, subject to no opportunity loss to Lynas; • An upside sharing arrangement when prices exceed US$150/kg NdPr, capped at US$10m/annum; • Lynas will make available to the Japanese market up to 75% of all HRE oxides produced by Lynas, subject to no opportunity loss to Lynas with a firm offtake of 50% of all HRE oxides at prices and terms that represent no opportunity loss to Lynas; • Volumes and prices of NdPr and HRE which are supplied to customers will be agreed by Lynas, JARE and each customer. The updated agreement will ensure continued supply of these strategically important materials for Japanese industry and the implementation of fair market pricing as part of the agreement will reduce price volatility for Lynas and enable continued growth and investment in our operations. In July 2026, a long-term partnership agreement with JS Link, Inc was signed for the development of a rare earth perma- nent magnet factory in Kuantan, Malaysia by JS Link, with an operating capacity of 3,000 tonne per annum of NdFeB permanent sintered magnets. Lynas made an investment of approximately A$50m in ordinary equity of JS Link, with the funds to be used to support the construction of the Malaysian magnet factory, with JS Link responsible for the remaining funding for the facility. Lynas will also supply rare earth materials to the JS Link magnet factory in Yesan, South Korea, and the planned factory in Malaysia at commercial prices under an exclusive supply arrangement until January 2038. Lynas entered into a Framework Agreement with LS Eco Energy, a subsidiary of LS Cable & System, in March 2026 and continues to work towards the definitive agreement for a long-term metal processing arrangement covering the use of Lynas’ rare earth products at a metal making facility to be constructed by LS Eco Energy in Vietnam. The partnership will complement Lynas’ existing metal tolling arrangements and develop additional rare earth metal making capacity to meet market demand for metallised light and heavy rare earths. In July 2026, Lynas entered into binding agreements with LS Eco Energy for the cross-subscription of convertible instruments to the value of approximately AUD 29m each.
Page 21
18 www.LynasRareEarths.com Directors’ Report Market prices The average China domestic price of NdPr (VAT excluded) increased from US$55.0/kg in June 2025 to US$100.8/kg in June 2026. Market dynamics remained positive during the year with significant demand for all rare earth oxides, including the newly launched Samarium (Sm), from the outside China magnet supply chain and original equipment manu- facturers (OEMs). Lynas continues to focus on accelerating the ramp up in HRE production capacity to meet the growing demand from the new metal and magnet maker projects globally. Production volumes Production volumes FY26 FY25 FY24 FY23 FY26 Percentage change Ready for sale production volume (REO) total (t) 13,089 10,462 10,908 16,780 25% Ready for sale production volume NdPr (t) 7,260 6,558 5,655 6,142 11% Increased production volumes of both REO and NdPr reflect the improvement in market conditions during FY26. Record NdPr production was achieved in the second half of FY26. Cash and cash flows FY26 FY25 Net operating cash inflows 318.8 104.2 Net investing cash outflows (846.7) (406.2) Net financing cash inflows/(outflows) 859.4 (45.3) Net cash flows 331.5 (347.3) Impact of foreign exchange 6.1 (10.0) Cash and cash equivalents 504.1 166.5 Operating cash flows increased driven by the increase in sales revenue. These operating cash flows include the payment of $19.6m to GSSB to construct and manage the Malaysian residue storage facilities. Net investing cash outflows included $707.6m in funds invested into short term deposits. A further $178.3m related to the completion payments for property plant and equipment in relation to the Mt Weld Expansion project and other capital projects. Finance cash inflows are highlighted by the net $914.3m capital raise undertaken in FY26. This has been offset by US$20.0m (A$29.5m) of principal repayments made on the JARE loan facility in line with the loan agreement.
Page 22
19 Lynas Rare Earths Limited | 2026 Annual Report Debt and Capital In A$m FY26 FY25 JARE loan 119.7 151.3 Total borrowings 119.7 151.3 Financial income 38.5 17.4 Financial expenses (29.8) (13.8) US$20.0m (A$29.5m) of principal repayments were made on the JARE facility during the year. The financial income strengthened as a result of increasing cash balances, largely due to the equity raising announced in August 2025. Financial expenses have increased as a result of increasing unwinding of the discounting of the restoration liabilities and completion of Lynas growth projects, resulting in a reduction in finance costs capitalised. During the year, $6.6m (FY25: $11.8m) of finance expenses were capitalised into the Mt Weld Expansion projects. There were no changes to the interest rate on the JARE facility during the period. During the year ended 30 June 2026, the Company issued shares as shown below: Number (000’s) Shares on issue 30 June 2025 935,447 Issue of shares pursuant to exercised performance rights 673 Issue of shares pursuant to capital raise 70,383 Shares on issue 30 June 2026 1,006,503 Performance rights At 30 June 2026, the Company had the following options and performance rights on issue: Number (000’s) Performance rights 4,046 Earnings per share For the year ended 30 June FY26 FY25 Basic earnings per share (cents per share) 22.15 0.85 Diluted earnings per share (cents per share) 22.06 0.85 Dividends There were no dividends declared or paid during the year ended 30 June 2026 (2025: nil) and no dividends have been declared or paid since 30 June 2026.
Page 23
20 www.LynasRareEarths.com Directors’ Report Risk management The Group takes a proactive approach to risk management. The Directors are responsible for ensuring that risks and opportunities are identified on a timely basis and that the Group’s objectives and activities are aligned with these risks and opportunities. The Group believes it is crucial for Directors to be part of this process, and has an established Audit, Risk and ESG Committee and a Health, Safety and Environment Committee. Lynas Rare Earths has a Risk Management Policy and an internal Risk Management Framework for oversight and management of material business risks. The Risk Management Framework forms part of internal controls and governance used to manage risk within the organisation. The Framework encompasses the key principles, oversight, structure, risk appetite and processes that apply to all risks across the business, including climate-change related risks and opportunities. The defined roles and responsibilities from the Board-level to Operational Units/Risk Owners to support the oversight on the risks and risk mitigating controls are outlined in the Framework. The Board Audit, Risk and ESG Committee oversees climate-related material risks and opportunities. The Committee meets at least two times annually or more frequently as required. FACTORS AND BUSINESS RISKS THAT AFFECT FUTURE PERFORMANCE Lynas operates in a changing environment and is therefore subject to factors and business risks that will affect future performance. Lynas identifies risks, then evaluates the inherent risk of an activity and the mitigation required. Risk assessments are updated by operations and management and material risks are reported to the Board of Directors. In FY26, Lynas continued to enhance risk management systems and processes, including by engaging external subject matter experts. Set out below are the principal risks and uncertainties that could have a material effect on Lynas’ future results, both operationally and financially. It is not possible to determine the likelihood of these risks occurring with any certainty. In the event that one or more of these risks materialise, Lynas’ reputation, strategy, business, operations, financial condition and future performance could be materially and adversely affected. There may also be other risks that are currently unknown or are deemed immaterial, but which may subsequently become known and/or material. These may individually or in aggregate adversely affect Lynas. 1. Operational risks 1.1 Rare earth prices Lynas’ revenue is affected by market fluctuations in rare earth prices. This is because the product prices used in the majority of Lynas’ sales are calculated by pricing formulae that reference published pricing for various rare earths materials. The market price has been volatile in the past because it is influenced by numerous factors and events that are beyond the control of Lynas. These include: • Supply side factors: Supply side factors are a significant influence on price volatility for rare earth materials. Supply of rare earth materials is dominated by Chinese producers. The China Central Government regulates production via quotas and environmental standards. Over the past few years, there has been significant restructuring of the Chinese market in line with China Central government policy. However, periods of restricted supply, over supply or speculative trading of rare earths can lead to significant fluctuations in rare earth pricing. • Demand side factors: Demand side factors are also a significant influence on price volatility for rare earth materials. Demand for end-products that utilise Lynas’ rare earths including internal combustion vehicles, hybrid vehicles, electric vehicles and electronic devices fluctuates due to factors including global economic trends, regulatory developments and consumer trends. • Geopolitical factors: Recently rare earths have received significant attention for geopolitical reasons, including as a result of global trade tariffs and restrictions, and the global focus on supply chain resilience.
Page 24
21 Lynas Rare Earths Limited | 2026 Annual Report Lynas’ approach to reducing pricing volatility for customers includes: • Securing a floor price for rare earth oxides through strategic partner agreements; • Promoting fixed pricing to some customers, set for periods relevant to customer operations; • Developing long term contracts that aim to reduce price variations for end users and OEMs such as car makers and wind turbine manufacturers; • Implementing some pricing agreements independent of the market index. Strong rare earth prices, as well as real or perceived disruptions in supply, may create economic incentives to identify or create alternate technologies that ultimately could depress future long-term demand for rare earths. This may, at the same time, incentivise the development of additional mining properties to produce rare earths. If industries reduce their reliance on rare earth products, the resulting change in demand could have a material adverse effect on Lynas’ business. In particular, if prices or demand for rare earths were to decline, this could impair Lynas’ ability to obtain financing for current or additional projects and its ability to find purchasers for its products at prices acceptable to Lynas. It is impossible to predict future rare earths price movements with certainty. Any sustained low rare earths prices or further declines in the price of rare earths, including as a result of periods of over-supply and/or speculative trading of rare earths, will adversely affect Lynas’ business, results of operations and may impact its share price and its ability to finance planned capital expenditures, including development projects. 1.2 Market competition Lynas Rare Earths supply contracts and profits may be adversely affected by the introduction of new mining and separation facilities and any increase in competition in the global rare earths market, either of which could increase the global supply of rare earths. If this is at a rate faster than demand growth it could potentially lead to lower prices. 1.3 Exchange rates Lynas is exposed to fluctuations in the US dollar as all sales are denominated in US dollars. Lynas borrows money and holds a portion of cash in US dollars, which provides Lynas with a partial natural hedge. Accordingly, Lynas’ income from customers, and the value of its business, will be affected by fluctuations in the rate by which the US dollar is exchanged with the Chinese Renminbi and the Australian dollar. Lynas is exposed to fluctuations in the Malaysian ringgit (MYR), which is the currency that dominates Lynas’ cash operating outflows in Malaysia. In addition, Lynas holds significant non-current assets in Malaysia which are denominated in MYR. Adverse movements in the Australian dollar against the US dollar and the MYR may have an adverse impact on Lynas’ financial position and operating results. The following table shows the average USD/AUD and MYR/AUD exchange rates over the past five years: 30 June 2026 30 June 2025 30 June 2024 30 June 2023 30 June 2022 USD/AUD $0.6785 $0.6532 $0.6556 $0.6760 $0.7258 MYR/AUD $2.7715 $2.7619 $3.0783 $3.0688 $3.0698 In-China market prices for rare earths are denominated in the Chinese Renminbi. A devaluation in the Chinese Renminbi would increase attractiveness in Chinese exports and China’s internal supply. Fluctuation in the Chinese Renminbi against the US Dollar therefore also increases the foreign exchange exposure on Lynas. 1.4 Operational and development risks Lynas’ operations and development activities could be affected by various unforeseen events and circumstances, such as hazards in exploration, the ability of third parties to meet their commitments in accordance with contractual arrangements, and the delivery and grades of ore and performance of processing facilities at design specification. Factors such as these may result in increased costs, lower production levels and, following on from that, lower revenue levels. Any negative outcomes flowing from these operational risks could have an adverse effect on Lynas’ business, financial condition, profitability, performance and share price.
Page 25
22 www.LynasRareEarths.com Directors’ Report These operating risks have the potential to cause personal injury, property damage and environmental contam- ination, and may result in the shutdown of affected facilities and in business interruption and the imposition of civil or criminal penalties, and negatively impact the reputation of Lynas. Although Lynas has detailed and closely managed plans to mitigate these risks and maintains property, business interruption and casualty insurance of types and in the amounts that it believes is customary for the chemicals industry, Lynas is not fully insured against all potential hazards incidental to its businesses. 1.5 Nature of mining Mineral mining involves risks, which even with a combination of experience, knowledge and careful evaluation may not be able to be fully mitigated. Mining operations are subject to hazards normally encountered in exploration and mining. These include unexpected geological formations, rock falls, flooding, dam wall failure and other incidents or conditions which could result in damage to plant or equipment, which may cause a material adverse impact on Lynas’ operations and its financial results. Projects may not proceed to plan with potential for delay in the timing of targeted output, and Lynas may not achieve the level of targeted mining output. Mining output levels may also be affected by factors beyond Lynas’ control. 1.6 Mineral and ore reserves No assurance can be given that the anticipated tonnages and grades of ore will be achieved during production or that the anticipated level of recovery will be realised. Mineral resource and ore reserve estimates are based upon estimates made by Lynas personnel and independent consultants. Estimates are inherently uncertain and are based on geological interpretations and inferences drawn from drilling results and sampling analyses. There is no certainty that any mineral resources or ore reserves identified by Lynas will be realised, that any anticipated level of recovery of minerals will be realised, or that an identified ore reserve or mineral resource will be a commercially mineable (or viable) deposit which can be legally and economically exploited. Further, the grade of mineralisation which may ultimately be mined may differ materially from what is predicted. The quantity and resulting valuation of ore reserves and mineral resources may also vary depending on, amongst others, metal prices, cut-off grades and estimates of future operating costs (which may be inaccurate). Production can be affected by many factors. Any material change in the quantity of ore resources, mineral reserves, grade, or stripping ratio may affect the economic viability of any project undertaken by Lynas. The need for additional future resources could also affect future production. Lynas’ estimated mineral resources and ore reserves should not be interpreted as assurances of commercial viability or potential or of the profitability of any future operations. Investors should be cautioned not to place undue reli- ance on any estimates made by Lynas. Lynas cannot be certain that its mineral resource and ore reserve estimates are accurate and cannot guarantee that it will recover the expected quantities of metals. Future production could differ dramatically from such estimates for the following reasons: • actual mineralisation or rare earth grade could be different from those predicted by drilling, sampling, feasibility or technical reports; • increases in the capital or operating costs of the mine; • decreases in rare earth oxide prices; • changes in the life-of-mine plan; • the grade of rare earths may vary over the life of a Lynas project and Lynas cannot give any assurances that any particular mineral reserve estimate will ultimately be recovered; or • metallurgical performance could differ from forecast. The occurrence of any of these events may cause Lynas to adjust its mineral resource and reserve estimates or change its mining plans. This could negatively affect Lynas’ financial position, results of operations and share price. Moreover, short-term factors, such as the need for additional development of any Lynas project or the processing of new or different grades, may adversely affect Lynas. Lynas reports its mineral resources and ore reserves in accordance with the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”). 1.7 Processing operations Lynas’ operations are subject to the operating risks associated with rare earth processing, including performance of processing facilities, and the related risks associated with storage and transportation of raw materials, products and residues. These operating risks have the potential to cause personal injury, property damage and environmental contamination, and may result in the shutdown of affected facilities and in business interruption and the imposition of civil or criminal penalties, and negatively impact the reputation of Lynas.
Page 26
23 Lynas Rare Earths Limited | 2026 Annual Report The hazards associated with Lynas’ mining and processing operations and the related storage and transportation of products, residues and reagents include: • pipeline and storage tank leaks and ruptures; • explosions and fires; • mechanical failures; and • chemical spills and other discharges or releases of toxic or hazardous substances or gases. Although Lynas has detailed and closely managed plans to mitigate these risks and maintains property, business interruption and casualty insurance of types and in the amounts that it believes is customary for the chemicals industry, Lynas is not fully insured against all potential hazards incidental to its businesses. 1.8 Availability of key inputs The Mt Weld Concentration Plant, the Lynas Malaysia advanced materials plant and the Kalgoorlie Rare Earth Processing Facility rely on the ready availability of key inputs, including chemical reagents, water, electricity and gas. Any inability of Lynas to obtain such inputs in sufficient quantities on a timely basis could materially adversely affect Lynas’ operations. For example, operational disruptions or insolvency of key suppliers may adversely affect the availability of chemical reagents. Interruptions in supply of electricity may occur, including due to insufficient network capacity. In respect of water, the water supply to the Mt Weld Concentration Plant is primarily sourced from a local aquifer supplemented by recycling, the water supply to the Lynas Malaysia plant is primarily sourced from the local Kuantan water supply infrastructure, supplemented by recycling, and the supply to the Kalgoorlie Rare Earth Processing Facility is primarily sourced under a water supply agreement for recycled grey water from the City of Kalgoorlie-Boulder. Reductions in water availability from those sources or failures of infrastructure could materially adversely affect the availability of water to the Lynas operations, notwithstanding the investment in water recycling in Western Australian operations, for example due to climate-related changes in weather patterns, such as extreme precipitation or increased drought or failures of infrastructure. 1.9 Supply chain and counterparty risk Lynas is dependent on contractors and suppliers to supply vital goods and services to its operations, including shipping logistics and the supply of chemicals and other materials. Lynas is therefore exposed to the possibility of adverse developments in the business environments of its contractors and suppliers, including in respect of the ability of those contractors and suppliers to meet their commitments under sales contracts or due to extreme weather events. Any disruption to services or supplies may have an adverse effect on Lynas’ financial business and financial condition. 1.10 Attraction and retention of skilled personnel Attraction and retention of skilled personnel is important to Lynas’ operations and its further growth. In addition, industrial and labour disputes, work stoppages and accidents, and logistical and engineering difficulties may also have an adverse effect on Lynas’ profitability and share price. 1.11 Customer risks Lynas’ revenue is dependent on continuing sales to its key customers, many of whom require delivery to specific timetables of products that comply with detailed specifications. The loss of key customers could significantly affect Lynas’ business, for example due to disputes with customers, customers switching to other suppliers or technolo- gies, or customer businesses being adversely affected by events outside the control of Lynas, including customer insolvency or declining markets for the end-products of customers. 1.12 Industry trends, including changes in technology Changes in technology, including switches to renewable energy sources, present both opportunities and risks to the Lynas business. As technologies and consumer trends continue to evolve, new competing technologies may emerge that may reduce demand for Lynas’ rare earth products. Any significant trends away from technologies that utilise Lynas’ rare earths products could materially adversely affect the Lynas business.
Page 27
24 www.LynasRareEarths.com Directors’ Report 1.13 Project development risks Lynas is expanding the heavy rare earths separation facility at Lynas Malaysia and partnering with third parties who are constructing new metal and magnet making facilities. Construction and ramp up of projects are subject to numerous risks, many of which are outside the control of Lynas, including project delays and cost overruns, disputes with contractors, insolvency of contractors, problems with design, delays in commissioning or ramp-up and new facilities not performing in accordance with expectations. These operating risks have the potential to cause personal injury, property damage and environmental contam- ination, and may result in the shutdown of affected facilities and in business interruption and the imposition of civil or criminal penalties, and negatively impact the reputation of Lynas. Although Lynas has detailed and closely managed plans to mitigate these risks and maintains property, business interruption and casualty insurance of types and in the amounts that it believes is customary for the chemicals industry, Lynas is not fully insured against all potential hazards incidental to its businesses. 2. Regulatory, legal and environmental risks 2.1 General regulatory risks Lynas’ business is subject, in each of the countries in which Lynas operates, to various national and local laws and regulations relating to the mining, production, marketing, pricing, transportation and storage of Lynas’ products and residues. A change in the legislative and administrative regimes, taxation laws, interest rates, and other legal and government policies may have an adverse effect on the assets, operations and ultimately the financial perfor- mance of Lynas and the market price of Lynas shares. Other changes in the regulatory environment (including applicable accounting standards) may have a material adverse effect on the carrying value of material assets or otherwise have a material adverse effect on Lynas’ business and financial condition. 2.2 Licences, permits, approvals, consents and authorisations Lynas’ mining and production activities are dependent on the granting and maintenance of appropriate licences, permits, approvals, and regulatory consents and authorisations (including those related to interests in mining tene- ments and those related to the operation of the Lynas plants in Australia and Malaysia), which may not be granted or may be withdrawn or be made subject to limitations at the discretion of government or regulatory authorities. Although such licences, permits, approvals and regulatory consents and authorisations may be granted, continued or renewed (as the case may be), there can be no assurance that such licences, permits, approvals and regulatory consents and authorisations will be granted, continued or renewed as a matter of course, or as to the terms of renewals or grants, including that new conditions, or new interpretations of existing conditions, will not be imposed in connection therewith. Whether such licences, permits, approvals and regulatory consents and authorisations may be granted, continued or renewed (as the case may be) often depends on Lynas being successful in obtaining the required statutory approvals for proposed activities. If there is a failure to obtain or retain the appropriate licences, permits, approvals and regulatory consents and authorisations, or if there is a material delay in obtaining or renewing them or they are granted subject to onerous conditions or withdrawn, then Lynas’ ability to conduct its mining and production activities may be adversely affected. 2.3 Political risks and government actions Lynas’ operations could be affected by government actions in Australia, Malaysia and other countries or jurisdictions in which it has interests. Lynas is subject to the risk that it may not be able to carry out its operations as it intends, including because of a change in government, legislation, guidelines, regulation or policy, including in relation to the environment, the rare earths sector, competition policy, native title and cultural heritage. Such changes could affect land access, the granting of licences and other tenements, the approval of developments and freedom to conduct operations. The possible extent of introduction of additional legislation, regulations, guidelines or amendments to existing legislation that might affect Lynas’ business is difficult to predict. Any such government action may require increased capital or operating expenditures and could prevent or delay certain operations by Lynas, which could have a material adverse effect on Lynas’ business and financial condition. Lynas also may not be able to ensure the security of its assets located outside Australia, and is subject to risks of, among other things, loss of revenue, property and equipment as a result of hazards such as expropriation, war, insurrection and acts of terrorism and other political risks and increases in taxes and government royalties. The effects of these factors are difficult to predict and any combination of one or other of the above may have a material adverse effect on Lynas’ business, financial position and share price.
Page 28
25 Lynas Rare Earths Limited | 2026 Annual Report 2.4 Malaysian regulatory matters Without limiting the generality of the risks specified above in this section, as announced on 2 March 2026, the Lynas Malaysia operating licence was renewed for 10 years commencing 3 March 2026. As part of the operating licence, Lynas Malaysia is required to implement an alternative cracking process so that the facility no longer produces WLP residue with an activity concentration above 1 Bq/g after 2 March 2031, with modifi- cation to commence by March 2028. Over the past 3 years, Lynas and local and international academic institutions have undertaken laboratory-scale research into modifications to the cracking process. Lynas is now progressing with an industrial scale trial, together with trials on the recycling and reuse of WLP. To the extent that Lynas does not, or is unable to, comply with relevant licence conditions including the key condi- tions specified above, and/or comply with licence conditions within the timeframes prescribed, then Lynas’ licences and approvals may be revoked. Government action, including legal action, may be also taken by or at the direction of the Malaysian government in order to ensure that the terms and conditions of Lynas’ licences and approvals are complied with to levels satisfactory to, and within the timeframes prescribed by, the Malaysian government. 2.5 Environmental risks Lynas’ activities are subject to extensive laws and regulations controlling not only the mining of, exploration for and processing of rare earths, but also the possible effects of such activities upon the environment and interests of local communities. In the context of obtaining environmental permits, including the approval of reclamation plans, Lynas must comply with known standards, existing laws and regulations which may entail greater or lesser costs and delays depending on the nature of the activity to be permitted and how stringently the regulations are implemented by the permitting authority. With increasingly heightened government and public sensitivity to environmental sustainability, environmental regulation is becoming more stringent, and Lynas could be subject to increasing environmental responsibility and liability, including laws and regulations dealing with air quality, water and noise pollution and other discharges of materials into the environment, plant and wildlife protection, the reclamation and restoration of certain of its properties, greenhouse gas emissions, the storage, treatment and disposal of residues and the effects of its business on the water table and groundwater quality. Sanctions for non-compliance with these laws and regulations may include administrative, civil and criminal penal- ties, revocation of permits and corrective action orders. These laws sometimes apply retroactively. In addition, a party can be liable for environmental damage without regard to that party’s negligence or fault. Given the sensitive nature of this area, Lynas may be exposed to litigation and foreseen and unforeseen compliance and rehabilitation costs despite its best efforts. 2.6 Climate change risks Information on climate related risks and related actions is outlined in the below Sustainability Report (mandatory climate disclosures). 2.7 Disposal of residues At the Mt Weld Mine and Concentration Plant, the Lynas Malaysia advanced materials plant, and the Kalgoorlie Rare Earths Processing Facility, Lynas operations generate residue or by-product materials in the form of solids, liquids and gases. Lynas has appropriate plans in place for the treatment, sale or disposal of each of those residues. Failure to implement those plans could have a material effect on Lynas’ licensing conditions and may adversely affect its operations. 2.8 Community acceptance and reputation Lynas recognises that a strong mutual relationship with each community in which it operates is a pre-condition to successful operations. Failure to maintain those relationships and the acceptance by those communities may have an adverse effect on Lynas’ operations. In addition, Lynas recognises the importance of maintaining its reputation with its stakeholders including share- holders, regulatory authorities, communities, customers and suppliers. Failure to maintain its reputation with some or all stakeholders may have a negative effect on the future performance of Lynas.
Page 29
26 www.LynasRareEarths.com Directors’ Report 2.9 Legal action It is possible that Lynas could be exposed to litigation or proceedings, either from shareholders, financiers, regula- tors or members of the communities in which Lynas operates. 2.10 Health and safety Lynas is subject to extensive laws and regulation in respect of the health and safety of its people and communities, and the protection and rehabilitation of the environments within which it operates. Lynas must comply with known standards, existing laws and regulations which may entail greater or lesser costs and delays depending on the nature of the activity to be permitted and the implementation of the regulations by the permitting authority. Failure to manage these matters have the potential to cause personal injury, property damage and environmental contamination, and may result in the shutdown of affected facilities and in business interruption and the imposition of civil or criminal penalties, and negatively impact the reputation of Lynas. 2.11 Tax risks Lynas is subject to taxation and other imposts in Australia, Malaysia and other countries or jurisdictions in which it has interests. In addition to the normal level of income tax imposed on all industries, companies in the resources sector are required to pay government royalties, direct and indirect taxes and other imposts. The profitability of companies in these industries can be affected by changes in government taxation and royalty policies or in the interpretation or application of such policies. Further, changes in tax law, or changes in the way tax law is expected to be interpreted, in the various jurisdictions in which Lynas operates, may affect the tax liabilities of Lynas. 3. Financial risks 3.1 Debt facilities and covenants Lynas has financing arrangements in place which are subject to acceleration and enforcement rights in the event of a default. To date, the Japan Australia Rare Earths B.V. (JARE) loan facility has been secured over all the assets of Lynas, other than Malaysia. Enforcement may involve enforcement of security over the assets of Lynas and its material subsidiaries, including appointing a receiver. The principal amount of the JARE facility was US$90m as at 30 June 2026. The principal amount will be due for repayment in fixed loan repayments between 31 December 2026 and 30 June 2030. In the event significant uncertainty arises in relation to Lynas’ ability to fully repay, refinance or reschedule the outstanding balances of the JARE loan facility by the maturity date of 30 June 2030, Lynas’ ability to continue as a going concern may also be affected. In addition, Lynas’ existing debt facilities are subject to a range of covenants. A failure to comply with any of these debt covenants may require Lynas to seek amendments, waivers of covenant compliance or alternative borrowing arrangements. There is no assurance that its lenders would consent to such an amendment or waiver in the event of non-compliance, or that such consent would not be conditional upon the receipt of a cash payment, revised payout terms, increased interest rates, or restrictions in the expansion of debt facilities in the foreseeable future, or that its lenders would not exercise rights that would be available to them, including among other things, calling an event of default and demanding immediate payment of outstanding borrowings. If such a demand was made and appropriate forbearance or refinance arrangements could not be reached, Lynas may not have sufficient available funds to meet that demand. 3.2 Funding risk Lynas’ existing debt facility agreements restrict its ability to incur further debt except in certain circumstances. Should Lynas experience a protracted decline in earnings, there is a possibility that the quantum of debt and/or equity funding available to Lynas would not be sufficient to execute its strategy (including its development of large scale projects) which could have a negative impact on the future financial performance or position of Lynas.
Page 30
27 Lynas Rare Earths Limited | 2026 Annual Report 4. General risks 4.1 General economic conditions Lynas’ operating performance and financial performance is influenced by a variety of general economic and busi- ness conditions including the level of inflation, interest rates, exchange rates and government fiscal, monetary and regulatory policies. Prolonged deterioration in general economic conditions, including an increase in interest rates or decrease in consumer and business demand, could be expected to have an adverse impact on Lynas’ business, results of operations or financial condition and performance. 4.2 Accounting standards Accounting standards may change. This may affect the reporting earnings of Lynas and its financial position from time to time. Lynas has previously and will continue to assess and disclose, when known, the effect of adopting new accounting standards in its periodic financial reporting. 4.3 Force majeure events Events may occur within or outside Lynas’ key markets that could affect global economies and the operations of Lynas. The events include, but are not limited, to acts of terrorism, an outbreak of international hostilities, fires, floods, earthquakes, changes in weather patterns or other severe weather events, labour strikes, civil wars, natural disasters, outbreaks of disease or other natural or man-made events or occurrences that can have an adverse effect on market conditions, the demand for Lynas’ product offering and services and Lynas’ ability to conduct business. 4.4 Cyber security and digital innovation Cyber security risks are increasing in the external environment. Cyber security risks include computer viruses targeting IT systems, unauthorised access, cyber-attack (either targeted at Lynas for financial gain or due to geopo- litical matters), social media disinformation campaigns, penetration of Lynas systems (including through attacks on Lynas’ suppliers) and other similar matters. A cyber event may lead to adverse impacts on Lynas’ operations, financial performance and reputation. Digital technologies, including AI, are rapidly advancing. Misuse of AI could cause reputational damage to Lynas and an increased risk of compromise of Lynas’ intellectual property. Failure to effectively adopt digital technologies could lead to less efficient business operations.
Page 31
28 www.LynasRareEarths.com Sustainability Report (mandatory) FY26 CLIMATE-RELATED DISCLOSURES This Sustainability Report comprises climate-related disclosures for Lynas Rare Earths Limited and its subsidiaries (‘Lynas’ or ‘the Group’) for the year ended 30 June 2026. This report has been prepared for the same consolidated reporting entity and reporting period as the Group’s Consolidated Financial Statements and uses the same currency as the Financial Report. This Sustainability Report builds on the Group’s voluntary reporting aligned with the Task Force on Climate-related Financial Disclosure (TCFD) framework for climate-related reporting which commenced in FY20. This Sustainability Report has been prepared for the Group in accordance with the Corporations Act (2001) and AASB S2 Climate-related Disclosures, which is the mandatory Australian Sustainability Reporting Standard (ASRS) issued by the Australian Accounting Standards Board (AASB). Management has made significant judgements, estimates and assumptions and this has been disclosed within the relevant sections of this report. Specific judgements, estimates and assumptions related to the following key areas can be found in the following sections: • Those used to identify climate-related risks and opportunities: Section 1.2 • Those used to assess material climate-related information: Section 3.2 • Those used in the methodology to calculate greenhouse gas emissions: Section 4.2 As this is the first year in which the Group has applied AASB S2, the Group has elected to apply transition relief not to disclose comparative information and Scope 3 greenhouse gas (GHG) emissions information in this Sustainability Report. Lynas has also early adopted the Amendments to AASB S2 Climate-related Disclosures, issued by the Australian Accounting Standards Board in December 2025, for the reporting period ended 30 June 2026. The amendments are effective for annual reporting periods beginning on or after 1 January 2027, with early adoption permitted. IMPORTANT NOTICE This report contains forward-looking statements and other forward-looking representations relating to climate issues, including climate-related actions/objectives and targets, anticipated effects of climate-related risks and opportunities (CRROs), project lifespans of assets and production capacity. There are significant uncertainties, limitations and assumptions in the metrics and modelling on which these statements rely. These forward looking statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond the Group’s control. You should not place undue reliance on these forward looking statements. To the maximum extent permitted by law, Lynas provides no representation, assurance, or warranty (express or implied) in connection with the accuracy, completeness and likelihood of fulfilment of any forward-looking statement, or any outcome expressed or implied in any forward looking statement. Parts of this report contain market, industry and statistical information and estimates that are based on reports from industry analysts and independent sources, as well as management’s own good faith estimates and analysis. Lynas believes the sources to be reputable but has not independently verified the data sources, methodologies or assumptions. Information that is based on estimates, forecasts, projections or industry research is inherently subject to uncertain- ties, and actual events or circumstances may materially differ from this information. Sustainability Report
Page 32
29 Lynas Rare Earths Limited | 2026 Annual Report The metrics, methodologies and data on which forward-looking statements rely may be impacted by various factors including: • the inherent limits in the current scientific understanding of climate change and its impacts; • the rapidly evolving and maturing nature of methodologies to capture and record emissions; • reliance on assumptions and future uncertainty (including in relation to energy stability, technology develop- ment (and its affordability) and socio-economic changes); and • the uncertainty around future climate and sustainability related policy, market practice, regulation and legislation. Given the risks and uncertainties associated with the forward-looking statements in this report, you are cautioned not to place undue reliance upon them. The information provided in this report may not be suitable for your specific needs and is not a substitute for obtaining independent advice. CORPORATE INFORMATION Headquartered in Perth, Western Australia, Lynas is an integrated rare earths miner and producer and the world’s only commercial producer of separated light and heavy rare earth oxides outside of China. Rare earths are used in future facing technologies designed to lower emissions and reduce energy consumption, as well as to improve efficiency, performance, speed, durability, and thermal stability. This includes hybrid and electric vehicles, wind turbines and electronics. The rare earth products produced by Lynas are traceable from mine to metal as Lynas owns the mine and processing facilities and has a tolling arrangement with an NdPr metal making partner. The key markets for separated rare earth materials are rare earths manufacturing supply chains in east Asia, Europe and North America. Business activities undertaken by Lynas include exploration, mining and production of a rare earths concentrate at Lynas’ Mt Weld site in Western Australia; cracking and leaching of the rare earth concentrate at the Lynas Malaysia plant in Gebeng and at the Kalgoorlie Rare Earths Processing Facility; and solvent extraction and product finishing (drying and calcination) at the Lynas Malaysia plant. Other activities include sales, marketing and transport of prod- ucts from Lynas Malaysia to customers; by-product management; and research and innovation for new products and processes, including for new energy industries. DIRECTORS’ DECLARATION In the opinion of the directors of Lynas Rare Earths Limited, the Group has taken reasonable steps to ensure the substantive provisions of this Sustainability Report are in accordance with the requirements of the Corporations Act 2001 (‘the Act’), including: (a) Complying with the Australian Sustainability Reporting Standard AASB S2 Climate-Related Disclosures and section 296C(2) of the Corporations Act 2001; and (b) Containing the climate statement disclosures required by section 296D of the Corporations Act 2001. Made in accordance with a resolution of the directors of Lynas Rare Earths Limited. On behalf of the Board John Humphrey Director 26 August 2026
Page 33
30 www.LynasRareEarths.com Sustainability Report 1. Strategy 1.1 Business Strategy The Group’s business strategy is to grow, optimise performance and deliver returns to shareholders from the Lynas 2025 capital investments, including ramping up assets in line with customer demand and market growth; and adding resource and scale, increasing downstream capacity, and expanding into the outside China metal and magnet supply chain. This strategy is outlined in the Towards 2030 growth strategy announced on 28 August 202610. In line with Lynas’ Climate Change Policy11, the Group is taking action to meet the challenges of climate change by identifying opportunities to reduce Scope 1 and 2 emissions in our operations and by contributing to low emissions technologies to support the energy transition. We seek to achieve this in a way that makes a positive contribution to our communities and delivers value for our customers, shareholders and other important stakeholders. Key elements of the Group’s strategy to meet the challenges of climate change are: market development, physical risk adaptation, clean energy investment and research and innovation. Time horizons The Group considers the effects of climate change over three time horizons that are aligned to the Group’s strategic priorities, the anticipated progression of climate-related risks, opportunities, adaptions and mitigation initiatives and the current project lifespan of assets: Short-term 2026–2030 (4 years) Lynas’ Towards 2030 growth strategy outlines business growth plan to 203012 Medium-term 2030–2040 (5-14 years) Aligned with longer term asset planning Long-term 2040–2050 (15–24 years) The Mt Weld Ore Reserve supports >20 year mine life at expanded production rates13; Lynas production facilities are long-term assets 10 https://wcsecure.weblink.com.au/pdf/LYC/02985269.pdf 11 https://lynasrareearths.com/wp-content/uploads/2023/11/Lynas-Climate-Change-Policy-28-Nov23.pdf 12 https://wcsecure.weblink.com.au/pdf/LYC/02985269.pdf 13 https://wcsecure.weblink.com.au/pdf/LYC/02835257.pdf Market development Increase production capacity and product range to meet forecast demand growth for rare earth materials in energy efficient technologies Physical risk adaptation Continue to assess and implement mitigation meas- ures for potential climate related physical risks in our operations Clean energy investment Invest in clean energy solutions, including renewable power, to reduce GHG emissions Research and innovation Develop innovative solutions to reduce GHG emissions in our operations and work to develop clean energy products for our customers
Page 34
31 Lynas Rare Earths Limited | 2026 Annual Report 1.2 Climate-related risks and opportunities In FY26, the Group conducted an assessment of a broad list of climate-related risks and opportunities (CRROs) to identify what could reasonably be expected to affect the entity’s prospects over the short, medium or long term, including: • Effect on cash flows, access to finance or cost of capital over the short, medium or long term; • Current and anticipated effects on the Group’s business model, value chain, strategy and decision making; and • Future projections of both climate-related physical and transitional impacts. This review considered all risks in the Group’s Risk Register for their relevance in relation to CRROs and included scenario analysis of 5 core classes of acute and chronic physical perils (precipitation, drought, bushfire, temperatures and oceans) as well as 5 transition risks (policy, legal, technology, reputation and market) and 5 opportunities (clean energy development, new products and services, access to new markets, enhanced business resilience and policy). A short list of potential CRROs was then developed and assessed based on those that could reasonably be expected to affect the Group’s prospects over the short, medium and long term. Scenario analysis Climate-related scenario analysis completed across all of Lynas’ operating locations was used to assess the antici- pated effects of the CRROs over the short, medium and long time horizons and the resilience of the Group’s strategy and business model in low and moderate scenarios for transition risks and low and high emissions scenarios for physical risks (see table below). It was also used as an additional input to inform the identification of CRROs. Scenario analysis is used as a risk assessment tool, not a prediction. There are inherent limitations with scenario analysis because it relies on assumptions that may or may not prove to be correct. The key assumptions and methodologies used are outlined below. By evaluating a range of plausible climate futures to assess the anticipated effects, the Group enhances its understanding of how CRROs may affect its operations, assets, customers and broader value chain under different conditions. Scenario analysis was undertaken in line with Intergovernmental Panel on Climate Change’s (IPCC) low emissions and high emissions concentration pathways. The review used Socio-economic Pathways (SSPs), which are the latest generation of global climate modelling from the Coupled Model Intercomparison Project phase 6 (CMIP6). Scenarios were chosen for their relevance to Lynas’ operations and business model. Low and high emissions scenarios were selected for assessment of physical risks to test physical risks under ‘best and worst case’ scenarios. For transition risks, the low and “middle of the road” scenarios were selected to align with current policy commitments and data availability.
Page 35
32 www.LynasRareEarths.com Scenarios considered SSP1-1.9 Sustainability SSP2-4.5 Middle of the road SSP5-8.5 Fossil-fuelled development Likely surface temperature change15 Approx. 1.5°C Approx. 2.1-3.5°C Approx. 3.3-5.7°C Climate risks & opportunities assessed Physical & transition Transition Physical Key assumptions Policies Coordinated global climate policy Fragmented global climate policy Absence of global climate policy Macroeconomic trends Gradual shift towards a more sustainable path Social, economic and technological trends similar to historical patterns Social and economic development is coupled with use of fossil fuels and resource and energy intensive lifestyles Energy use & mix Increasing shift to renewable energy and sharp decline in fossil fuel generation post-2030 Use of fossil fuels and renewable energy solutions Fossil fuel based economy Technology development High demand for low emissions technologies such as EVs and power generation and storage, consistent with the NGFS Net Zero 2050 scenario (NGFS Phase V, 2024) and IEA Net Zero Emissions by 2050 Scenario (IEA, 2024b) Demand for low emissions technologies grows but at a slower rate Limited demand for decar- bonisation technologies Data from additional sources was used as necessary, including the NGFS Net Zero 2050 scenario (NGFS Phase V, 2024) and IEA Net Zero Emissions by 2050 Scenario (IEA, 2024b), while ensuring consistency with underlying IPCC scenarios. Climate analysis was undertaken by subject matter experts which included site visits, historical data analysis and recent events and weather patterns, and the implementation of site-specific mitigation measures. Mitigation measures for potential risks identified includes the installation of flood barriers and causeways at Mt Weld; water recycling at Mt Weld and Kalgoorlie; drone bushfire monitoring, vegetation management and emergency response planning and drills; and staff dehydration testing and awareness. Scenarios considered acute physical risks such as physical damage to assets (buildings, machinery, inventory) at each of Lynas’ three operating sites and associated loss in profits caused by that physical damage or disruption to operations as a result of chronic physical risks, such as increased severity of extreme weather events such as extreme precipitation, strong winds, extreme heat, drought and sea level rise. Scenarios also considered transition risks including regulatory changes, increased capital and operating costs and technological changes. As Lynas supplies materials used in low emissions technologies, such as electric vehicles and wind turbines, Lynas’ business model is structurally aligned with the energy transition and opportunities were also assessed under two relevant scenarios. Scenario analysis was completed by external climate experts in August 2025 and presented to the Board as part of the Audit, Risk & ESG Committee’s Climate Workshop held in November 2025. This supplemented physical climate risk scenario analysis undertaken by an external expert as part of an annual assessment which also includes visits to each operating site and engagement with site management. Further scenario analysis of CRROs was completed in July 2026 to consolidate the analysis completed during FY26. 14 Relative to pre-industrial time Sustainability Report
Page 36
33 Lynas Rare Earths Limited | 2026 Annual Report Climate resilience The Group’s capacity to remain resilient to climate change is influenced by maintaining financial flexibility to allocate capital efficiently towards emerging climate priorities. This enables the Group to respond should risks and opportunities change as a result of shifting global action. Based on the climate-related scenario analysis performed, Lynas considers its strategy and business model to be resilient under the scenarios assessed. While the implications of climate change differ across the scenarios consid- ered, the Group maintains the financial and operational flexibility to respond to climate-related risks and pursue climate-related opportunities. The key areas of potential changes to capital allocation are, as follows: • If a low-warming scenario were to eventuate, Lynas has the capacity to adjust or adapt business strategy to: • Expand facilities and increase production capacity to produce materials required for low emissions technologies, including NdPr for permanent magnet motors used in electric and hybrid vehicles • Prioritise and accelerate investment in new energy products such as catalysts for the hydrogen market • Alternatively, if a high-warming world scenario were to eventuate, the Group has capacity to adjust or adapt business strategy to: • Increase capital for adaptation projects responding to increased exposure to extreme weather patterns • Balance research and innovation investment in new energy markets with more mature market opportunities. 1.3 Climate-related risks and opportunities affecting the business Lynas continues to put controls and mitigants in place for climate-related risks within the Group Risk Register that have a high or extreme inherent risk rating (“IRR”). Lynas continues to put controls and mitigants in place to reduce these risks. Following detailed analysis and assessment, six climate-related risks and opportunities (CRROs) were identified with potential effects on Lynas’ business model and value chain over the short, medium or long term. 1.4 Potential effects and mitigation of identified risks The table below outlines the six CRROs and their potential effects on Lynas’ business model and value chain. From a transition risk and opportunity perspective, as Lynas is an integrated miner and producer of rare earth products, 100% of Lynas’ business activities are exposed to identified transition risks and aligned with transition opportunities. From a physical risk perspective, 100% of operating sites (total of 3 sites) are exposed to identified physical risks, as outlined below. Lynas established a Climate Transition Working Group, which is a cross-functional team dedicated to developing short, medium and long term GHG emissions reduction strategies, in line with Lynas’ Climate Change Policy, to address CRROs. Transition risk 1 Changes to existing and emerging regulatory requirements: Increased political, policy and legal risks such as the introduction of regulatory changes to reduce or address the impact of climate change, including limiting GHG emissions from emissions-intensive industries. Time Horizon: Medium-long Potential effect on business model and value chain Mitigation or adaption effects Policy impacts such as the introduction of regulatory changes to reduce or address the impact of climate change, including limiting GHG emissions from energy- intensive industries such as minerals processing. Key initiatives in FY26 included: • enhancing the Group GHG data manage- ment system to increase accuracy and auditability; • working towards the Group’s first Climate Transition Plan; and • commissioning the new 65MW Mt Weld hybrid renewable power station which has reduced reliance on diesel fuel at Mt Weld operations. Lynas has recognised an addi- tional $143.8m in Right-Of-Use assets with respect to the Solar and Wind components of the power station commissioned in FY26.
Page 37
34 www.LynasRareEarths.com Transition risk 2 Increased capital and operational costs: Increased costs such as higher cost inputs and raw materials; investment in new low emissions technologies; cost of complying with changes to emissions regulations; potential for high future carbon prices. Time Horizon: Medium Potential effect on business model and value chain Mitigation or adaption effects Higher cost inputs and raw materials; investment required for new low emis- sions technologies or alternative fuels; higher fossil fuel prices as the energy transition progresses; cost of complying with changes to emissions regulations. During FY26 Lynas focused on reducing reliance on fossil fuels by transitioning to renewable and clean energy solutions by commissioning the new 65MW Mt Weld hybrid power station, which was completed in the December 2025 quarter and full operation commenced under a 15-year power purchase agreement (PPA) with Zenith Energy. This achieved: • average 93% renewable energy once fully operational in FY26 (January-June 2026), well above target of 70%; • savings of over 870,000 litres of diesel in Q3 FY26 compared to Q3 FY25 when Mt Weld was operating a diesel power plant; and increased operational energy efficiency and reduced emissions from processing. Further, in FY26 gas consumption at Lynas Malaysia was reduced through new, enclosed furnaces. Transition risk 3 Technological changes to address the effects of climate change: Technological changes could result in decreased demand for Lynas’ products due to the emergence of lower cost or lower emissions competitors of either rare earth products or alternative technologies. Time Horizon: Medium-long Potential effect on business model and value chain Mitigation or adaption effects Technological change may result in decreased demand for Lynas’ products; the emergence of lower cost or lower emissions competitors of either rare earth products or alternative technologies; or the energy transition pathway may be slower than predicted, reducing demand for rare earths in new energy technol- ogies such as electric vehicles, wind turbines and electrification of industrial processes. Lynas continued to invest in process improve- ments and product innovation in FY26 to assist the Group and its customers to meet the challenges of climate change. In FY26, Lynas invested $9m in research and innovation activities. Sustainability Report
Page 38
35 Lynas Rare Earths Limited | 2026 Annual Report Transition opportunity 1 Forecast growth in demand for rare earth materials: Increased demand for rare earth materials will be driven by growth in clean technologies, particularly wind turbine and electric vehicle uptake which will require increased production of Nd, Pr, Dy and Tb for permanent magnet motors. Stronger climate action is likely to lead to higher demand. Time Horizon: Medium-long Potential effect on business model and value chain Mitigation or adaption effects Most transition pathways forecast a signif- icant increase in demand for rare earths as inputs to clean energy technologies. Stronger demand is likely to be observed under transition scenarios consistent with more ambitious emissions reduction policies. Larger and faster positive opportunities for rare earth producers will emerge with efforts to achieve net zero emissions. Implementing key pillars of the Group’s Towards 2030 growth strategy announced August 2025 is a key enabler to maximise value from this opportunity. In FY26 progress on Towards 2030 growth pillars includes: • ramping up assets in line with customer demand and market growth; • expanding heavy rare earth product range with first Samarium (Sm) production in March 2026; • signing an MoU with Japanese partner JARE for mineral exploration and development; and • expanding into the outside China metal and magnet supply chain through a part- nership with JS Link15 for the construction of a Malaysian magnet factory by JS Link and supply of rare earths by Lynas, and agreements with LS Eco Energy towards the definitive agreement for a long-term metal processing arrangement utilising Lynas’ rare earth products at a metal making facility to be constructed by LS Eco Energy16 in Vietnam. Physical risk 1 (acute) Increased severity of extreme weather events: Increased risk of exposure to flooding and bushfire could lead to safety hazards, physical damage or business interruptions at the Mt Weld mine, Kalgoorlie Rare Earth Processing Facility or Lynas Malaysia advanced materials plant, potentially affecting employee safety, production outcomes, costs or supply chains. Time Horizon: Short-medium Potential effect on business model and value chain Mitigation or adaption effects Western Australia: An increase in extreme weather events could increase the risk of exposure to flooding at Mt Weld operations and wildfire at Kalgoorlie operations. Malaysia: An increase in extreme weather events could increase the risk of exposure to bushfire. Mitigation or adaption efforts include: • pre-incident mitigation measures and emergency response planning for potential extreme weather events implemented at each site. • flood barriers have been installed at the Mt Weld site. • drone monitoring for bushfires implemented at Lynas Malaysia. • vegetation management and emergency response planning at Lynas Malaysia and Kalgoorlie sites. • bushfire response planning and emergency drills at its Kalgoorlie and Kuantan sites. 15 https://wcsecure.weblink.com.au/pdf/LYC/03108378.pdf 16 https://wcsecure.weblink.com.au/pdf/LYC/03114179.pdf
Page 39
36 www.LynasRareEarths.com Physical risk 2 (chronic) e.g. extreme heat, extreme precipitation and drought Longer term shifts in climate patterns: Increased risk of extreme heat, extreme precipitation and drought could lead to increased pressure on water supplies for remote operations in Western Australia physical damage or interruptions to operations in at the Mt Weld mine, Kalgoorlie Rare Earth Processing Facility or Lynas Malaysia advanced materials plant. Time Horizon: Long Potential effect on business model and value chain Mitigation or adaption effects Western Australia: Increased pressure on water supplies will require additional investment in water recycling and identification of new water sources. An increase in extreme heat days could translate to a material increase in heat stress periods, potentially disrupting operations and contributing to lost productivity. Malaysia: An increase in heat stress periods with an increase in the frequency of very hot days could present a risk to employee safety as well as a risk of interrupted operations or lost produc- tivity; extreme precipitation could present a risk of interrupted operations or lost productivity if it results in disruptions to staff commuting or supply chain logistics. Mitigation or adaption efforts include: • new on-site water recycling infrastructure to increase resource efficiency at Mt Weld. Further, construction is being completed for a new water recycling plant at the Kalgoorlie Rare Earths Processing Facility. • implementing heat mitigation initiatives, including additional building ventilation at Lynas Malaysia to reduce the effects of heat stress. • installing new enclosed furnaces at Lynas Malaysia, reducing ambient heat in product finishing area. • installing cool rooms at Mt Weld and Kalgoorlie to provide relief for employees during hot weather. • continuing to focus on employee dehydration awareness on all sites. 1.5 Overview of current and anticipated financial effects As part of the Lynas Risk Management Framework, climate-related risks are assessed and prioritised based on their potential impact on operations and financial performance. During the current reporting period there was no material financial impact associated with CRROs on the Group’s financial position, financial performance or cash flows. The Group is unable to quantify the anticipated financial effect from this risk. There is significant uncertainty associated with the basis for any financial quantification of the anticipated effects due to: Transition risks 1: Changes to existing and emerging regulatory There is significant uncertainty as to the speed and nature of changes to the regulatory environment in the medium to long term to financially quantify the impact of this risk. This risk could impact Lynas’ cost of sales and compliance expenses. Transition risks 2: Increased capital and operating costs There is significant uncertainty as to the timing and magnitude of changes to the costs of inputs and raw materials passed on through the supply chain to financially quantify the impact of this risk. This risk could impact Lynas’ cost of sales and capital expenditure costs. Transition risks 3: Technological changes to address the effects of climate change There is significant uncertainty as to the speed and magnitude of changes to the technological changes in the medium to long term to address the effects of climate change. This risk could impact Lynas’ cost of sales (where further costs are required to keep up with technology changes), capital expenditure costs (where new capital technology is required) and impairment costs (where existing capital assets become obsolete as new technology is employed). Sustainability Report
Page 40
37 Lynas Rare Earths Limited | 2026 Annual Report Physical risks 1 (acute): Increased severity of extreme weather events There is significant uncertainty associated with the basis for any financial quantification of the anticipated financial impacts due to the significant uncertainty of the likelihood, severity and area of asset(s) effected over the short, medium and long term due to the increased severity of extreme weather events. This risk could impact Lynas’ overall ability to operate, impacting revenue and cost of sales, as well as asset values for potential damage of isolated extreme weather events. Physical risks 2 (chronic): Longer term shifts in climate patterns There is significant uncertainty associated with the basis for any financial quantification of the anticipated financial impacts due to the significant uncertainty of the likelihood, severity and area of asset(s) effected over the long term due to shifts in climate patterns. This risk could impact Lynas’ overall ability to operate, impacting revenue and cost of sales, as well as asset values for potential damage of isolated extreme weather events. Transition opportunity 1: Forecast growth in demand for rare earth materials There is significant uncertainty as to the speed and quantum of changes in demand for rare earth magnets and this is not yet able to be quantified. This opportunity could impact Lynas’ revenue. As a result of the above, any quantitative estimate of the anticipated financial effects would be highly uncertain and is not considered useful to users of the financial statements and this report.
Page 41
38 www.LynasRareEarths.com 2. Governance 2.1 Governance roles and responsibilities Board Oversight The Lynas Board of Directors (the Board) is responsible for setting and overseeing the Group’s strategy, business plans and annual budgets, and the risk management approach. This includes the Board’s responsibility for over- sight of climate-related risks and opportunities (CRROs), with support from the Audit, Risk and ESG Committee of the Board. Detailed biographies of Board members are available on the Lynas website at LynasRareEarths.com and in the Annual Report. Role of Board Committees The Audit, Risk and ESG Committee of the Board oversees, monitors, reviews, and reports to the Board on key business risks (including CRROs), internal controls and performance against the Company’s risk management framework. The Committee consists of non-executive directors and is accountable to the Board. In FY26, all members of the Committee were independent non-executive directors. The Charter of the Audit, Risk and ESG Committee of the Lynas Rare Earths Board of Directors outlines the Committee’s role in relation to CRROs. As stated in the Committee Charter, this includes overseeing, monitoring and reviewing the Company’s corporate reporting process and internal control framework, including whether the sustainability (climate) report reflects the understanding of the Committee members in relation to CRROs of the Company that could reasonably be expected to affect the Company’s prospects, and complies with legal require- ments and applicable sustainability standards. The Committee oversees and reports to the Board on key business risks including internal controls, performance against the Company’s risk management framework and the systems and processes used to identify, assess, prioritise and monitor material CRROs. This includes the setting of measurable objectives such as climate-related targets and monitoring progress against those objectives and the appropriate form of reporting. ESG, including CRROs, is a recurring agenda item discussed at each Audit, Risk and ESG Committee meeting and where appropriate at Board meetings. Audit, Risk and ESG Committee meetings are held at least twice a year. In FY26, the Board discussed ESG and climate, including progress towards the Group’s climate-related objectives at four Audit, Risk and ESG Committee meetings. This included the review of scenario analysis to assess CRROs at a Board Climate Workshop held by the Audit, Risk and ESG Committee in November 2025. The Committee also holds director education sessions on climate related matters to enhance Board skills. Board education sessions related to climate strategy, risks and reporting were held during FY26 and delivered by external subject matter experts. Progress towards climate-related actions is reported to the Board and reviewed at each meeting of the Audit, Risk and ESG Committee, which occurs at least twice annually. In line with the Group’s Climate Change Policy (available at https://lynasrareearths.com/about-us/corporate-gov- ernance/), CRROs are reviewed annually or more frequently as needed by the Board and considered as part of Lynas’ business and capital allocation strategy in a range of ways including: • Assessment of GHG emission impacts included in all capital project decision making • GHG emissions reduction opportunities included in operational process improvement plans • GHG emissions reduction included in research and innovation strategy The Board takes CRROs into account when overseeing strategy, major transactions, risk management processes and related policies. While the Group does not currently use a carbon price, GHG emissions are assessed and considered as part of major project capital expenditure approvals, in line with climate-related risks included in the Group’s Risk Register. The Board also considers trade-off associated with CRROs and identifies mitigation measures where available. For example, the Mt Weld Expansion project was completed in FY26 to meet increased market demand for rare earths as inputs to energy efficient, electronics and green technologies, and production capacity has been increased by approximately four times. As part of this project, the legacy diesel fired Mt Weld power plant was replaced with a high efficiency 65MW hybrid renewable power station targeting 70% renewable electricity generation. Sustainability Report
Page 42
39 Lynas Rare Earths Limited | 2026 Annual Report The Nomination, Remuneration and Community Committee of the Board oversees Board skills and is responsible for equity-based remuneration plans for senior executives and other employees, as outlined in the Charter of the Nomination, Remuneration and Community Committee (available at https://lynasrareearths.com/about-us/ corporate-governance/). This includes determining climate-related performance metrics to be included in remuneration frameworks. In FY26, climate-related targets were included as part of both the Short Term Incentive (STI) and Long Term Incentive (LTI) for the CEO and executives. Non-financial performance represented 60% of the potential STI opportunity, distributed across four key areas: (1) Progress on Strategic Plan/Business Plan; (2) Health, Safety and Environment; (3) Sustainability (including climate); (4) People and Culture. The climate-related metric for the Sustainability component of the STI was full commissioning and operation of the Mt Weld hybrid renewable power station by 30 June 2026. This was achieved ahead of schedule in January 2026. For the LTI, climate-related targets represented 10% of the total LTI opportunity and related to the delivery of greater than targeted 70% average renewable energy penetration at Mt Weld from the new Mt Weld hybrid renewable power station. Frequent and deliberate consideration is given to Director experience, qualifications, background and skills. Directors, including the Chair, self-assess their individual skills and experience, including environment and climate change skills. The matrix is revised annually and approved by the Board. Self assessment ratings inform the Board’s Skills and Experience matrix, which is disclosed in the annual Corporate Governance Statement (available on the Group’s website). Board training and education sessions on climate-related risks and opportunities were held in FY26 and are planned for FY27. Board of Directors Responsible for setting and overseeing Group strategy and risk management approach. Board Committees Audit, Risk & ESG Committee oversees, monitors, reviews, and reports to the Board on key business risks, including identifying, assessing, prioritising and monitoring material climate-related risks and opportunities and appropriate reporting. Working Groups Climate Transition Working Group and Major Projects Steering Committee are responsible for identifying, reviewing and assist the Lynas leadership team to oversee and coordinate the Group’s GHG emissions reduction strategies and monitor performance. Lynas Leadership Team Executive management respon- sible for strategies to manage climate risks and opportunities within relevant divisions. CEO Responsible for climate-related matters at the highest level and ensuring they are embedded into core values and strategy. Management responsibilities The Board delegates day-to-day responsibility of executing strategy, including climate-related matters, to the appointed management roles. The CEO is supported by a team of management executives, including the executive management with key roles in climate-related matters. Senior executives lead a cross-functional Climate Transition Working Group which is focused on developing the Group’s GHG emissions reduction strategy and climate transi- tion plan and monitoring performance. Responsibility for CRROs is delegated to relevant executives. The executive reports to the Audit, Risk and ESG Committee on these matters at each meeting of the Committee which is held at least twice yearly. In FY26, six Audit, Risk and ESG Committee meetings were held. Where specific skills or advice are required, Lynas engages external expert advisers, including in the areas of climate science, governance, and assurance.
Page 43
40 www.LynasRareEarths.com Key roles delegated to executives to support Board oversight include: • Chief Executive Officer (CEO): responsible for climate-related matters at the highest level and responsible for ensuring that climate-related matters are embedded into the Group’s core values, strategy and operations. • Chief Financial Officer (CFO): responsible for Group risk management (including integration of CRROs), auditing and disclosure activities aligned with financial reporting. Controls and procedures used by management to support oversight of climate matters Management’s oversight of the Group’s CRROs is supported by the use of controls and procedures relating to CRROs and the monitoring of performance in managing those risks. This includes the following procedures: i) Identification of climate-related information, including internal and external information about past events, current conditions and forecasts of future conditions, including climate scenario modelling ii) Assessment of CRROs and the significance of their impacts using key judgements, estimates and significant assumptions iii) Determination of CRROs that could reasonably be expected to affect the Group’s prospects iv) Qualitative and quantitative assessment of CRROs. The controls related to these procedures include: • Climate Workshop held annually by the Audit, Risk and ESG Committee of the Board to assess climate- related risks and opportunities • Climate risk register maintained and reviewed quarterly as part of the Group Risk Register • Scenario analysis results reviewed by management and the Board prior to being incorporated into reporting • Key judgements, estimates and assumptions in the CRROs are reviewed and approved by the Audit, Risk and ESG Committee of the Board • GHG data collection and management is subject to validation and review by management. Management is responsible for daily implementation of governance frameworks and controls to support compli- ance and stakeholder communications, and reporting to the Board on these matters. Sustainability Report
Page 44
41 Lynas Rare Earths Limited | 2026 Annual Report 3. Risk Management 3.1 Risk Governance CRROs are considered as part of business strategy and planning, and are integrated into Lynas’ Risk Management Framework which includes risk governance, strategy and decision making processes. The Group’s Risk Management Policy is available at https://lynasrareearths.com/about-us/corporate-governance/. By adopting a three-line defence model, the Group establishes accountability and effectiveness in managing risk while enhancing compliance with regulation. An outline of the three-line defence model is provided below: Line Includes Responsibilities 1st line: Operational management Includes employees making decisions in line with the overall strategy, those deploying resources within the entity and those who contribute to overall business outcomes. Responsible for both assisting in the identifi- cation and management of associated risks, including climate risks. 2nd line: Executive Risk Committee Includes those responsible for providing expert knowledge, support and monitoring on risk-related matters in line with the Risk Management Framework. Responsible for managing organisation- wide risks including the review and approval of Risk Management Framework, which include the broader climate risk, appetite, and strategy. 3rd line: Internal Audit Includes evaluating risk assessment and mitigation strategies, monitoring controls, providing advisory services, monitoring compliance, and facilitating communication. Provides assurance assessment to the Board over the control environment within the Group, including on climate matters. 3.2 Risk processes Climate-related risk and opportunity identification The identification and assessment of CRROs considered the Group’s business model and value chain, using all reasonable and supportable information available without undue cost or effort for a comprehensive understanding of the CRROs. Lynas’ Risk Management Framework provides a structured and consistent approach to identifying and managing our risks and compliance obligations. Whilst CRROs are not yet integrated into the Risk Management Framework, the framework has guided our approach to CRRO risk management during the reporting period. CRROs were included within broader risk categories which were monitored during the reporting period. Potential climate-related physical risks, chronic hazards and transition risks and opportunities are identified by gathering and analysing internal and external evidence. This includes current and past Group experience as well as assessments by subject matter experts, industry peer disclosures, industry outlook forecasts (such as from the International Energy Agency (IEA)) and topics identified in disclosure standards. Lynas utilises climate modelling data from internal data sources (including external experts climate resilience assessment of Lynas operating sites) and external sources, such as local meteorological agencies and the IPCC. In FY26, this included physical scenario analysis to assess short and long term effects of climate-related physical risks on the Group’s operating sites across the Intergovernmental Panel on Climate Change’s (IPCC) low emissions and high emissions Shared Socioeconomic Pathways SSP1-1.9 and SSP5-8.5. Transition risks were assessed using SSP1-1.9 and SSP2-4.5. Lynas’ business model is aligned for growth under ‘transition’ scenarios as the Company’s products are used in a range of low emissions technologies such as wind turbines, electric vehicles and efficient electric motors. Potential climate-re- lated opportunities are identified through stakeholder engagement and monitoring of climate-related trends. Lynas’ identification of opportunities is embedded within the Group’s strategy and opportunities are also identified through stakeholder engagement and monitoring of climate-related trends. Lynas takes a holistic view of transitional risks and opportunities as these are generally applicable throughout the Group.
Page 45
42 www.LynasRareEarths.com Risk and opportunity assessment and prioritisation As part of the Lynas Risk Management Framework, climate-related risks are assessed and prioritised based on their potential impact on operations and financial performance. Lynas assesses the nature, likelihood and magnitude of the impact on our business performance and prospects, using both qualitative and quantitative criteria. Lynas is guided in its assessment of the nature, likelihood and magnitude of the effects of the risks using its Risk Management Framework: • Likelihood: Probability of the risk/opportunity materialising within the relevant time horizon rated on the five-point scale (Rare, Unlikely, Possible, Likely, Almost Certain) • Magnitude: Severity of financial impact if the risk/opportunity materialises, rated on the five-point scale used in Lynas’ Risk Management Framework (Insignificant, Minor, Moderate, Major, Severe). The consequence scale ranges from insignificant (<0.5% of adjusted 3 year average EBITDA / <$1m unplanned cash loss) to Severe (> 20% of Adjusted 3 year average EBITDA / >$100m unplanned cash loss) A risk rating combining the likelihood and consequence is produced, on a scale of Low, Medium, High or Extreme, which assigns a numerical score between 1-25. This risk matrix approach is used to assess and prioritise all risks, including climate-related risks. Risks classified medium or above by the risk matrix are prioritised for further action. When assessing climate-related risks and the significance of their impacts, Lynas considers the nature, likelihood and magnitude of impacts on our business performance and prospects. This may be in the form of increased operating or capital costs, increased funding costs, reduced revenue, asset impairment, or market perceptions. Industry or market trends and forecasts as well as scenario analysis may be considered in assessing the likelihood of the risk occurring. Management considers both qualitative and quantitative factors when assessing CRROs that could reasonably be expected to affect the entity’s prospects. Opportunities are evaluated based on their relevance to the Group’s core business operations, including financial viability and impact, environmental and social impact and stakeholder interest. Opportunities are prioritised based on their potential impact, feasibility and alignment with strategic business goals. All major internal capital projects undergo a cost-benefit analysis, including a GHG emissions assessment. Risk and Opportunity Monitoring Climate-related risks are included in the Group’s Risk Register and reviewed by the Lynas Leadership team. Risks that could reasonably be expected to affect the entity’s prospects are reviewed at least twice yearly by the Audit, Risk and ESG Committee of the Board (in line with the Audit, Risk and ESG Committee Charter). The review considers whether any updates are required to the risk assessment and considers the progress of activities to mitigate or adapt to climate-related risk. Ongoing monitoring of CRROs is integrated into business activities. This includes: • Quarterly review of progress against climate-related objectives, such as implementation of clean energy solutions or water efficiency measures • Monitoring of weather data to ensure that emerging risks and opportunities are identified and addressed (e.g. installation of cool rooms for employee relief during periods of extreme heat) • Ongoing engagement with customers and research and innovation activities to identify market opportunities and assess market demand for rare earths for use in clean energy technologies • Ongoing engagement with stakeholders including communities and regulatory bodies to stay informed about changes in climate policy and environmental conditions. Sustainability Report
Page 46
43 Lynas Rare Earths Limited | 2026 Annual Report 4. Metrics and Targets Lynas measures Scope 1 and 2 GHG emissions in accordance with the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004) except for the Group’s Australian operating facilities which are within the scope of the Australian National Greenhouse and Energy Reporting scheme (“NGER”). The Group has applied the jurisdictional relief to use NGER to measure these emissions. 4.1 Operational GHG metrics In FY26, the Group’s total GHG emissions were 174,211 tonnes of carbon dioxide equivalent (tCO2-e). This included 96,790tCO2-e Scope 1 and 77,421tCO2-e Scope 2 (location-based). The Group applies an operational control approach to define its organisational boundary for the purposes of calculating its GHG emissions. The operational control approach reflects emissions from assets and operations where the Group has the authority to implement operating and environmental policies and therefore can directly influence and manage greenhouse gas emissions. Management considers this approach to provide the most relevant representation of the emissions associated with operations under its control. All of Lynas’ operating sites are under the control of the Group. The Group does not operate any joint ventures. Scope 1 and scope 2 emissions for FY26 (tonnes CO2-e) are outlined in the table below. Note, no contractual instru- ments such as renewable energy certificates are included in this reporting. GHG emissions (tonnes CO2 equivalent) Unit FY26 Scope 1 tCO2-e 96,790 Scope 2 (location based) tCO2-e 77,421 Total GHG emissions tCO2-e 174,211 Scope 1 emissions are direct GHG emissions from sources that are controlled by Lynas. In line with the Group’s Climate Change Policy17 and the Group’s commitment to identify opportunities to reduce GHG emissions in our operations, a new 65MW Mt Weld hybrid renewable power station was commissioned and began operation in FY26 with Lynas’ power purchase agreement (PPA) partner Zenith Energy. This power station is under Lynas’ operational control. It includes wind, solar and battery energy storage components and is firmed by high efficiency gas turbines. Scope 2 emissions are indirect emissions from the generation of purchased energy consumed by Lynas. This includes electricity Lynas buys from the electrical grid for use at operating sites in Kalgoorlie, WA; Kuantan, Malaysia as well as at the Group’s head office in Perth, WA and accommodation village in Laverton, WA. Scope 2 emissions are measured using the location-based method which reflects average emissions factors for the electricity grids on which the Group consumes electricity. During the year Lynas continued to enhance Scope 1 and Scope 2 GHG emissions data recording and reporting, including identifying opportunities for data automation to increase efficiency and accuracy and reduce manual data handling. The Group also continues to engage with suppliers to obtain more precise data. 4.2 Methodology for the calculation of GHG emissions Calculation standard For the calculation of the Scope 1 and 2 GHG emissions, the Group follows the guidelines and methodologies of the Greenhouse Gas (GHG) Protocol: Corporate Standard Reporting Standard (2004) and Australian National Greenhouse and Energy Reporting (NGER) legislation. The Group has measured emissions via the operational control approach, as the operational control approach assumes accountability for emissions produced directly or indirectly through its activities. These boundaries reflect all the operations within the consolidated Group. The Group does not operate via any joint ventures. The Group applies emissions factors that best represent its activities as the basis for measuring greenhouse gas emissions. Where applicable, NGER legislation and the NGER Measurement Determination have been used to support the identification of facilities, energy reporting and the calculation of Australian Scope 1 and Scope 2 emissions. 17 https://lynasrareearths.com/wp-content/uploads/2023/11/Lynas-Climate-Change-Policy-28-Nov23.pdf
Page 47
44 www.LynasRareEarths.com Scope Emission Category Activity Methodology Inputs (Estimates may be used where actual data not available) Emission Factors (EF) Used Scope 1 Mobile Combustion Mobile Fuel – Diesel (cars and light vehicles) Calculated by multiplying the quantity of fuel used by the relevant emissions factor Diesel fuel consumption data logs Consistent with Schedule 1, NGER Determination Stationary Petroleum Products – Diesel fuel Calculated by multiplying the quantity of fuel used by the relevant emissions factor Diesel fuel consumption data logs Consistent with Schedule 1, NGER Determination Stationary Combustion Petroleum Products – Liquified Petroleum Gas (LPG) Calculated by multiplying the quantity of fuel used by the relevant emissions factor LPG consump- tion transaction data (invoices) Consistent with Schedule 1, NGER Determination Other Process emissions Carbonate and oxalate decomposi- tion Calculated by multiplying the quantity of mixed rare earth carbonate processed or rare earth oxide produced by stoichio- metric emission factor derived from the balanced chemical reaction Production data – quantity of mixed rare earth carbonate processed or rare earth oxide produced Internally developed due to specific Lynas process Stationary Combustion (Malaysia) Natural Gas Calculated by multiplying the quantity of fuel used by the relevant emissions factor Natural gas consumption transaction data (invoices) NGA-2025 – Australian emissions factor used for consistency as no Malaysian emissions factor available Diesel Fuel- Petroleum products (Malaysia) Other Process Emissions – Petroleum products Calculated by multiplying the quantity of fuel used by the relevant emissions factor Diesel fuel consumption data (invoices) NGA-2025 – Australian emissions factor used for consistency as no Malaysian emissions factor available Liquified Natural Gas-Natural Gas Stationary Combustion – Natural gas Calculated by multiplying the quantity of fuel used by the relevant emissions factor Gas consump- tion readings Consistent with Schedule 1, NGER Determination Scope 2 Electricity Purchased electricity – Location based Calculated by multiplying the quantity of electricity used by the relevant emissions factor Invoice records Consistent with Schedule 1, NGER Determination South- West Interconnected System in Western Australia Electricity – Laverton electricity grid (accommoda- tion village) Purchased electricity – Location based Calculated by multiplying the quantity of electricity used by the relevant emissions factor Invoice records Consistent with Schedule 1, NGER Determination (The Darwin-Katherine Interconnected System) Malaysia – Peninsular Purchased electricity – Location based Calculated by multiplying the quantity of electricity used by the relevant emissions factor Invoice records MyEnergyStats-2024 (Peninsular Malaysia) Piped Supply- supplier specific Purchased Steam – Supplier specific Calculated by multiplying the quantity of steam supplied by the relevant emissions factor Invoice records Ecoinvent v3 – 2013 Sustainability Report
Page 48
45 Lynas Rare Earths Limited | 2026 Annual Report Capital deployment Lynas provides the following summary of capital deployed by the Group in FY26 towards addressing CRROs, primarily the Mt Weld hybrid renewable power station. Metric Amount of capital expenditure deployed towards CRROs Capital expenditure on renewable energy initiatives $12.41m in payments made during FY26. Right of Use Asset $143.8m in Right of use assets recognised in FY26 in relation to the Solar and Wind components of the Mt Weld hybrid renewable power station. 4.3 Performance against climate-related objectives and actions Lynas has an ambition to achieve net zero 2050 and the Group is working to develop GHG reduction targets and a climate transition plan to guide its progress towards achieving the targets. The Board, on the advice of its Audit, Risk and ESG Committee, oversees the setting and monitoring of sustainability objectives, including climate-related actions. Progress towards climate-related actions is reported to the Board and reviewed at each meeting of the Audit, Risk and ESG Committee, which occurs at least twice annually. The Group disclosed the following climate-related actions for FY26 and progress achieved during the year towards each action is outlined in the table below. Lynas continues to prioritise direct action to reduce GHG emissions through effective GHG mitigation actions and climate resilience initiatives. Climate-related actions FY26 progress Complete work towards the Group’s first Climate Transition Plan, including site based GHG reduction target for Lynas Malaysia • Global GHG mapping completed and short, medium and long term GHG reduction opportunities identified for each site. • Climate Working Group assessing and prioritising opportuni- ties for inclusion in the Group’s first Climate Transition Plan. • Baseline established for Lynas Malaysia to enable target setting. Mt Weld hybrid renewable power station commissioned and fully operational • Construction and commissioning completed and full operation commenced 1H FY26; 93% average renewable content delivered in 2H FY26, well above 70% target. Commission new Mt Weld water recycling plant and increase % tailings water recycled • Commissioning completed and Mt Weld water recycling plant demonstrated ability to achieve 90% of tailings water recycled. Plant now in ramp up.
Page 49
46 www.LynasRareEarths.com BASIS OF REPORT The report is based on the guidelines in The Group 100 Incorporated publication Guide to the Review of Operations and Financial Condition. ENVIRONMENTAL REGULATION AND PERFORMANCE The Group is bound by the requirements and guidelines of the relevant environmental protection authorities for the management and rehabilitation of mining tenements owned or previously owned by the Group. Mining tenements are being maintained and rehabilitated following these guidelines. The Group is also bound by the requirements of its operating licence in Malaysia. There have been no known breaches of any of these requirements and guidelines. We continue to focus on ensuring positive relationships with regulators and local communities, and compliance with regulatory requirements in both jurisdictions in which we operate. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS Except as disclosed in the review of operations, the factors and business risks that affect future performance and the subsequent events, there have been no significant changes in the state of affairs of the Group during the year ended 30 June 2026. CORPORATE GOVERNANCE STATEMENT The Corporate Governance Statement of the Group, current on the date that the Directors’ Report is signed in accordance with a resolution of Directors made pursuant to s.298 (2) of the Corporations Act 2001, is located on the Group’s website, www.lynasrareearths.com. SHARES ISSUED UPON EXERCISE OF PERFORMANCE RIGHTS During the financial year 672,830 Performance Rights were exercised as set out in Note E.7 to the Financial Statements. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS During or since the end of the financial year, the Group has paid a premium in respect of a contract insuring all Directors and Officers of the Group against liabilities incurred as a Director or Officer of the Group, to the extent permitted by the Corporations Act 2001, that arise because of the following: a. a wilful breach of duty; or b. a contravention of sections 182 or 183 of the Corporations Act 2001, as permitted by section 199B of the Corporations Act 2001. The insurance contract prohibits disclosure of the premiums payable under the contract. The premiums are not included as part of the Directors’ remuneration in Section H of the Remuneration Report or Note E.7 to the Financial Statements. NON-AUDIT SERVICES During the year Ernst & Young, the Group’s auditor, has performed certain other services in addition to the audit and review of the Financial Statements. Details of amounts paid or payable to the auditor for non-audit services provided during the year are outlined in Note E.3 to the Financial Statements. The Directors have considered the non-audit services provided during the year by the auditor, and are satisfied that the provision of non-audit services by the auditor during the year is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons: • All non-audit services were subject to the corporate governance procedures adopted by the Group and have been reviewed by the Audit, Risk and ESG Committee to ensure they do not impact the integrity and objectivity of the auditor; and
Page 50
47 Lynas Rare Earths Limited | 2026 Annual Report • The non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for the Group, acting as an advocate for the Group or jointly sharing risks and rewards. INDEMNIFICATION AND INSURANCE OF AUDITOR During or since the end of the financial year, the Group entered into an agreement with its auditors, Ernst & Young, indemnifying them against any claims by third parties arising from their report on the Annual Financial Report, except where the liability arises out of conduct involving a lack of good faith. No payment has been made to indemnify Ernst & Young during or since the financial year. COMMITTEE MEMBERSHIP During the financial year, the Group had the following Committees of the Board of Directors: Audit, Risk and ESG Committee, Health, Safety and Environment Committee, and Nomination, Remuneration and Community Committee. Directors acting on the Committees of the Board during the year ended 30 June 2026: For the period from 1 July 2025 to 28 February 2026: Audit, Risk & ESG Health, Safety & Environment Nomination, Remuneration & Community G. Murdoch(c) P. Etienne(c) V. Guthrie(c) K. Bozanic(1) V. Guthrie J. Humphrey P. Etienne J. Beevers G. Murdoch J. Humphrey J. Beevers K. Bozanic(1) (c) Chair of Committee (1) K Bozanic was appointed to the Board effective 17 October 2025 For the period from 1 March 2026 to 30 June 2026: Audit, Risk & ESG Health, Safety & Environment Nomination, Remuneration & Community K. Bozanic(c) P. Etienne(c) V. Guthrie(c) G. Murdoch V. Guthrie J. Humphrey P. Etienne J. Beevers G. Murdoch J. Humphrey J. Beevers K. Bozanic (c) Chair of Committee As summarised in the Corporate Governance Statement, the Audit Risk and ESG Committee consists of independent Directors.
Page 51
48 www.LynasRareEarths.com The number of Directors’ meetings held during the year and the number of Board and Board committee meetings are outlined in the table below: Directors’ Meetings Audit, Risk & ESG(1) Health, Safety & Environment(1) Nomination, Remuneration & Community(1) Number of meetings held: 8 6 3 3 Number of meetings attended: A. Lacaze 8 6 – – P. Etienne 8 6 3 – V. Guthrie 8 – 3 3 J. Humphrey 8 6 – 3 G. Murdoch 7 6 – 3 J. Beevers 8 – 3 3 K. Bozanic 5(2) 4(3) – 2(4) (1) Attendance at subcommittee meetings reflect relevant committee members only. (2) K. Bozanic was appointed as a Director at the AGM on 17 October 2025 and was only eligible to attend 5 of the Directors Meetings during the year. (3) K Bozanic was only eligible to attend 4 Audit, Risk and ESG meetings during FY26 (4) K Bozanic was only eligible to attend 2 Nomination, Remuneration and Community meetings during FY26 AUDITOR’S INDEPENDENCE DECLARATION We have obtained an independence declaration from our auditors, Ernst & Young, which follows the Directors’ Declaration. ROUNDING OF AMOUNTS The Company is of a kind referred to in Corporations Instrument 2016/191 issued by the Australian Securities and Investments Commission, in relation to the “rounding off” of amounts. Amounts in the Directors’ Report and Financial Statements have been rounded off, in accordance with the Instrument, to the nearest thousand dollars, unless otherwise stated. SUBSEQUENT EVENTS On 24 July 2025, Lynas announced the signing of a Memorandum of Understanding (MoU) with Korean permanent magnet manufacturer JS Link to develop a sustainable rare earth permanent magnet value chain in Malaysia. Under the terms of the MoU, Lynas will collaborate with JS Link on the development of a 3,000 tonne capacity NdFeB permanent sintered magnet manufacturing facility near the Lynas Malaysia advanced materials plant in Kuantan, Malaysia. Lynas and JS Link will also collaborate in respect of the supply by Lynas of light and heavy rare earth materials to JS Link to support production of NdFeB permanent sintered magnets. The MoU is non-binding and subject to a definitive agreement. On 27 July 2026, Lynas announced it had entered into binding agreements with LS Eco Energy, a subsidiary of LS Cable & System, for the cross-subscription of convertible instruments to the value of approximately AUD 29m each. The convertible instruments each have a 0% interest rate, a maturity date of 5 years, and are convertible into ordi- nary shares at the election of the holder from 3 years after the date of issue at a conversion price referable to current trading prices. Completion of the issuances of the instruments is subject to customary conditions precedent. Sustainability Report (voluntary) Financial year ended 30 June 2026 The Lynas Sustainability Report (voluntary) for FY26 will be published on the Group’s website, www.lynasrareearths.com, in October 2026.
Page 52
49 Lynas Rare Earths Limited | 2026 Annual Report Remuneration Report – Audited Dear Shareholder, On behalf of the Board, I am pleased to present the Remuneration Report for the 2026 financial year and provide an overview of our remuneration framework and outcomes. Remuneration framework Lynas’ remuneration objective is to maximise shareholder value by the attraction and retention of talented people. To deliver on this, we remunerate our people competitively and consistently with comparable employment market conditions. As the only commercial producer of separated light and heavy rare earths, Lynas’ remuneration frame- work takes into account the unique skills of our people, the global nature of the rare earths business, the complexity of the critical minerals supply chain and priorities for our operations, customers and shareholders, including climate-related initiatives. Remuneration for KMP and Lynas Leadership Team members includes a performance based Short Term Incentive (STI) and Long Term Incentive (LTI). The STI and LTI have been extended to include employees in roles that have considerable influence on outcomes associated with capital management, operational leadership and major capacity growth projects or have specialist expertise in strategic areas for Lynas. Lynas also offers a company-wide employee bonus scheme (excluding those eligible for STI/LTI) to provide all employees an opportunity to contribute to and benefit from the company’s success. There were no changes to executive or Board remuneration structures in FY26. While key Management Personnel (KMP) were consistent for the FY26 financial year, on 13 January 2026, the Chief Executive Officer and Managing Director, Amanda Lacaze, announced her intention to retire from the role after 12 years, effective from 30 June 2026. Amanda will remain employed as a consultant with Lynas until 30 September 2026. Amanda’s significant contribution to Lynas has been recognised internationally, and her retirement package is included in this report. In accordance with the Performance Rights Plan rules, Amanda’s unvested LTI and STI will remain on foot to be tested against the relevant performance conditions. Amanda’s FY26 STI payment has been determined in the usual course with the Board exercising its discretion to make a cash payment in lieu of the usual award of performance rights. An ex-gratia payment equivalent to 6 months of Amanda’s annual fixed remuneration has also been made in recognition of Amanda’s service. The Board is working through a CEO succession process, including a comprehensive global search given the important position of Lynas in the global rare earths market. Lynas Chief Operating Officer, Pol Le Roux, has been appointed Interim Chief Executive Officer while the Board completes the CEO search process. Business performance Following the announcement of the Towards 2030 growth strategy in August 2025, the Group has focused on optimising the capital investments made as part of the Lynas 2025 growth initiative and progressing the Towards 2030 growth priorities. During the year, commissioning of new facilities at Mt Weld and Malaysia were completed and the ramp up of the new processing plant at Mt Weld contributed to the achievement of record half yearly NdPr production in the second half of FY26. From a growth perspective, the Group announced the heavy rare earths expansion project at Lynas Malaysia, produced the first Samarium (Sm) oxide, and progressed partnerships in metal and magnet making during the year. The Group’s FY26 financial performance also reflects improvements in rare earths market dynamics including higher market prices, the introduction of floor prices with strategic customers, and a sales mix that includes pricing independent of market index prices. Remuneration outcomes Remuneration outcomes for FY26 reflect the Group’s business performance and global market dynamics during the year. The Lynas Short Term Incentive (STI) rewards performance in core business drivers. In FY26, this included financial metrics and non-financial metrics, consistent with prior years. The financial performance metrics represented 40% of STI targets and were EBITDA, and NdPr Operating Costs. Non-financial performance metrics represented 60% of STI targets and covered: Strategic Plan/Business Plan; Workplace Health & Safety; Sustainability (including climate-related objectives); and People and Culture. Based on these outcomes, 70% of the STI will vest.
Page 53
50 www.LynasRareEarths.com Remuneration Report – Audited The Long Term Incentive (LTI) for the three year period from 1 July 2023 to 30 June 2026 had three components aligned with the creation of sustainable long term shareholder value. These were: Relative Total Shareholder Returns (TSR) assessed over a three year period, relative to other peer group companies; targets aligned with Lynas’ strategic growth objectives; and sustainability targets. Lynas’ TSR was assessed as being above the 94th percentile of ASX50 to 150 companies which a total positive shareholder return of 147.7% over the period. This excellent performance resulted in a vesting of this metric at maximum. The sustainability target was also exceeded, resulting in this measure vesting at maximum. Disappointingly, the strategic growth target in respect of production capacity was not achieved. As a result, overall achievement against the LTI was 60%. Summary Ensuring that executive remuneration is aligned to delivering performance that drives shareholder value is a priority for the Lynas Board. For this reason, the Board considers it appropriate that a significant proportion of executive remuneration is ‘at risk’ or variable pay. This year has seen the Group initiate and progress the Towards 2030 growth initiative, continue the commissioning and ramp up of facilities constructed as part of the Lynas 2025 capital investment program, optimise the sales pricing mix, and focus on expanding the heavy rare earth product range to meet market demand. As demon- strated by FY26 production and sales outcomes, the team remains focused on meeting customer needs and creating value from the $1.5 billion expansion capital invested in operating assets. The Board welcomes feedback on our remuneration strategy, and we thank you for your support as we continue to focus on attracting and retaining talent at Lynas to build and deliver value for all shareholders. Yours sincerely, Vanessa Guthrie Chair Nomination, Remuneration and Community Committee
Page 54
51 Lynas Rare Earths Limited | 2026 Annual Report This report sets out Lynas’ remuneration framework and outcomes for Key Management Personnel (KMP) for the financial year ended 30 June 2026. This report has been prepared and audited in accordance with the requirements of the Corporations Act 2001 and its regulations. A. LIST OF KMP The KMP during the financial year ended 30 June 2026 were as follows: KMP Position Location Term as KMP Executive Director A. Lacaze CEO and Managing Director Australia Full Financial Year (retired 30 June 2026) Non-Executive Directors J. Humphrey Chairman, Non-Executive Director Australia Full Financial Year J. Beevers Non-Executive Director Australia Full Financial Year P. Etienne Non-Executive Director, Chair of the HSE Committee Australia Full Financial Year V. Guthrie Non-Executive Director, Chair of the Nomination Remuneration & Community Committee Australia Full Financial Year G. Murdoch Non-Executive Director, Chair of the Audit Risk & ESG Committee (to 28 Feb 2026) Australia Full Financial Year K. Bozanic Non-Executive Director, Chair of the Audit Risk & ESG Committee (from 1 March 2026) Australia From 17 October 2025 Executives G. Sturzenegger Chief Financial Officer Malaysia Full Financial Year S. Leonard General Counsel and Company Secretary Australia Full Financial Year P. Le Roux Chief Operating Officer Malaysia Full Financial Year C. Jenney Vice President – Sales and Market Development Australia Full Financial Year M. Ahmad Vice President – Malaysia Malaysia Full Financial Year B. OUR REMUNERATION GOVERNANCE The Nomination, Remuneration and Community Committee is responsible for reviewing and making recom- mendations to the Board on the remuneration arrangements for Directors and Executives. The Nomination, Remuneration and Community Committee assesses, on a regular basis, the appropriateness of the nature and amount of KMP remuneration. In fulfilling these duties and to support effective governance processes, the Committee: • consists of independent Non-Executive Directors and has an independent Chair; • has unrestricted access to management and any relevant documents; and • engages external advisers for assistance to the extent appropriate and necessary (e.g. detailing market levels of remuneration).
Page 55
52 www.LynasRareEarths.com C. OUR REMUNERATION FRAMEWORK Overview Lynas’ remuneration objective is to maximise shareholder benefits by attracting, retaining and motivating talented people, including our Board of Directors and executive management team, at a cost that is acceptable to shareholders. We remunerate our people competitively and consistently with comparable employment market conditions. Lynas is the only commercial producer of separated light and heavy rare earths oxides outside of China and our remuneration framework takes into account the global nature of the rare earths business and the complexity of the critical minerals supply chain. Component Description How does it link to performance and strategy? Fixed Remuneration Fixed remuneration consists of base salary, non-monetary benefits and statutory superannuation contributions. Fixed remuneration is set at a level that enables Lynas to attract and retain talented people, at a cost which is acceptable to shareholders. It reflects the global nature of the rare earths supply chain, macro-eco- nomic factors, the need to attract experienced expatriate personnel to the Lynas Malaysia plant in Gebeng near Kuantan in regional Malaysia and the competitive market for resources personnel in Western Australia. Individual remuneration reflects the role, responsibili- ties, and experience of the relevant employee. Short Term Incentive (STI) The STI program is based on the achievement of annual financial and non-financial goals. Further details of the STI Plan Structure are set out below. STI supports the delivery of annual performance goals which are selected by the Board considering the budget and Lynas’ strategic initiatives. The STI Plan ensures annual remuneration is competitive to facilitate retention of key personnel. Half of the STI is paid as deferred equity (perfor- mance rights). Long Term Incentive (LTI) The LTI program provides a reward for longer term performance. Further details of the LTI Plan Structure are set out below. LTI focuses on long term performance goals which create sustained value for shareholders. LTI is paid as deferred equity (performance rights) which aligns the interests of Executives and shareholders in ensuring the sustainable, long term performance of Lynas. Lynas’ remuneration mix aims to achieve a balance between fixed and performance related components. This contributes to a high performance culture led by the Executive team. The diagrams below illustrate the remuneration mix range for Executives based on the target and maximum LTI and STI opportunities for FY26. The actual remuneration mix for Executives will vary depending on the level of performance relative to the LTI and STI performance objectives. Fixed STI LTI CEO 26.7–28.6% 28.6–33.3% 40.0–42.8% Other Executive KMP 34.0–36.3% 31.9–33.3% 34.0–36.3% Remuneration Report – Audited
Page 56
53 Lynas Rare Earths Limited | 2026 Annual Report Short term incentive structure The structure of the STI Plan is as follows: Description Under the STI Plan, Executive KMP can earn an annual incentive based on performance during the year. STI Plan performance conditions align with Lynas’ annual operational and financial goals. The performance conditions are chosen to incentivise performance that is consistent with desired business outcomes and which contributes to longer term growth in shareholder value. The STI Plan is at risk remuneration. Actual awards depend on performance against the performance conditions. Participants Executive KMP and any employee of Lynas who is invited by the Board are eligible to participate. In addition to the Executive KMP, during FY26, three members of the Lynas Leadership Team and forty nine senior employees who are critical to the delivery of Lynas’ short-term operational and financial goals were invited to participate in the STI Plan. STI Opportunity Target Performance: In FY26, up to 100% of fixed remuneration for CEO. Up to 75% of fixed remuneration for Executive KMP and Lynas Leadership Team. Up to 37.5% of fixed remuneration for Senior Managers. Up to 10% of fixed remuneration for other employees eligible to participate in the STI Plan. Maximum Opportunity: In FY26, up to 125% of fixed remuneration for CEO. Up to 93.75% of fixed remuneration for Executive KMP and Lynas Leadership Team. Up to 46.87% of fixed remuneration for Senior Managers. Up to 11% of fixed remuneration for other employees eligible to participate in the STI Plan. Basis of award Half of the STI opportunity is awarded in cash and half is awarded in performance rights. The number of STI performance rights to be granted is calculated by taking the volume weighted average price of Lynas’ shares for the 5 trading days up to and including the date of Board approval (the PR Value). The relevant STI grant is divided by the PR Value and rounded up to the nearest whole number. Performance Conditions The Board selects both financial and non-financial performance conditions based on the Lynas budget and strategic plan. For FY26, three bands of performance were set for each performance condition: • Threshold: 90% of budget – 75% award • Target: 100% of budget – 100% award • Maximum: 110% of budget – 125% award If performance falls between the Threshold and Maximum levels then awards are pro-rated. No STI Plan awards will be made if there is an ‘at fault’ fatality during the performance period. Financial Performance Conditions (40% weighting) Financial performance conditions are selected by the Board using the approved budget. The performance goals are selected based on the budget and considering market conditions. The financial conditions are assessed annually. For the FY26 STI Plan the two financial performance conditions selected were: (1) EBITDA Target (20% weighting) and (2) NdPr Operating Costs (20% weighting). Non-financial Performance Conditions (60% weighting) The Board selects non-financial conditions for the STI Plan based on the team/individual responsibilities in the context of the Lynas strategic plan. The non-financial conditions are assessed annually. For the FY26 STI Plan the areas selected for assessment were: (1) Progress on Strategic Plan/ Business Plan; (2) Workplace Health and Safety; (3) Sustainability; (4) People & Culture.
Page 57
54 www.LynasRareEarths.com Why were these performance conditions selected? A combination of financial and non-financial performance conditions aligns the STI Plan with growth and sustainable returns for shareholders. The financial conditions selected by the Board in FY26 are measures which directly affect Lynas’ profitability and financial performance. Due to the anticipated increases in capital expenditure for strategic growth projects, EBITDA rather than EBIT was selected by the Board as the financial growth measure. The non-financial performance conditions reflect areas that are critical for the success of Lynas and complement the measures included in the other quantitative STI and LTI targets. Non-financial performance conditions are designed to address areas of particular impor- tance to shareholders. The non-financial performance conditions for FY26 were selected by the Board for the following reasons: • Strategic Initiatives: Initiatives planned to deliver value for shareholders. • Workplace Health & Safety: Critical to continued safe operations. • Sustainability: Important to Lynas’ stakeholders and the future sustainable growth of the business, including climate change. • People & Culture: Important to Lynas’ stakeholders and employee attraction and retention. Performance conditions for the STI Plan are reviewed annually by the Board to ensure they remain aligned with business strategy and shareholder interests. How and when is performance assessed? Performance is assessed annually. For the financial conditions, the Board calculates the results after the end of the performance period. For the non-financial conditions, the Board assesses the performance of the Executives based on the recommendations from the Nomination, Remuneration and Community Committee. Eligibility for dividends Holders of performance rights are not eligible for dividends until the performance rights have been converted into shares. Cessation of employment STI performance rights are subject to a vesting condition of continued employment at Lynas for a period of 12 months after the grant. Cessation of employment or engagement Subject to the terms of the relevant invitation and the Plan: • if an Offeree ceases to be an employee of, or engaged by, the Group in circumstances where the cessation is due to Termination for Cause, then unless the Board determines otherwise, all of their vested (but unexercised) Rights, and all of their unvested Rights, will automatically lapse; and • if an Offeree ceases to be an employee of, or engaged by, the Group in circumstances other than due to Termination for Cause, then unless the Board determines otherwise, all vested (but unexercised) Rights, and all unvested Rights, will remain on issue in accordance with the terms and conditions upon which those Rights were granted. Termination for Cause means termination of employment or engagement of the Offeree due to, amongst other matters, fraud or dishonesty, a material breach of the Offeree’s obli- gations to the Group, any act of gross negligence in the performance of duties or any other reason (including under applicable law or the Offeree’s employment contract, consulting agreement or other form of engagement) that the Board determines constitutes justifica- tion for termination without notice or compensation. Treatment of Rights after cessation of employment or engagement If a person continues to hold Rights after they or their Offeree cease to be employed or engaged by the Group, then the Board may in its discretion determine that some or all of those Rights will lapse if the Board determines that the person has breached any obligation owed to the Group or the circumstances have changed such that it is no longer appropriate for the person to retain the Rights. Remuneration Report – Audited
Page 58
55 Lynas Rare Earths Limited | 2026 Annual Report Clawback The Board may, amongst taking other action (such as requiring any benefits obtained under the Plan to be returned), deem any unvested or vested (but unexercised) Rights to have lapsed if an Offeree takes certain adverse action, including committing a fraudulent or dishonest act or engaging in behaviour which has caused, or is likely to cause, the Company’s reputation to be adversely affected. Change of Control Event If an event occurs that the Board reasonably believes may lead to a Change of Control Event, the Board may determine the treatment (and the timing of such treatment) of any unvested or unexercised Rights. If a Change of Control Event occurs and the Board has not made a determination, then all unvested Rights automatically vest and are deemed to have been exercised, together with any previously vested but unexercised Rights, on the occurrence of the Change of Control Event. A Change of Control Event includes: • a takeover bid that is or becomes free of any defeating conditions where an offeror who previously had voting power of less than 50% in the Company obtains voting power of more than 50%; • shareholders of the Company approving a proposed compromise or arrangement for the reconstruction of the Company or its amalgamation with any other company or companies at a meeting convened by the Court pursuant to section 411(4)(a) of the Corporations Act; • any person becoming bound or entitled to acquire shares in the Company under section 414 (compulsory acquisition following a scheme or contract) or Chapter 6A (compulsory acquisition of securities) of the Corporations Act; • a selective capital reduction being announced in respect of the Company which results in a person who previously had voting power of less than 50% in the Company obtaining voting power of more than 50%; • the Company passes a resolution for voluntary winding up; • an order is made for the compulsory winding up of the Company; or • in any other case, a person obtaining voting power in the Company which the Board determines is sufficient to control the composition of the Board. Disposal restriction A Right is not transferable except where permitted with the prior written consent of the Board or where required by force of law upon death or bankruptcy. Unless the Board determines otherwise, Shares allotted upon exercise of Rights must not be sold, transferred or disposed of by the holder at any time during which trading in the Company’s securities is prohibited in accordance with the Company’s corporate governance policies on share trading activities. Bonus issues If Shares are issued pro rata to the Company’s shareholders by way of bonus issue, the number of Shares over which the Rights are exercisable will be increased by the number of Shares that the Rights Holder would have received if it had exercised the Rights before the record date for the bonus issue. No adjustment will be made to the exercise price (if any). Pro rata issues If Shares are offered pro rata for subscription by the Company’s shareholders (except a bonus issue) during the currency of and prior to exercise of any Rights, the exercise price (if any) of each Right will be adjusted in a manner determined by the Board and in accord- ance with the ASX Listing Rules. Adjustment for reorganisation If there is a reorganisation of the issued capital of the Company then the rights of a Rights Holder will be changed to the extent necessary to comply with the ASX Listing Rules applying to a reorganisation of capital at the time of the reorganisation. New issues Subject to the foregoing, during the currency of any Rights and prior to their exercise, Rights Holders are not entitled to participate in any new issue of securities of the Company as a result of their holding Rights.
Page 59
56 www.LynasRareEarths.com Ranking of Shares Any Shares allotted under the Plan will rank equally with Shares of the same class on issue except as regards any rights attaching to such Shares by reference to a record date prior to the date of their allotment. Quotation If Shares of the same class as those allotted under the Plan are quoted on the Australian Securities Exchange (ASX) at the time of allotment, the Company will apply to the ASX for those Shares to be quoted. Unless the Board determines otherwise in its discretion, the Company will not apply for quotation of any Rights on the ASX. Amendment Subject to the ASX Listing Rules and the Corporations Act, the Board may amend, revoke, vary or add to all or any of the provisions of the Plan, or the terms or conditions of any Right (including vesting conditions). However, without the consent of the Rights Holder, no amendment may be made which adversely affects the rights of the Rights Holder, other than in certain circumstances, including an amendment for the purposes of complying with law or the ASX Listing Rules. Subject to the foregoing, any amendment may be given retrospective effect. Board discretion The Plan is administered by the Board which has power to, amongst other matters, deter- mine appropriate procedures for administration of the Plan consistent with the Plan rules. Except as otherwise expressly provided in the Plan, the Board has absolute and unfettered discretion to act or refrain from acting under or in connection with the Plan or any Rights and in the exercise of any power or discretion under the Plan. The Board may at any time waive in whole or in part any terms or conditions (including any vesting condition) in relation to any Rights. Long term incentive structure This section summarises the LTI grants made in FY26. Description Under the LTI Plan, annual grants of performance rights are made to eligible participants to align remuneration with the creation of sustainable shareholder value over the long term. Participants Executive KMP and any employee of Lynas who is invited by the Board are eligible to participate. In addition to the Executive KMP, during FY26, three members of the Lynas Leadership Team and forty nine senior employees who are critical to the delivery of Lynas’ long-term operational, financial and strategic goals were invited to participate in the Plan. LTI Opportunity CEO – Up to 150% of fixed remuneration Other KMP and Lynas Leadership Team – Up to 100% of fixed remuneration Other invited employees – Up to 25% to 50% of fixed remuneration depending on employee level The number of LTI performance rights to be granted is calculated by taking the volume weighted average price of Lynas’ shares for the 5 trading days up to and including the date of Board approval (the PR Value). The relevant LTI grant is divided by the PR Value and rounded to the nearest whole number. Vesting Date In the first employee share trading window following August 2028. Performance Conditions Three vesting conditions apply to the LTI grants made during FY26: • Relative Total Shareholder Return (TSR) • Strategic Target – Revenue Resilience • Sustainability Target Remuneration Report – Audited
Page 60
57 Lynas Rare Earths Limited | 2026 Annual Report Relative TSR – 50% weighting Relative TSR is assessed over a three year period from 1 July 2025 to 30 June 2028, relative to other companies in the ASX50 – 150 index (Peer Group Companies). For any performance rights to vest under the TSR vesting condition, Lynas’ performance must be equal to or greater than the 51% percentile of Peer Group Companies. The percentage of the performance rights that may vest is determined as follows: Lynas TSR Ranking across the TSR Period Proportion of Performance Rights that vest Below 51st percentile 0% At the 51st percentile 50% Between the 51st percentile and the 76th percentile Between 50% and 100% as determined on a linear basis (rounded to the nearest 5%) At or above 76th percentile 100% Strategic Target – Revenue Resilience – 40% weighting This strategic target will measure the contribution to Lynas’ EBITDA from new products and new customers. FY25 will be used as a baseline. EBITDA contribution from new customers and/ or new products in respect of which there were no sales as at 30 June 2025 will be measured. The vesting scale will be as follows: • 50% vests if EBITDA contribution from new customers and/or new products is greater than or equal to 10%. • 100% will vest if EBITDA contribution from new customers and/or new products is greater than or equal to 15%. Straight line vesting will occur between these thresholds. Sustainability – 10% weighting The Sustainability Target is to achieve greater than targeted 70% average renewable energy penetration at Mt Weld. Why were these performance conditions selected? The vesting conditions for the LTI Plan were selected due to their alignment with Lynas’ long term strategic goals. The Relative TSR Vesting condition was selected because it ensures alignment between competitive shareholder return and reward for the executive. The comparison with peer group companies in the ASX50 – 150 index provides an objective, external market-based performance measure relative to Lynas’ peer group companies. Relative TSR is widely understood and accepted by key stakeholders. The Strategic Target – Revenue Resilience was selected because it will measure Lynas’ ability to broaden its portfolio of products and customers. Broadening Lynas’ customer base in its magnet business and broadening income beyond NdPr sales are key success factors for securing resilient growth. The Sustainability Target has been selected due to the importance of the energy transition to Lynas’ stakeholders. How and when is performance assessed? Relative TSR will be calculated by Lynas and tested by an external adviser as soon as practicable at the end of the performance period. The Strategic and Sustainability Targets will be assessed by the Board after 30 June 2027. Eligibility for dividends Holders of performance rights are not eligible for dividends until the performance rights have been converted into shares.
Page 61
58 www.LynasRareEarths.com Cessation of employment Cessation of employment or engagement Subject to the terms of the relevant invitation and the Plan: • if an Offeree ceases to be an employee of, or engaged by, the Group in circumstances where the cessation is due to Termination for Cause, then unless the Board determines otherwise, all of their vested (but unexercised) Rights, and all of their unvested Rights, will automatically lapse; and • if an Offeree ceases to be an employee of, or engaged by, the Group in circumstances other than due to Termination for Cause, then unless the Board determines otherwise, all vested (but unexercised) Rights, and all unvested Rights, will remain on issue in accordance with the terms and conditions upon which those Rights were granted. Termination for Cause means termination of employment or engagement of the Offeree due to, amongst other matters, fraud or dishonesty, a material breach of the Offeree’s obli- gations to the Group, any act of gross negligence in the performance of duties or any other reason (including under applicable law or the Offeree’s employment contract, consulting agreement or other form of engagement) that the Board determines constitutes justifica- tion for termination without notice or compensation. Treatment of Rights after cessation of employment or engagement If a person continues to hold Rights after they or their Offeree cease to be employed or engaged by the Group, then the Board may in its discretion determine that some or all of those Rights will lapse if the Board determines that the person has breached any obligation owed to the Group or the circumstances have changed such that it is no longer appropriate for the person to retain the Rights. Clawback The Board may, amongst taking other action (such as requiring any benefits obtained under the Plan to be returned), deem any unvested or vested (but unexercised) Rights to have lapsed if an Offeree takes certain adverse action, including committing a fraudulent or dishonest act or engaging in behaviour which has caused, or is likely to cause, the Company’s reputation to be adversely affected. Change of Control Event If an event occurs that the Board reasonably believes may lead to a Change of Control Event, the Board may determine the treatment (and the timing of such treatment) of any unvested or unexercised Rights. If a Change of Control Event occurs and the Board has not made a determination, then all unvested Rights automatically vest and are deemed to have been exercised, together with any previously vested but unexercised Rights, on the occurrence of the Change of Control Event. A Change of Control Event includes: • a takeover bid that is or becomes free of any defeating conditions where an offeror who previously had voting power of less than 50% in the Company obtains voting power of more than 50%; • shareholders of the Company approving a proposed compromise or arrangement for the reconstruction of the Company or its amalgamation with any other company or companies at a meeting convened by the Court pursuant to section 411(4)(a) of the Corporations Act; • any person becoming bound or entitled to acquire shares in the Company under section 414 (compulsory acquisition following a scheme or contract) or Chapter 6A (compulsory acquisition of securities) of the Corporations Act; • a selective capital reduction being announced in respect of the Company which results in a person who previously had voting power of less than 50% in the Company obtaining voting power of more than 50%; • the Company passes a resolution for voluntary winding up; • an order is made for the compulsory winding up of the Company; or • in any other case, a person obtaining voting power in the Company which the Board determines is sufficient to control the composition of the Board. Remuneration Report – Audited
Page 62
59 Lynas Rare Earths Limited | 2026 Annual Report Disposal restriction A Right is not transferable except where permitted with the prior written consent of the Board or where required by force of law upon death or bankruptcy. Unless the Board determines otherwise, Shares allotted upon exercise of Rights must not be sold, transferred or disposed of by the holder at any time during which trading in the Company’s securities is prohibited in accordance with the Company’s corporate governance policies on share trading activities. Bonus issues If Shares are issued pro rata to the Company’s shareholders by way of bonus issue, the number of Shares over which the Rights are exercisable will be increased by the number of Shares that the Rights Holder would have received if it had exercised the Rights before the record date for the bonus issue. No adjustment will be made to the exercise price (if any). Pro rata issues If Shares are offered pro rata for subscription by the Company’s shareholders (except a bonus issue) during the currency of and prior to exercise of any Rights, the exercise price (if any) of each Right will be adjusted in a manner determined by the Board and in accordance with the ASX Listing Rules. Adjustment for reorganisation If there is a reorganisation of the issued capital of the Company then the rights of a Rights Holder will be changed to the extent necessary to comply with the ASX Listing Rules applying to a reorganisation of capital at the time of the reorganisation. New issues Subject to the foregoing, during the currency of any Rights and prior to their exercise, Rights Holders are not entitled to participate in any new issue of securities of the Company as a result of their holding Rights. Ranking of Shares Any Shares allotted under the Plan will rank equally with Shares of the same class on issue except as regards any rights attaching to such Shares by reference to a record date prior to the date of their allotment. Quotation If Shares of the same class as those allotted under the Plan are quoted on the Australian Securities Exchange (ASX) at the time of allotment, the Company will apply to the ASX for those Shares to be quoted. Unless the Board determines otherwise in its discretion, the Company will not apply for quota- tion of any Rights on the ASX. Amendment Subject to the ASX Listing Rules and the Corporations Act, the Board may amend, revoke, vary or add to all or any of the provisions of the Plan, or the terms or conditions of any Right (including vesting conditions). However, without the consent of the Rights Holder, no amendment may be made which adversely affects the rights of the Rights Holder, other than in certain circumstances, including an amendment for the purposes of complying with law or the ASX Listing Rules. Subject to the foregoing, any amendment may be given retrospective effect. Board discretion The Plan is administered by the Board which has power to, amongst other matters, determine appropriate procedures for administration of the Plan consistent with the Plan rules. Except as otherwise expressly provided in the Plan, the Board has absolute and unfettered discretion to act or refrain from acting under or in connection with the Plan or any Rights and in the exercise of any power or discretion under the Plan. The Board may at any time waive in whole or in part any terms or conditions (including any vesting condition) in relation to any Rights.
Page 63
60 www.LynasRareEarths.com D. REMUNERATION OUTCOMES IN FY26 FY26 STI grant performance outcomes An award at 70% of fixed remuneration for CEO and 52.5% of fixed remuneration for executive KMP will be made under the FY26 STI Plan. The table below sets out the outcomes of the FY26 STI Plan. Performance outcome – financial performance conditions Performance condition In FY26, Lynas recorded performance on EBIDTA that exceeded maximum. Performance on NdPr Operating Costs was below the threshold. Outcome Outcome of performance against target CEO Outcome (% of Fixed Rem) Executive KMP Outcome (% of Fixed Rem) Performance Condition Target Actual Weighting Threshold 90% Target 100% Maximum 110% EBITDA Forecast target(1) Greater than 110% of target 20% 25% 18.75% NdPr Operating Costs Forecast Target(1) Less than 90% of Target 20% 0% 0% (1) The NdPr Operating Cost and EBITDA Target are commercial in confidence. The NdPr Operating Cost and EBITDA Targets are set by the Board at the beginning of the relevant financial year based on the annual budget and the Board calculates performance against these set Targets. Performance outcome – non-financial performance conditions Performance Conditions The Board assessed the performance of the Executives in the following areas: (1) Progress on Strategic Plan/Business Plan; (2) Health, Safety and Environment; (3) Sustainability; (4) People & Culture. Outcome – Target Achieved The Board has assessed an award at 45% of fixed remuneration for the CEO and 33.75% of fixed remuneration for executive KMP for the non-financial performance conditions. Performance Condition Achievements Outcome Progress on Strategic Plan/ Business Plan Performance against key strategic priorities as outlined in the Strategic Plan/Business Plan approved by the Board was assessed, including: • Progress towards 10.5kt p.a. production outcome • Improvements in overall equipment effectiveness (OEE) at each site • Delivery of target price premium over market price index • Renewal of Malaysian operating licence • Performance against the Towards 2030 growth strategy 15% Remuneration Report – Audited
Page 64
61 Lynas Rare Earths Limited | 2026 Annual Report Outcome – target achieved continued Performance Condition Target Outcome Progress on Strategic Plan/ Business Plan continued The key performance achievements during FY26 were: Operational Performance: • Mt Weld Expansion project achieving commissioning and ramp up at the top of the Mc Nulty ramp-up curves when compared with similar projects in Australia. • Implementation of the ammonium bicarbonate process in Kalgoorlie to improve MREC quality. • Improvement in overall equipment effectiveness at the Kalgoorlie Rare Earth Processing Facility. • Lynas Malaysia demonstrating maximum capacity of cracking and leaching and solvent extraction with the next steps being to sustain operations at these capacities. Sales & Marketing: • Sales performance in FY26 year to date was strong and achieved a premium against benchmark price of 7.4% against a budgeted premium of 5.1%. • Progress was achieved in relation to direct OEM contracts and the U.S. market. Malaysian Operating Licence • The Malaysian operating licence was renewed for 10 years in March 2026. Lynas Towards 2030 Strategy • Add Resource and Scale: • Establishment of the resource development team and identification of potential new feedstock sources. • Scoping study for the development of the Mt Weld Carbonatite has been completed and a dedicated team established to progress the further stages of the feasibility assessment. • Mineral exploration & development MoU signed with JARE. • Increase Downstream Capacity: • The HRE expansion project for expanded separa- tion in Malaysia was announced in October 2025 and was progressed during the period. • The first product in the expanded product range, Samarium (Sm) oxide, was produced during the financial year. • Expand into the Outside China metal and magnet supply chain: • Progress on partnerships with JS Link and LS Eco Energy. • Updated 12-year offtake and availability agreement with Japan Australia Rare Earths B.V. (JARE) for Japanese industry, with firm offtake for 5,000 tpa NdPr at US$110/kg floor price. • Secured US$96m U.S. Government offtake agreement with NdPr at US$110/kg floor price
Page 65
62 www.LynasRareEarths.com Outcome – target achieved continued Performance Condition Target Outcome Workplace Health and Safety Workplace Health and Safety performance was assessed, including the following measures: Lagging indicator: • TRIFR improvement (Threshold of 3.6 or below). Leading indicators: • Operationalise new risk register across all sites as a safety management tool • Standardise safety definitions and reporting in line with ICMM Health & Safety performance indicators, including mechanisms in root cause analysis • Implement incident reporting training (including near misses) to increase awareness Although the TRIFR improvement threshold was not achieved with an FY26 TRIFR of 4.1 per million hours worked, the 12-month rolling Lost Time Injury Rate reduced to 0.9 per million hours worked at 30 June 2026 (FY25: 1.8) and leading indicators were well progressed. The new risk register was operationalised and is being used by the sites in the assessment of all High Potential incidents. A global review of each critical event is conducted each 6 months involving a forum of all operational general managers and HSE leads. A revised incident reporting and investigation standard was implemented reflecting the ICMM Health & Safety performance indicators. On incident reporting training, a gap analysis was conducted and the roll out of training has commenced at all operating locations. There were no permanent disability injuries during FY26. 10% Sustainability Progress in sustainability was assessed. Including against the following targets: Target: Mt Weld hybrid renewable power station fully commissioned and operating by 30 June 2026. Maintain licences in good standing. Achieve “Satisfactory” or above rating in ATOM audit. Minor reportable loss of containment below FY25 levels. Threshold: Implement reporting improvements to meet requirements for Australian Accounting Standards Board (AASB) S2 Climate-related Disclosures. No severe loss of containment resulting in environmental harm. Stretch: Company-wide climate transition plan approved and implementation commenced at operational level. No reportable loss of containment. 10% Remuneration Report – Audited
Page 66
63 Lynas Rare Earths Limited | 2026 Annual Report Outcome – target achieved continued Performance Condition Target Outcome Sustainability continued The key performance achievements for FY26 were as follows: • Construction of the Mt Weld hybrid renewable power station was completed and full commissioning was completed ahead of schedule in the first half of the financial year. • All licences have been maintained in good standing. • A rating of “Very Satisfactory” was achieved by Lynas Malaysia in its annual ATOM compliance audit completed in January 2026. • Implementation of enhanced GHG reporting has successfully been completed during year, building on the work undertaken in FY25. • No loss of containment resulted in environmental harm during the financial year. People & Culture Progress in people & culture initiatives was assessed, including against the following targets. Target: • Retain >80% of personnel in critical positions as identified by succession planning. • Achieve greater than 80% score for “Agree and Strongly Agree” in Staff Survey for the questions “I would recommend Lynas as a place to work”. • Roll out company-wide human behaviour consequence matrix. • Progress actions identified in 2024 Staff Engagement Survey. Stretch: • Year on year increase in women in operations roles (including at each operating location). • Year on year improvement in employment of indigenous peoples (either directly or through Lynas’ contractors). The key performance achievements in FY26 were as follows: • Retention of key personnel was achieved as there were no departures of personnel in critical positions as identified in the succession planning process other than as a result of planned retirements. • The company-wide human behaviour consequence matrix was rolled out. • Progress on the actions identified in the 2024 All Staff Engagement Survey were progressed as planned. The 2026 staff survey was deferred due to the transition of the CEO process. • Year on year increase in women in operations and indigenous employment was achieved. 10%
Page 67
64 www.LynasRareEarths.com 2023 LTI grant performance outcomes The LTI performance rights issued in August 2023 to executive KMP and LLT members were granted subject to the following vesting conditions: • Relative TSR – 50% weighting • Strategic Targets – 40% weighting • Sustainability Targets – 10% weighting The table below sets the performance outcomes. Performance outcome – relative TSR Vesting Condition Satisfaction of the Relative TSR vesting condition required Lynas’ TSR to be at least at the 51st percentile of ASX 200 companies calculated over the three year period from 1 July 2023 to 30 June 2026. The Relative TSR performance rights will vest in accordance with the following scale: Lynas TSR Ranking Proportion of Performance Rights that vest Below 51st percentile 0% At the 51st percentile 50% Between the 51st percentile and the 76th percentile Between 50% and 100% as determined on a linear basis (rounded up or down to the nearest 5%) At or above 76th percentile 100% Outcome – Achieved at 100% RTSR was assessed by an external consultant, PWC. Lynas’ TSR was at the 90th percentile of ASX200 companies (a total positive shareholder return of 147.7% over the period). 100% of the Relative TSR Performance Rights will vest. Performance outcome – Strategic Targets Vesting Condition The Strategic Target vesting condition was by 30 June 2026 to delivery production capacity of greater than 10.5ktpa. Threshold achievement will occur at 10.5ktpa (50% vesting) with pro-rata assessment to maximum achievement at 12ktpa (100% vesting). Outcome – Not achieved The Strategic Target in respect of production capacity was not achieved. Performance outcome – Sustainability Targets Vesting Condition The Sustainability Target is to deliver installed renewable capacity at Mt Weld with capacity to achieve greater than 50% of the energy requirements at Mt Weld. Outcome – Achieved at 100% The hybrid renewable power station at Mt Weld delivered at over 90% renewable energy capacity. Remuneration Report – Audited
Page 68
65 Lynas Rare Earths Limited | 2026 Annual Report E. LINKING REMUNERATION AND GROUP PERFORMANCE Sections C and D above set out how the LTI and STI Plan Performance Conditions are linked to Lynas’ performance. The table below provides further information about the financial performance of Lynas over the past five years. 30 June 2022 30 June 2023 30 June 2024 30 June 2025 30 June 2026 Revenue ($‘000) 920,014 739,279 463,285 556,512 977,945 Total REO production (tonnes per annum) 15,970 16,780 10,908 10,462 13,089 Sales volume (REO tonnes per annum) 15,263 16,014 12,158 10,970 12,122 Average selling price (per REO tonne) 60.27 46.16 38.10 50.60 80.68 Profit before tax ($‘000) 535,756 347,835 105,500 9,739 256,056 Profit after tax ($‘000) 540,824 310,666 84,514 7,990 222,352 Earnings before interest and tax (EBIT) 540,641 315,504 75,234 6,191 247,357 Shareholder capital ($’000) 1,859,598 2,091,089 2,091,089 2,091,089 3,005,375 Annual average share price $8.51 $8.00 $6.53 $7.24 $15.99 Closing share price at financial year end $8.73 $6.85 $5.93 $8.61 $18.06 Basic earnings / (loss) per share (cents) 59.95 34.05 9.04 0.85 22.15 Diluted earnings / (loss) per share (cents) 58.70 33.92 9.01 0.85 22.06 Separately, changes in the share-based remuneration from one year to the next reflect the effect of amortising the accounting value of options and performance rights over their vesting period and the impact of forfeitures which can relate to both the current and prior periods in a given fiscal period. In certain periods, a negative value may be presented which results when the forfeitures recognised in a period are greater than the accounting amortisation expense for the current portion of the vesting period. F. MINIMUM SHAREHOLDING POLICY FOR BOARD AND KMP The Board has developed a Minimum Shareholding Policy (“MSP”) for Non-Executive Directors, CEO / Managing Director and other KMP in order to create greater alignment between KMP and the shareholder return. The targets for the MSR have been set in FY25 and are required to be met by 30 June 2030. Details of the Lynas MSP are below: Non Executive Directors 100% of base fees, inclusive of committee fees and superannuation contributions Managing Director / CEO 100% of fixed remuneration Other KMP 50% of fixed remuneration The value of shareholdings at 30 June 2026 has been calculated using the 5 day VWAP as at 30 June 2026. The progress of each Director and KMP member towards these targets is outlined in Section J of this report.
Page 69
66 www.LynasRareEarths.com G. SERVICE AGREEMENTS The CEO and Managing Director and Executives each have a services contract/ employment contracts which are on reasonable commercial conditions. The key provisions of the agreement are: CEO and managing director Other executives Type Services contract Employment contract Duration Ongoing Ongoing Notice by Executive 3 months 3 months Notice by Lynas 6 months Termination without notice for serious misconduct 3 – 6 months Termination without notice for serious misconduct Treatment of incentives on termination On resignation, then unless otherwise determined by the Board (in its discretion), the unvested performance rights will continue to be subject to the rules of the LTI Plan until the vesting date, at which time the performance rights will vest in accordance with the rules of the LTI Plan. The Board may exercise its discretion to cancel the performance rights, except where the participant has been retrenched where cancellation will occur within 36 months of the Board’s decision. H. RESIGNATION OF MANAGING DIRECTOR AND CEO A Lacaze resigned as Managing Director and CEO effective 30 June 2026. She remains employed as a consultant until 30 September 2026. Unvested Performance Rights In respect of A Lacaze’s unvested performance rights: • by operation of the terms of the Performance Rights Plan, 21,255 unvested performance rights in respect of the FY25 STI will remain on foot and be eligible to vest in accordance with the terms of the Performance Rights Plan on the basis that A Lacaze remains employed by the Company pursuant to the relevant consul- tancy arrangements. • by operation of the terms of the Performance Rights Plan, the 2023, 2024 and 2025 LTI performance rights granted to A Lacaze and approved by shareholders will remain on foot and be eligible to vest in accordance with the terms of the Performance Rights Plan and the original performance conditions As a good leaver, A Lacaze has retained the following unvested performance rights: Series Grant date Number Vesting Date Expiry date Vesting Targets basis CA 29 Nov 2023 161,263 31 August 2026 31 August 2028 Relative TSR CB 29 Nov 2023 129,010 31 August 2026 31 August 2028 Strategic Targets CC 29 Nov 2023 32,253 24 August 2026 24 August 2028 Sustainability CJ 27 Nov 2024 168,545 31 August 2027 31 August 2029 Relative TSR CK 27 Nov 2024 67,418 31 August 2027 31 August 2029 Strategic Targets CL 27 Nov 2024 67,418 31 August 2027 31 August 2029 Strategic Targets CM 27 Nov 2024 33,709 31 August 2027 31 August 2029 Sustainability CR 26 Nov 2025 21,255 31 August 2026 31 August 2026 N/A – STI with Service period only CS 26 Nov 2025 82,096 30 June 2028 30 June 2030 Relative TSR CT 26 Nov 2025 65,677 30 June 2028 30 June 2030 Strategic Targets CU 26 Nov 2025 16,420 30 June 2028 30 June 2030 Sustainability Total 845,064 Remuneration Report – Audited
Page 70
67 Lynas Rare Earths Limited | 2026 Annual Report FY26 STI A Lacaze will remain eligible to receive STI payment in respect of FY26 in accordance with the terms of the Performance Rights Plans. The award will be determined and paid in the usual course except that the Board has exercised its discretion that a cash payment (in addition to the STI’s usual 50% cash component) will be made to A Lacaze in lieu of the usual award of deferred performance rights. Termination Payments During the year ended 30 June 2026, Lynas paid: • an ex Gratia payment of $772,294, equivalent to 6 months of A Lacaze existing annual fixed remuneration. This is included as a termination payment in Section J of this report. • all remaining annual leave and long service leave obligations to A Lacaze as at 30 June 2026. I. NON-EXECUTIVE DIRECTOR REMUNERATION Remuneration policy Consistent with Lynas’ approach, remuneration of Non-Executive Directors is set at a level that enables Lynas to engage high calibre individuals. We focus on ensuring that the Board of Directors reflects the broad mix of skills, experience and diversity necessary to oversee Lynas in its position as a significant participant in the critical global market for rare earth products. Non-Executive Director fees are set considering: (1) the fees paid by companies of a similar size and/or industry; (2) the time and commitment required; (3) the risk and responsibilities; and (4) the required commercial and industry experience. To ensure independence, Non-Executive Director fees are fixed, and Non-Executive Directors do not receive any performance-related or ‘at-risk’ compensation. Remuneration structure Non-Executive Director fees consist of Director fees and Committee fees. Each Non-Executive Director (other than the Chairman of the Board) received a fee for each committee of which they are members (capped at two commit- tees). The Chairman of the Board does not receive committee fees. The current aggregate fee pool for the Non-Executive Directors of $2.2 million was approved at the AGM held on 29 November 2022. FY26 Director fees remained well below the pool limit, which will enable the appointment of additional Directors in the future. The Non-Executive Director fees payable for the period from 1 July 2025 to 30 June 2026 were: Board fees per annum Amount (inclusive of superannuation) Chairman $375,292 Non-Executive Director $165,750 Committee Chair (Audit, Risk & ESG) $49,725 Committee Chair (Nomination Remuneration & Community/ Health, Safety & Environment) $38,675 Committee member (Audit, Risk & ESG) $24,862 Committee member (Nomination Remuneration & Community/ Health, Safety & Environment) $19,337 Board and committee fees were last reviewed effective from 1 July 2022. The remuneration for each of the Non-Executive Directors for the financial years ended 30 June 2026 and 30 June 2025 is set out in Section I below. J. DETAILS OF REMUNERATION The figures included in the statutory table below for share based payments were not actually provided to the KMP during FY26 or FY25. These amounts are calculated in accordance with accounting standards and are the amortised IFRS fair values of equity and equity-related instruments that have been granted to the executives.
Page 71
68 www.LynasRareEarths.com Short term benefits Post-employment benefits Long term benefits Name Cash salary and fees Other short term employee benefits Non-monetary benefits Termination payments Super and other pension payments Long service leave Share-based payments (net) Performance related % Total Total FY26 $ $ $ $ $ $ $ $ $ Executive Director A. Lacaze(1) 1,525,918 1,646,519(1) – 772,294 30,000 31,896 3,784,348 62% 7,790,975 Non-Executive Directors J. Humphrey 350,000 – – – 30,000 – – 0% 380,000 P. Etienne 232,400 – – – – – – 0% 232,400 G. Murdoch(2) 203,525 – – – 24,423 – – 0% 227,948 V. Guthrie 226,800 – – – – – – 0% 226,800 J. Beevers 207,200 – – – – – – 0% 207,200 K. Bozanic(3) 130,665 – – – 15,680 – – 0% 146,345 Executives S. Leonard 521,279 117,298 – – 30,000 9,854 568,481 55% 1,246,912 G. Sturzenegger 663,826 150,051 – – – – 693,464 56% 1,507,341 C Jenney 770,519 183,763 – – 30,000 14,541 830,593 55% 1,829,416 P. Le Roux 835,294 201,877 115,498 – 105,314 – 961,690 52% 2,219,673 M. Ahmad 447,601 175,520 – – 58,740 – 566,587 59% 1,248,448 Total 6,115,027 2,475,028 115,498 772,294 324,157 56,291 7,405,163 57% 17,263,458 (1) A. Lacaze resigned effective 30 June 2026. Included in her short term employee benefits include vesting of cash short term incentives related to the year ended 30 June 2026 and annual leave entitlements paid. Included in the share-based payment long-term benefits is the acceleration of vesting of FY24, FY25 and FY26 LTIs. Refer to Table H for details. (2) G. Murdoch served as Chair of the Audit, Risk & ESG Committee to 28 February 2026. (3) K. Bozanic was appointed to the Board effective 17 October 2025 and was appointed as Chair of the Audit, Risk & ESG Committee effective 1 March 2026. Short term benefits Post-employment benefits Long term benefits Name Cash salary and fees Other short term employee benefits Non-monetary benefits Termination payments Super and other pension payments Long service leave Share-based payments (net) Performance related % Total Total FY25 $ $ $ $ $ $ $ $ $ Executive Director A. Lacaze 1,480,600 432,629 – – 29,932 36,972 1,199,305 51% 3,179,438 Non-Executive Directors J. Humphrey 350,000 – – – 29,932 – – 0% 379,932 P. Etienne 231,363 – – – – – – 0% 231,363 G. Murdoch 212,500 – – – 24,438 – – 0% 236,938 V. Guthrie 225,788 – – – – – – 0% 225,788 J. Beevers 190,319 – – – 15,956 – – 0% 206,275 Executives S. Leonard 505,222 114,227 – – 29,932 8,421 382,347 48% 1,040,149 G. Sturzenegger 642,198 150,938 – – – – 456,229 49% 1,249,365 C Jenney 747,203 169,780 – – 29,932 12,453 584,836 49% 1,544,204 P. Le Roux 831,007 265,916 97,700 – 91,032 – 661,288 48% 1,946,943 M. Ahmad 427,535 130,617 – – 63,741 – 372,211 51% 994,104 Total 5,843,735 1,264,107 97,700 – 314,895 57,846 3,656,216 44% 11,234,499 Remuneration Report – Audited
Page 72
69 Lynas Rare Earths Limited | 2026 Annual Report K. KMP EQUITY HOLDINGS 1. Shareholdings The following table outlines the shares held directly, indirectly and beneficially by directors and KMP as at 30 June 2026. Name Balance at beginning of year Purchased during the year On exercise of performance rights Sold during the year Balance at end of year Minimum shareholding policy* A. Lacaze(1) 2,199,694 – 148,675 (329,688) 2,018,681 Met P. Etienne 75,284 2,265 – – 77,549 Met J. Humphrey 70,000 2,265 – – 72,265 Met G. Murdoch 161,007 2,265 – – 163,272 Met V. Guthrie 15,000 1,740 – – 16,740 Met J. Beevers 27,787 2,265 – – 30,052 Met K. Bozanic – – – – – – S. Leonard 56,148 – 37,829 (37,829) 56,148 Met G. Sturzenegger 694,119** – 44,278 (338,397) 400,000 Met C. Jenney 37,993 – 54,959 (32,910) 60,042 Met P. Le Roux 315,541 – 62,610 (308,091) 70,060 Met M. Ahmad 181,876 – 35,645 (195,574) 21,947 Met Total 3,834,449 10,800 383,996 (1,242,489) 2,986,756 (1) A. Lacaze resigned effective 30 June 2026. * The minimum shareholding test is measured using the 5 day VWAP to 30 June 2026 (FY26: $18.68). The minimum shareholding require- ment is required to be met by 30 June 2030. ** The opening shareholding for G Sturzenegger has been adjusted to reflect a sale of 10,126 shares during FY25.
Page 73
70 www.LynasRareEarths.com 2. Share based remuneration – performance rights Performance Rights are issued with no consideration payable on exercise. As at year end the Group had on issue to directors and KMP the following Performance Rights to acquire ordinary fully paid shares: Series Grant date Number Date vested and exercisable Expiry date Exercise price Fair Value per performance right at grant date BW 13 Nov 2023 237,488 31 August 2026 25 August 2028 $ 0.00 $4.42 BX 13 Nov 2023 189,992 31 August 2026 25 August 2028 $ 0.00 $6.91 BY 13 Nov 2023 47,500 31 August 2026 25 August 2028 $ 0.00 $6.91 CA 29 Nov 2023 161,263 31 August 2026 25 August 2028 $ 0.00 $3.84 CB 29 Nov 2023 129,010 31 August 2026 25 August 2028 $ 0.00 $6.62 CC 29 Nov 2023 32,253 24 August 2026 24 August 2028 $ 0.00 $6.62 CF 17 March 2025 247,286 31 August 2027 31 August 2029 $0.00 $5.55 CG 17 March 2025 98,915 31 August 2027 31 August 2029 $0.00 $7.61 CB 29 November 2023 129,010 31 August 2026 25 August 2028 $0.00 $6.62 CC 29 November 2023 32,253 24 August 2026 24 August 2028 $0.00 $6.62 CD 17 March 2025 141,696 31 August 2025 31 August 2025 $0.00 $7.61 CE 27 November 2024 84,273 31 August 2025 31 August 2025 $0.00 $6.87 CF 17 March 2025 247,286 31 August 2027 31 August 2029 $0.00 $5.55 CG 17 March 2025 98,915 31 August 2027 31 August 2029 $0.00 $7.61 CH 17 March 2025 98,915 31 August 2027 31 August 2029 $0.00 $7.61 CI 17 March 2025 49,458 31 August 2027 31 August 2029 $0.00 $7.61 CJ 27 November 2024 168,545 31 August 2027 31 August 2029 $0.00 $4.43 CK 27 November 2024 67,418 31 August 2027 31 August 2029 $0.00 $6.87 CL 27 November 2024 67,418 31 August 2027 31 August 2029 $0.00 $6.87 CM 27 November 2024 33,709 31 August 2027 31 August 2029 $0.00 $6.87 CN 25-May-26 36,260 31 August 2026 31 August 2026 $0.00 $19.00 CO 25-May-26 124,486 30 June 2028 30 June 2030 $0.00 $17.36 CP 25-May-26 99,590 30 June 2028 30 June 2030 $0.00 $19.00 CQ 25-May-26 24,899 30 June 2028 30 June 2030 $0.00 $19.00 CR (AGM) 26-Nov-25 21,255 31 August 2026 31 August 2026 $0.00 $15.00 CS (AGM) 26-Nov-25 82,096 30 June 2028 30 June 2030 $0.00 $12.48 CT (AGM) 26-Nov-25 65,677 30 June 2028 30 June 2030 $0.00 $15.00 CU (AGM) 26-Nov-25 16,420 30 June 2028 30 June 2030 $0.00 $15.00 Total 2,099,853 Remuneration Report – Audited
Page 74
71 Lynas Rare Earths Limited | 2026 Annual Report Fair value of performance rights The fair value of each Performance Right is estimated on the date it is granted using volume-weighted average share price, Monte Carlo and Binomial valuation methodologies. The following assumptions were considered in the valuation of Performance Rights granted during the year ended 30 June 2026: PRs issued to employees other than CEO PRs issued to CEO Series CN Series CO Series CP & CQ Series CR Series CS Series CT & CU Grant date 25 May 2026 25 May 2026 25 May 2026 26 Nov 2025 26 Nov 2025 26 Nov 2025 Fair Value per right $19.00 $17.36 $19.00 $15.00 $12.48 $15.00 Exercise price $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Dividend yield 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% Expected volatility 45% 45% 45% 45% 45% 45% Risk-free Rate 4.6% 4.6% 4.6% 3.9% 3.9% 3.9% Expiry date 31 Aug 2026 31 Aug 2030 31 Aug 2030 31 Aug 2026 31 Aug 2030 31 Aug 2030 The life of the Performance Right is up to 5 years from date of grant (as specified above) and is therefore not necessarily indicative of exercise patterns that may occur. The resulting weighted average fair values for all Performance Rights granted for the benefit of Directors and KMP during the year are: Grant date Number of performance rights Fair value per instrument at valuation date Exercise price per instrument First exercise date Last exercise or expiry date 25 May 2026 36,260 $19.00 $ 0.00 31 August 2026 31 August 2026 25 May 2026 124,486 $17.36 $ 0.00 31 August 2028 31 August 2030 25 May 2026 99,590 $19.00 $ 0.00 31 August 2028 31 August 2030 25 May 2026 24,899 $19.00 $ 0.00 31 August 2028 31 August 2030 26 November 2025 21,255 $15.00 $ 0.00 31 August 2026 31 August 2026 26 November 2025 82,096 $12.48 $ 0.00 31 August 2028 31 August 2030 26 November 2025 65,677 $15.00 $ 0.00 31 August 2028 31 August 2030 26 November 2025 16,420 $15.00 $ 0.00 31 August 2028 31 August 2030 Total 470,683 Except as specified in the table above, all Performance Rights granted for the benefit of Directors and KMP have three-year vesting periods. The Performance Rights are exercisable up to five years after issue date, subject to achievement of the relevant performance hurdles.
Page 75
72 www.LynasRareEarths.com The following tables outline the Performance Rights granted for the benefit of Directors and KMP during the 2025 and 2026 financial years and those Performance Rights which have vested at each respective year-end. 30 June 2026 Balance at beginning of year Granted Grant date Exercised Forfeited Net change Balance at end of year A. Lacaze(1) 1,001,494 185,448 26 Nov 2025 (148,675) (193,206) (156,433) 845,061 P. Etienne – – – – – – – J. Humphrey – – – – – – – G. Murdoch – – – – – – – V. Guthrie – – – – – – – J. Beevers – – – – – – – K. Bozanic – – – – – – – S Leonard 238,396 44,287 25 May 2026 (37,829) (45,274) (38,816) 199,580 G. Sturzenegger 281,661 54,971 25 May 2026 (44,278) (52,819) (42,126) 239,535 P. Le Roux 394,157 76,517 25 May 2026 (62,610) (75,258) (61,351) 332,806 M. Ahmad 225,119 45,150 25 May 2026 (35,645) (41,371) (31,866) 193,253 C. Jenney 346,412 64,310 25 May 2026 (54,959) (66,145) (56,794) 289,618 Total 2,487,239 470,683 (383,996) (474,073) (387,386) 2,099,853 (1) A Lacaze resigned effective 30 June 2026. 30 June 2025 Balance at beginning of year Granted Grant date Exercised Forfeited Net change Balance at end of year A. Lacaze 1,021,677 421,363 27 Nov 2024 (337,056) (104,490) (20,183) 1,001,494 P. Etienne – – – – – – – J. Humphrey – – – – – – – G. Murdoch – – – – – – – V. Guthrie – – – – – – – J. Beevers – – – – – – – S Leonard 184,843 102,097 17 March 2025 (30,182) (18,362) 53,553 238,396 G. Sturzenegger 219,488 119,765 17 March 2025 (36,167) (21,425) 62,173 281,661 P. Le Roux 299,399* 168,498 17 March 2025 (48,000) (25,740) 94,758 394,157 M. Ahmad 172,187 98,134 17 March 2025 (28,381) (16,821) 52,932 225,119 C. Jenney 253,987 147,779 17 March 2025 (37,469) (17,885) 92,425 346,412 Total 2,151,581 1,057,636 (517,255) (204,723) (335,658) 2,487,239 At 30 June 2026, no KMP had any performance rights that had vested and were exercisable (30 June 2025: nil). The Directors’ report is signed in accordance with a resolution of Directors made pursuant to s.298 (2) of the Corporations Act 2001. On behalf of the Directors, John Humphrey Chair Brisbane, 26 August 2026 Remuneration Report – Audited
Page 76
73 Lynas Rare Earths Limited | 2026 Annual Report The Directors declare that: (a) in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; (b) in the Directors’ opinion, the attached financial report is in compliance with International Financial Reporting Standards, as stated in the Basis of preparation note to the Financial Statements; (c) the consolidated entity disclosure statement required by section 295(3A) of the Corporations Act is true and correct; (d) in the Directors’ opinion, the attached financial report and notes thereto are in accordance with the Corporations Act 2001, including compliance with Australian Accounting Standards and giving a true and fair view of the financial position and performance of the Group; and (e) Directors have been given the declarations required by s.295A of the Corporations Act 2001. At the date of this declaration, the Company is within the class of companies affected by Corporations Instrument 98/1418. The nature of the deed of cross guarantee is such that each company which is party to the deed guaran- tees to each creditor payment in full of any debt in accordance with the deed of cross guarantee. In the Directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which the Corporations Instrument applies, as detailed in Note E.6 to the Financial Statements will, as a Group, be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee. Signed in accordance with a resolution of the directors made pursuant to s.295 (5) of the Corporations Act 2001. On behalf of the Directors, John Humphrey Chair Brisbane, 26 August 2026 Directors’ Declaration
Page 77
74 www.LynasRareEarths.com Auditor’s Independence Declaration A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Auditor’s independence declaration to the directors of Lynas Rare Earths Limited As lead auditor for the audit of the financial report for Lynas Rare Earths Limited and for the review of the selective sustainability information in the sustainability report for the financial year ended 30 June 2026, I declare to the best of my knowledge and belief, there have been: a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit and review. b. No contraventions of any applicable code of professional conduct in relation to the audit and review. c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit and review. This declaration is in respect of Lynas Rare Earths Limited and the entities it controlled during the financial year. Ernst & Young T S Hammond Partner 26 August 2026 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Auditor’s independence declaration to the directors of Lynas Rare Earths Limited As lead auditor for the audit of the financial report of Lynas Rare Earths Limited for the financial year ended 30 June 2025, I declare to the best of my knowledge and belief, there have been: a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; b. No contraventions of any applicable code of professional conduct in relation to the audit; and c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit. This declaration is in respect of Lynas Rare Earths Limited and the entities it controlled during the financial year. Ernst & Young T S Hammond Partner 28 August 2025 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Auditor’s independence declaration to the directors of Lynas Rare Earths Limited As lead auditor for the audit of the financial report for Lynas Rare Earths Limited and for the review of the selective sustainability information in the sustainability report for the financial year ended 30 June 2026, I declare to the best of my knowledge and belief, there have been: a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit and review. b. No contraventions of any applicable code of professional conduct in relation to the audit and review. c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit and review. This declaration is in respect of Lynas Rare Earths Limited and the entities it controlled during the financial year. Ernst & Young T S Hammond Partner 26 August 2026
Page 78
75 Lynas Rare Earths Limited | 2026 Annual Report Independent Auditor’s Report A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2025, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information,the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2025, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information,the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2026, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information, the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2026 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to audits of the financial report of public interest entities in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For the matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2026, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information, the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2026 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to audits of the financial report of public interest entities in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For the matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2026, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information, the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2026 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to audits of the financial report of public interest entities in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For the matter below, our description of how our audit addressed the matter is provided in that context.
Page 79
76 www.LynasRareEarths.com A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2025, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information,the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2025, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information,the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Page 2 We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report section of our report, including in relation to this matter. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matter below, provide the basis for our audit opinion on the accompanying financial report. Restoration and rehabilitation Why significant How our audit addressed the key audit matter The Group incurs obligations for asset and site restoration and rehabilitation, which includes requirements under its Full Operating Stage License in Malaysia to manage water leached purification (WLP) and neutralisation underflow (NUF) residues arising from its production process. As at 30 June 2026 the Group’s consolidated statement of financial position includes provisions of $338,805,000 in respect of such obligations as disclosed in Note D.5. The calculation of restoration provisions requires significant judgement and estimation, including in determining: ▪ The timing and extent of restoration obligations and activities required to comply with applicable environmental legislation and regulations. ▪ Cost estimates and restoration methods, informed by the work of specialist engineers and technical advisors. ▪ Liability-specific discount rates and inflation assumptions used to determine the present value of future obligations. The significant assumptions and estimates outlined above are inherently subjective. Changes to these assumptions can lead to changes in the restoration provisions. In this context, the disclosures set out in Note D.5 provide important information about the assumptions made in the calculation of the restoration provision and uncertainties at 30 June 2026. Due to the value of the provision relative to total liabilities and the significant degree of estimation and judgment used to determine the rehabilitation provision, this was considered to be a key audit matter. Our audit procedures included the following: ▪ Evaluating management's process for identifying legal and regulatory obligations for restoration and decommissioning and ensuring completeness of locations, infrastructure and facilities. ▪ Assessing the qualifications, competence and objectivity of the Group’s experts, the work of whom, formed the basis of the Group’s rehabilitation cost estimates for the Lynas Advanced Materials Plant, Kalgoorlie Rare Earths Facility and Mt Weld sites, and evaluating whether the estimates prepared by those experts were appropriately reflected in the provision calculations. ▪ Inquiring about any changes in license conditions with respect to the management of WLP and NUF residues and assessing the appropriateness of changes in assumptions and calculations within the rehabilitation cost estimates as a result of these changed conditions. ▪ With the involvement of our subject matter specialists, assessing the appropriateness of the rehabilitation cost estimates, including evaluating changes in disturbed areas, cost assumptions and other key inputs to assess the reasonableness of management's current year estimate. ▪ Comparing current year cost estimates to those of the prior year and considering explanations from management and experts for observed changes. ▪ Testing the mathematical accuracy of the rehabilitation models and assessed the appropriateness of the assumed timing of cashflows, inflation and discount rate assumptions. ▪ Agreeing payments made during the year in connection with the rehabilitation of WLP and NUF to bank statements. ▪ Assessing the appropriateness of the classification of the rehabilitation provision as a current and non current liability at 30 June 2026. ▪ Assessing the adequacy of the disclosures relating to the Group’s provisions for restoration and rehabilitation in the notes to the financial statements. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2026, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information, the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2026 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to audits of the financial report of public interest entities in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For the matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Page 2 We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report section of our report, including in relation to this matter. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matter below, provide the basis for our audit opinion on the accompanying financial report. Restoration and rehabilitation Why significant How our audit addressed the key audit matter The Group incurs obligations for asset and site restoration and rehabilitation, which includes requirements under its Full Operating Stage License in Malaysia to manage water leached purification (WLP) and neutralisation underflow (NUF) residues arising from its production process. As at 30 June 2026 the Group’s consolidated statement of financial position includes provisions of $338,805,000 in respect of such obligations as disclosed in Note D.5. The calculation of restoration provisions requires significant judgement and estimation, including in determining: ▪ The timing and extent of restoration obligations and activities required to comply with applicable environmental legislation and regulations. ▪ Cost estimates and restoration methods, informed by the work of specialist engineers and technical advisors. ▪ Liability-specific discount rates and inflation assumptions used to determine the present value of future obligations. The significant assumptions and estimates outlined above are inherently subjective. Changes to these assumptions can lead to changes in the restoration provisions. In this context, the disclosures set out in Note D.5 provide important information about the assumptions made in the calculation of the restoration provision and uncertainties at 30 June 2026. Due to the value of the provision relative to total liabilities and the significant degree of estimation and judgment used to determine the rehabilitation provision, this was considered to be a key audit matter. Our audit procedures included the following: ▪ Evaluating management's process for identifying legal and regulatory obligations for restoration and decommissioning and ensuring completeness of locations, infrastructure and facilities. ▪ Assessing the qualifications, competence and objectivity of the Group’s experts, the work of whom, formed the basis of the Group’s rehabilitation cost estimates for the Lynas Advanced Materials Plant, Kalgoorlie Rare Earths Facility and Mt Weld sites, and evaluating whether the estimates prepared by those experts were appropriately reflected in the provision calculations. ▪ Inquiring about any changes in license conditions with respect to the management of WLP and NUF residues and assessing the appropriateness of changes in assumptions and calculations within the rehabilitation cost estimates as a result of these changed conditions. ▪ With the involvement of our subject matter specialists, assessing the appropriateness of the rehabilitation cost estimates, including evaluating changes in disturbed areas, cost assumptions and other key inputs to assess the reasonableness of management's current year estimate. ▪ Comparing current year cost estimates to those of the prior year and considering explanations from management and experts for observed changes. ▪ Testing the mathematical accuracy of the rehabilitation models and assessed the appropriateness of the assumed timing of cashflows, inflation and discount rate assumptions. ▪ Agreeing payments made during the year in connection with the rehabilitation of WLP and NUF to bank statements. ▪ Assessing the appropriateness of the classification of the rehabilitation provision as a current and non current liability at 30 June 2026. ▪ Assessing the adequacy of the disclosures relating to the Group’s provisions for restoration and rehabilitation in the notes to the financial statements.
Page 80
77 Lynas Rare Earths Limited | 2026 Annual Report A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2025, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information,the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2025, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information,the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Page 3 Information other than the financial report and auditor’s report thereon The directors are responsible for the other information. The other information comprises the information included in the Company’s 2026 Annual Report other than the financial report and our auditor’s report thereon and the Company’s Sustainability Report. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon in this auditor’s report, with the exception of the Remuneration Report and our related assurance opinion. We have issued a separate auditor’s report on selective sustainability information included in the Sustainability Report. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of: ▪ The financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; and ▪ The consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001; and for such internal control as the directors determine is necessary to enable the preparation of: ▪ The financial report (other than the consolidated entity disclosure statement) that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and ▪ The consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Page 81
78 www.LynasRareEarths.com A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2025, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information,the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2025, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information,the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Page 4 Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor ’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ▪ Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ▪ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. ▪ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. ▪ Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. ▪ Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. ▪ Plan and perform the Group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the Group financial report. We are responsible for the direction, supervision and review of the audit work performed for the purposes of the Group audit. We remain solely responsible for our audit opinion.
Page 82
79 Lynas Rare Earths Limited | 2026 Annual Report A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Auditor’s independence declaration to the directors of Lynas Rare Earths Limited As lead auditor for the audit of the financial report of Lynas Rare Earths Limited for the financial year ended 30 June 2025, I declare to the best of my knowledge and belief, there have been: a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; b. No contraventions of any applicable code of professional conduct in relation to the audit; and c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit. This declaration is in respect of Lynas Rare Earths Limited and the entities it controlled during the financial year. Ernst & Young T S Hammond Partner 28 August 2025 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2025, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information,the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Page 5 We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the audit of the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2026. In our opinion, the Remuneration Report of Lynas Rare Earths Limited for the year ended 30 June 2026, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Ernst & Young T S Hammond Partner Perth 26 August 2026
Page 83
80 www.LynasRareEarths.com Year 1 Scope Limited Assurance Report A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Auditor’s independence declaration to the directors of Lynas Rare Earths Limited As lead auditor for the audit of the financial report of Lynas Rare Earths Limited for the financial year ended 30 June 2025, I declare to the best of my knowledge and belief, there have been: a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; b. No contraventions of any applicable code of professional conduct in relation to the audit; and c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit. This declaration is in respect of Lynas Rare Earths Limited and the entities it controlled during the financial year. Ernst & Young T S Hammond Partner 28 August 2025 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s review report to the members of Lynas Rare Earths Limited Conclusion We have conducted a review of the following information in the Sustainability Report of Lynas Rare Earths and its subsidiaries (collectively the Group) for the year ended 30 June 2026 (the ‘selective sustainability information’) as required by Australian Standard on Sustainability Assurance ASSA 5010 Timeline for Audits and Reviews of Information in Sustainability Reports under the Corporations Act 2001 issued by the Auditing and Assurance Standards Board (AUASB): Selective sustainability information Criteria: Reporting requirement of AASB S2 Climate-related Disclosures (AASB S2) (including related general disclosures required by Appendix D) Location in Sustainability Report Governance Paragraph 6 Section 2.1 on pages 40 to 42 Strategy (risk and opportunities) Subparagraphs 9(a), 10(a) and 10(b) Section 1.4 on pages 35 to 38 Scope 1 and 2 emissions Subparagraphs 29(a)(i)(1) to (2) and 29(a)(ii) to (v) Sections 4.1 to 4.2 on pages 45 to 46 The requirements of AASB S2 identified in the table above form the criteria relevant to the selective sustainability information and apply under Division 1 of Part 2M.3 of the Corporations Act 2001 (the Act). We have not become aware of any matter in the course of our review that makes us believe that the selective sustainability information specified in the table above does not comply with Division 1 of Part 2M.3 of the Corporations Act 2001. Basis for conclusion Our review has been conducted in accordance with Australian Standard on Sustainability Assurance ASSA 5000 General Requirements for Sustainability Assurance Engagements (ASSA 5000) issued by the AUASB. Our review includes obtaining limited assurance about whether the selective sustainability information is free from material misstatement. In applying the relevant criteria, we note that subsection 296C(1) of the Act includes a requirement to comply with AASB S2. Our conclusion is based on the procedures we have performed and the evidence we have obtained in accordance with ASSA 5000. The procedures in a review vary in nature and timing from, and are less in extent than for, an audit. Consequently, the level of assurance obtained in a review is substantially lower than the assurance that would have been obtained had an audit been performed. See the Summary of the Work performed section of our report. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s review report to the members of Lynas Rare Earths Limited Conclusion We have conducted a review of the following information in the Sustainability Report of Lynas Rare Earths and its subsidiaries (collectively the Group) for the year ended 30 June 2026 (the ‘selective sustainability information’) as required by Australian Standard on Sustainability Assurance ASSA 5010 Timeline for Audits and Reviews of Information in Sustainability Reports under the Corporations Act 2001 issued by the Auditing and Assurance Standards Board (AUASB): Selective sustainability information Criteria: Reporting requirement of AASB S2 Climate-related Disclosures (AASB S2) (including related general disclosures required by Appendix D) Location in Sustainability Report Governance Paragraph 6 Section 2.1 on pages 40 to 42 Strategy (risk and opportunities) Subparagraphs 9(a), 10(a) and 10(b) Section 1.4 on pages 35 to 38 Scope 1 and 2 emissions Subparagraphs 29(a)(i)(1) to (2) and 29(a)(ii) to (v) Sections 4.1 to 4.2 on pages 45 to 46 The requirements of AASB S2 identified in the table above form the criteria relevant to the selective sustainability information and apply under Division 1 of Part 2M.3 of the Corporations Act 2001 (the Act). We have not become aware of any matter in the course of our review that makes us believe that the selective sustainability information specified in the table above does not comply with Division 1 of Part 2M.3 of the Corporations Act 2001. Basis for conclusion Our review has been conducted in accordance with Australian Standard on Sustainability Assurance ASSA 5000 General Requirements for Sustainability Assurance Engagements (ASSA 5000) issued by the AUASB. Our review includes obtaining limited assurance about whether the selective sustainability information is free from material misstatement. In applying the relevant criteria, we note that subsection 296C(1) of the Act includes a requirement to comply with AASB S2. Our conclusion is based on the procedures we have performed and the evidence we have obtained in accordance with ASSA 5000. The procedures in a review vary in nature and timing from, and are less in extent than for, an audit. Consequently, the level of assurance obtained in a review is substantially lower than the assurance that would have been obtained had an audit been performed. See the Summary of the Work performed section of our report. 38 to 40 33 to 36 43 44
Page 84
81 Lynas Rare Earths Limited | 2026 Annual Report A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2025, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information,the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2025, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information,the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s review report to the members of Lynas Rare Earths Limited Conclusion We have conducted a review of the following information in the Sustainability Report of Lynas Rare Earths and its subsidiaries (collectively the Group) for the year ended 30 June 2026 (the ‘selective sustainability information’) as required by Australian Standard on Sustainability Assurance ASSA 5010 Timeline for Audits and Reviews of Information in Sustainability Reports under the Corporations Act 2001 issued by the Auditing and Assurance Standards Board (AUASB): Selective sustainability information Criteria: Reporting requirement of AASB S2 Climate-related Disclosures (AASB S2) (including related general disclosures required by Appendix D) Location in Sustainability Report Governance Paragraph 6 Section 2.1 on pages 40 to 42 Strategy (risk and opportunities) Subparagraphs 9(a), 10(a) and 10(b) Section 1.4 on pages 35 to 38 Scope 1 and 2 emissions Subparagraphs 29(a)(i)(1) to (2) and 29(a)(ii) to (v) Sections 4.1 to 4.2 on pages 45 to 46 The requirements of AASB S2 identified in the table above form the criteria relevant to the selective sustainability information and apply under Division 1 of Part 2M.3 of the Corporations Act 2001 (the Act). We have not become aware of any matter in the course of our review that makes us believe that the selective sustainability information specified in the table above does not comply with Division 1 of Part 2M.3 of the Corporations Act 2001. Basis for conclusion Our review has been conducted in accordance with Australian Standard on Sustainability Assurance ASSA 5000 General Requirements for Sustainability Assurance Engagements (ASSA 5000) issued by the AUASB. Our review includes obtaining limited assurance about whether the selective sustainability information is free from material misstatement. In applying the relevant criteria, we note that subsection 296C(1) of the Act includes a requirement to comply with AASB S2. Our conclusion is based on the procedures we have performed and the evidence we have obtained in accordance with ASSA 5000. The procedures in a review vary in nature and timing from, and are less in extent than for, an audit. Consequently, the level of assurance obtained in a review is substantially lower than the assurance that would have been obtained had an audit been performed. See the Summary of the Work performed section of our report. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Page 2 Our responsibilities under ASSA 5000 are further described in the Auditor’s responsibilities section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Act and the ethical requirements of APES 110 Code of Ethics for Professional Accountants (including Independence Standards) issued by the Accounting Professional & Ethical Standards Board Limited (November 2018 incorporating all amendments to June 2024) (the Code) that are relevant to reviews of the selective sustainability information of public interest entities in Australia. We have also fulfilled our other ethical responsibilities in accordance with these requirements and the Code. Our firm applies Australian Standard on Quality Management ASQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information or Other Assurance or Related Services Engagements, which requires the firm to design, implement and operate a system of quality management, including policies and procedures regarding compliance with ethical requirements, professional standards, and applicable legal and regulatory requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. Other information The directors of the Company are responsible for the other information. The other information comprises the Company’s Annual Report and the Sustainability Report, but does not include the selective sustainability information and our review report thereon. Our conclusion on the selective sustainability information does not cover the other information and we do not express any form of assurance conclusion thereon in this review report . We have issued a separate auditor’s report on the Financial Report and the Remuneration Report In connection with our review of the selective sustainability information, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the selective sustainability information, or our knowledge obtained when conducting the review, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard . Responsibilities for the selective sustainability information The directors of the Company are responsible for: ▪ The preparation of the selective sustainability information in accordance with the Act; and ▪ Designing, implementing and maintaining such internal control necessary to enable the preparation of the selective sustainability information, in accordance with the Act that is free from material misstatement, whether due to fraud or error.
Page 85
82 www.LynasRareEarths.com A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2025, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information,the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2025, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information,the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. Sustainability Report A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Page 2 Our responsibilities under ASSA 5000 are further described in the Auditor’s responsibilities section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Act and the ethical requirements of APES 110 Code of Ethics for Professional Accountants (including Independence Standards) issued by the Accounting Professional & Ethical Standards Board Limited (November 2018 incorporating all amendments to June 2024) (the Code) that are relevant to reviews of the selective sustainability information of public interest entities in Australia. We have also fulfilled our other ethical responsibilities in accordance with these requirements and the Code. Our firm applies Australian Standard on Quality Management ASQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information or Other Assurance or Related Services Engagements, which requires the firm to design, implement and operate a system of quality management, including policies and procedures regarding compliance with ethical requirements, professional standards, and applicable legal and regulatory requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. Other information The directors of the Company are responsible for the other information. The other information comprises the Company’s Annual Report and the Sustainability Report, but does not include the selective sustainability information and our review report thereon. Our conclusion on the selective sustainability information does not cover the other information and we do not express any form of assurance conclusion thereon in this review report . We have issued a separate auditor’s report on the Financial Report and the Remuneration Report In connection with our review of the selective sustainability information, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the selective sustainability information, or our knowledge obtained when conducting the review, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard . Responsibilities for the selective sustainability information The directors of the Company are responsible for: ▪ The preparation of the selective sustainability information in accordance with the Act; and ▪ Designing, implementing and maintaining such internal control necessary to enable the preparation of the selective sustainability information, in accordance with the Act that is free from material misstatement, whether due to fraud or error. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Page 3 Inherent limitations As discussed on page 28 of the Report, climate-related risk management is an emerging area, and often uses data and methodologies that are developing and uncertain. The Report contains forward looking statements, including climate-related scenarios, targets, assumptions, climate projections, forecasts, statements of future intentions and estimates and judgements that have not yet occurred and may never occur. We do not provide assurance on the achievability of this prospective information. Greenhouse gas emissions quantification is subject to significant measurement uncertainty, which arises because of incomplete scientific knowledge used to determine emissions factors and the values needed to combine emissions of different gases. The comparability of sustainability information between entities and over time may be affected by inconsistencies in the methods to estimate or measure those emissions, due to different, but acceptable, methods applied. Auditor’s responsibilities Our objectives are to plan and perform the review to obtain limited assurance about whether the selective sustainability information, defined in the Conclusion section of our report, is free from material misstatement, whether due to fraud or error, and to issue a review report that includes our conclusion. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence decisions of users taken on the basis of the selective sustainability information. As part of a review in accordance with ASSA 5000, we exercise professional judgement and maintain professional scepticism throughout the engagement. We also: ▪ Perform risk assessment procedures, including obtaining an understanding of internal control relevant to the engagement, to identify and assess the risks of material misstatements, whether due to fraud or error, at the disclosure level but not for the purpose of providing a conclusion on the effectiveness of the entity’s internal control. ▪ Design and perform procedures responsive to assessed risks of material misstatement at the disclosure level. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Summary of the work performed A review is a limited assurance engagement and involves performing procedures to obtain evidence about the selective sustainability information. The nature, timing and extent of procedures selected depend on professional judgement, including the assessed risks of material misstatement at the disclosure level, whether due to fraud or error.
Page 86
83 Lynas Rare Earths Limited | 2026 Annual Report A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2025, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information,the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 9 The Esplanade Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Lynas Rare Earths Limited Report on the audit of the financial report Opinion We have audited the financial report of Lynas Rare Earths Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2025, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information,the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Page 3 Inherent limitations As discussed on page 28 of the Report, climate-related risk management is an emerging area, and often uses data and methodologies that are developing and uncertain. The Report contains forward looking statements, including climate-related scenarios, targets, assumptions, climate projections, forecasts, statements of future intentions and estimates and judgements that have not yet occurred and may never occur. We do not provide assurance on the achievability of this prospective information. Greenhouse gas emissions quantification is subject to significant measurement uncertainty, which arises because of incomplete scientific knowledge used to determine emissions factors and the values needed to combine emissions of different gases. The comparability of sustainability information between entities and over time may be affected by inconsistencies in the methods to estimate or measure those emissions, due to different, but acceptable, methods applied. Auditor’s responsibilities Our objectives are to plan and perform the review to obtain limited assurance about whether the selective sustainability information, defined in the Conclusion section of our report, is free from material misstatement, whether due to fraud or error, and to issue a review report that includes our conclusion. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence decisions of users taken on the basis of the selective sustainability information. As part of a review in accordance with ASSA 5000, we exercise professional judgement and maintain professional scepticism throughout the engagement. We also: ▪ Perform risk assessment procedures, including obtaining an understanding of internal control relevant to the engagement, to identify and assess the risks of material misstatements, whether due to fraud or error, at the disclosure level but not for the purpose of providing a conclusion on the effectiveness of the entity’s internal control. ▪ Design and perform procedures responsive to assessed risks of material misstatement at the disclosure level. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Summary of the work performed A review is a limited assurance engagement and involves performing procedures to obtain evidence about the selective sustainability information. The nature, timing and extent of procedures selected depend on professional judgement, including the assessed risks of material misstatement at the disclosure level, whether due to fraud or error. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Page 4 In conducting our review, the procedures we performed included, but were not limited to: ▪ Considered the completeness of Lynas Rare Earths Limited’s assessment of climate-related risks and opportunities ▪ Conducted interviews with key personnel to understand the process for collecting, collating and reporting the selective sustainability information during the reporting period ▪ Read minutes of relevant committees to understand matters discussed and decisions made with respect to climate-related disclosures ▪ Assessed the appropriateness of the reporting boundaries applied ▪ Undertook analytical review procedures to support the reasonableness of the selective sustainability information ▪ Evaluated the appropriateness of emission factors applied in the greenhouse gas emission processes ▪ Agreed the selective sustainability information disclosures made in the report with the underlying records ▪ Evaluated the presentation and disclosure of the selective sustainability information against the requirements of AASB S2. Ernst & Young T S Hammond Partner Perth 26 August 2026
Page 87
84 www.LynasRareEarths.com
Page 88
85Lynas Rare Earths Limited | 2026 Annual Report Financial Statements as at 30 June 2026 Notes to the Financial Statements 90 About this report 90 Basis of preparation 90 A. Earnings for the year 92 A.1. Segment revenue and expenses 92 A.2. Financial income and expenses 95 A.3. Earnings per share 96 A.4. Income taxes 97 B. Production and exploration assets 100 B.1. Property, plant and equipment and mine development 100 B.2. Right of use, leases and other commitment 105 B.3. Impairment of non-current assets 107 C. Cash, Borrowings and Capital 109 C.1. Cash and cash equivalents 109 C.2. Short-term Deposits 110 C.3. Interest Bearing Liabilities 110 C.4. Financing facilities 112 C.5. Contributed equity 113 C.6. Reserves 113 C.7. Risk 114 D. Other assets and liabilities 116 D.1. Trade and other receivables 116 D.2. Inventories 116 D.3. Other non-current assets 118 D.4. Trade and other payables 119 D.5. Provisions and Employee benefits 119 E. Other items 122 E.1. Contingent liabilities 122 E.2. Other commitments 122 E.3. Auditor remuneration 123 E.4. Subsidiaries 123 E.5. Parent entity Information 124 E.6. Entities under a Deed of Cross Guarantee 124 E.7. Employee costs and share based payments 126 E.8. Other items 131 E.9. Subsequent events 131 Consolidated entity disclosure statement 131 Consolidated Statement of Profit or Loss and Other Comprehensive Income 86 Consolidated Statement of Financial Position 87 Financial Statements 88 Consolidated Statement of Changes in Equity 88
Page 89
86 www.LynasRareEarths.com For the year ended 30 June In A$’000 Note 2026 2025 Revenue A.1 977,945 556,512 Cost of sales A.1 (585,493) (426,696) Gross profit 392,452 129,816 General and administration expenses A.1 (140,068) (106,597) Net foreign exchange loss (3,414) (15,001) Other expenses (1,613) (2,027) Profit from operating activities 247,357 6,191 Financial income A.2 38,512 17,378 Financial expenses A.2 (29,813) (13,830) Net financial income 8,699 3,548 Profit before income tax 256,056 9,739 Income tax (expense) A.4 (33,704) (1,749) Profit for the year 222,352 7,990 Other comprehensive income / (loss) for the year net of income tax that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations (13,230) 94,733 Total other comprehensive (loss) / income for the year, net of income tax (13,230) 94,733 Total comprehensive income for the year attributable to equity holders of the Company 209,122 102,723 Note cents per share cents per share Earnings per share Basic earnings per share (cents per share) A.3 22.15 0.85 Diluted earnings per share (cents per share) A.3 22.06 0.85 Consolidated Statement of Profit or Loss and Other Comprehensive Income The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the notes to the financial statements. Financial Statements
Page 90
87 Lynas Rare Earths Limited | 2026 Annual Report as at 30 June Consolidated Statement of Financial Position The Consolidated Statement of Financial Position should be read in conjunction with the notes to the financial statements. In A$’000 Note 2026 2025 Assets Cash and cash equivalents C.1 504,128 166,490 Short Term Deposits C.2 704,971 – Trade and other receivables D.1 148,212 49,002 Tax receivable 33,492 24,137 Prepayments 5,499 14,161 Inventories D.2 227,593 176,121 Total current assets 1,623,895 429,911 Inventories D.2 13,216 12,021 Property, plant and equipment B.1 2,269,788 2,235,291 Right of use B.2 210,484 46,401 Deferred development expenditure B.1 129,349 115,287 Intangible assets 1,659 1,808 Deferred tax assets A.4 – 6,457 Other non-current assets D.3 79,996 97,042 Total non-current assets 2,704,492 2,514,307 Total assets 4,328,387 2,944,218 Liabilities Trade and other payables D.4 107,402 83,521 Borrowings C.3 27,681 29,166 Employee benefits D.5 8,780 7,176 Provisions D.5 24,897 27,355 Lease liabilities B.2 4,978 4,623 Total current liabilities 173,738 151,841 Borrowings C.3 92,000 122,092 Deferred tax liabilities A.4 43,234 Employee benefits D.5 1,439 850 Provisions D.5 313,908 270,565 Lease liabilities B.2 213,677 46,165 Total non-current liabilities 664,258 439,672 Total liabilities 837,996 591,513 Net assets 3,490,391 2,352,705 Share capital C.5 3,005,375 2,091,089 Retained earnings 450,752 228,400 Reserves C.6 34,264 33,216 Total equity attributable to the equity holders of the Company 3,490,391 2,352,705
Page 91
88 www.LynasRareEarths.com For the year ended 30 June Consolidated Statement of Changes in Equity The Consolidated Statement of Changes in Equity should be read in conjunction with the notes to the financial statements. In A$’000 Ref Share capital Retained earnings Foreign currency translation reserve Equity settled employee benefits reserve Warrant reserve Total Balance at 1 July 2025 2,091,089 228,400 (68,693) 80,144 21,765 2,352,705 Other comprehensive loss for the year – – (13,230) – – (13,230) Total profit for the year – 222,352 – – – 222,352 Total comprehensive profit for the year – 222,352 (13,230) – – 209,122 Issue of shares, net of issues costs C.5 914,286 – – – – 914,286 Employee remuneration settled through share-based payments E.7 – – – 14,278 – 14,278 Balance at 30 June 2026 3,005,375 450,752 (81,923) 94,422 21,765 3,490,391 Balance at 1 July 2024 2,091,089 220,410 (163,426) 72,967 21,765 2,242,805 Other comprehensive gain for the year – – 94,733 – – 94,733 Total profit for the year – 7,990 – – – 7,990 Total comprehensive profit for the year – 7,990 94,733 – – 102,723 Employee remuneration settled through share-based payments E.7 – – – 7,177 – 7,177 Balance at 30 June 2025 2,091,089 228,400 (68,693) 80,144 21,765 2,352,705 Financial Statements
Page 92
89Lynas Rare Earths Limited | 2026 Annual Report For the year ended 30 June Consolidated Statement of Cash Flows The Consolidated Statement of Cash Flows should be read in conjunction with the notes to the financial statements. In A$’000 Note 2026 2025 Cash flows from operating activities Receipts from customers 887,355 550,739 Payments to suppliers and employees (547,867) (389,636) Royalties paid (8,774) (6,124) Payments for discharge of rehabilitation obligation D.5 (19,555) (30,314) Income taxes refunded / (paid) 7,651 (20,498) Net cash from operating activities C.1 318,810 104,167 Cash flows from investing activities Payments for property, plant and equipment and development expenditure (178,268) (430,823) Grants received in relation to property, plant and equipment 6,925 5,500 Security bonds paid (18) (142) Security bonds refunded 34 34 Interest received 32,226 19,241 Deposits made (707,559) – Net cash used in investing activities (846,660) (406,190) Cash flows from financing activities Interest and other financing costs paid (4,831) (6,341) Proceeds from the issue of share capital 932,573 – Payment of share issue transaction costs (18,287) – Repayment of lease liabilities (20,561) (7,569) Repayment of borrowings (29,463) (31,390) Net cash provided used in financing activities 859,431 (45,300) Net increase / (decrease) in cash and cash equivalents 331,581 (347,323) Cash and cash equivalents at the beginning of the year 166,490 523,838 Effect of exchange rate fluctuations (net) on cash held 6,057 (10,025) Closing cash and cash equivalents C.1 504,128 166,490
Page 93
90 www.LynasRareEarths.com Notes to the Financial Statements Financial Statements For the year ended 30 June 2026 ABOUT THIS REPORT Lynas Rare Earths Limited (the “Company”) is a for-profit company domiciled and incorporated in Australia. The financial report of Lynas Rare Earths Limited as at and for the year ended 30 June 2026 comprises the Company and its subsidiaries (together referred to as the “Group”). The financial report was approved by the Board of Directors (the “Directors”) on 26 August 2026. The Group is principally engaged in the extraction and processing of rare earth minerals, primarily in Australia and Malaysia. The address of the registered office of the Company is Level 4, 1 Howard St, Perth, Western Australia. BASIS OF PREPARATION Statement of compliance The financial report is a general-purpose financial report and has been prepared in accordance with Australian Accounting Standards (“AASs”) issued by the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001. The financial report also complies with International Financial Reporting Standards and Interpretations (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Going concern The financial report has been prepared using the going concern assumption. Basis of measurement The financial report has been prepared under the historical cost convention, except for the borrowings which are at amortised cost. Information as disclosed in the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the current year is for the 12 month period ended 30 June 2026. Information for the comparative year is for the 12 month period ended 30 June 2025. Consolidation of subsidiaries Subsidiaries are entities controlled by the Company or the Group. Control is achieved when the Company or Group has power over the investee, is exposed, or has the rights to variable returns from its involvement with the investee; and has the ability to use its power to affect its returns. In assessing control, potential voting rights that are presently exercisable are taken into account. The financial statements of subsidiaries are included in the financial report from the date control (or effective control) commences until the date that control ceases. As per Note E.4 all entities within the Group are 100% owned and controlled. Intra-group balances and unrealised items of income and expense arising from intra-group transactions are elim- inated in preparing the financial report. Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same manner as gains, but only to the extent that there is no evidence of impairment.
Page 94
91Lynas Rare Earths Limited | 2026 Annual Report Rounding of amounts The Company is of a kind referred to in Corporations Instrument 2026/183 issued by the Australian Securities and Investments Commission, in relation to the “rounding off” of amounts. Amounts in the Directors’ Report and Financial Report have been rounded off, in accordance with the Instrument, to the nearest thousand dollars, unless otherwise stated. Currency and foreign exchange The financial report of the Company and the Group is presented in Australian Dollars (“AUD”), which is both the Company’s and the Group’s presentation currency. Items included in the financial report of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). Foreign currency transactions Foreign currency transactions are translated into the functional currency using the exchange rates prevailing on the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency of the respective entities at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at historical cost are translated to the functional currency of the respective entities at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency of the respective entities at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on translation are recognised in the statement of comprehensive income as a component of the profit or loss. Foreign operations The results and financial position of those entities that have a functional currency different from the presentation currency of the Group are translated into the Group’s presentation currency as follows: • assets and liabilities for each statement of financial position presented are translated at the closing rate at the reporting date of the statement of financial position; • income and expense items for each profit or loss item are translated at average exchange rates; • items of other comprehensive income are translated at average exchange rates; and • all resulting exchange differences are recognised as a separate component of equity. As at 30 June 2026, the entities that have a different functional currency to the Group’s presentation currency (AUD) are Lynas Africa Limited (USD functional currency), Lynas USA LLC (USD functional currency), Lynas France SAS (Euro) and Lynas Malaysia Sdn Bhd (MYR functional currency). Foreign exchange risk management As a result of the Group’s international operations, foreign exchange risk exposures exist on purchases, assets and borrowings that are denominated in foreign currencies (i.e. currencies other than the functional currency of each of the Group’s operating entities). The currencies in which these transactions are primarily denominated are the AUD, USD and MYR. The Group takes advantage of natural offsets to the extent possible. Therefore, when commercially feasible, the Group borrows in the same currencies in which cash flows from operations are generated. Generally the Group does not use forward exchange contracts to hedge residual foreign exchange risk arising from receipts and payments denominated in foreign currencies. However, when considered appropriate the Group may enter into forward exchange contracts to hedge foreign exchange risk arising from specific transactions. The Group’s primary exposure to foreign exchange risk is on the translation of net assets of Group entities which are denominated in currencies other than AUD, which is the Group’s presentation currency. The impact of movements in exchange rates is recognised primarily in the other comprehensive income component of the Group’s statement of comprehensive income. Certain subsidiaries within the Group are exposed to foreign exchange risk on purchases denominated in curren- cies that are not the functional currency of that subsidiary. In these circumstances, a change in exchange rates would impact the net operating profit recognised in the profit or loss component of the Group’s statement of comprehensive income. Details of this exposure is detailed in the capital risks in Section C of this report.
Page 95
92 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued A. EARNINGS FOR THE YEAR This section includes the results and performance of the Group. It includes segmental information and details about the Group’s tax position. A.1. Segment revenue and expenses AASB 8 Operating Segments (“AASB 8”) requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Makers (CODM) in order to allocate resources to the segment and to assess its performance. At year end, the Group’s CODM are the Board of Directors of the Company, the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the VP Major Projects, the General Counsel & Company Secretary, the VP Malaysia, the VP People & Culture and the VP Strategy and Investor Relations. Information reported to the Group’s CODM for the purposes of resource allocation and assessment of performance currently focuses on the operation of the Group’s integrated rare earth extraction and process facilities. The Group has only one reportable segment under AASB 8 being its rare earth operations. The CODM does not review the business activities of the Group based on geography. All of the Group’s revenue is derived through the sale of rare earth products and is sold to non-Australian customers. The accounting policies applied by this segment are the same as the Group’s accounting policies. Results from operating activities represent the profit earned by this segment without allocation of interest income and expense and income tax benefit (expense). The CODM assess the performance of the operating segment based on adjusted EBITDA. Adjusted EBITDA is defined as net profit before income tax expense, net of financial expenses, deprecia- tion and amortisation and adjusted to exclude certain significant items, including but not limited to such items as employee remuneration settled through share-based payments, restructuring costs, unrealised gains or losses on derivatives, gains or losses on the sale of non-strategic assets, asset impairments and write downs. 15% (FY25: 16%) of the Group’s non-current assets are located in Malaysia and the remaining 85% (FY25: 84%) are in Australia.
Page 96
93 Lynas Rare Earths Limited | 2026 Annual Report Recognition and measurement Revenue from contracts with customers Rare earth product sales: The Group derives revenue from the sale of rare earth products, which are governed by a sales contract with their customers. Revenue is recognised in relation to rare earth sales at the time control transfers to customers at the date of loading/shipment. Sales made under CIF incoterms, where the Group is responsible for freight and shipping, are generally recognised at the point in time when the rare earth products are loaded onto the vessel for shipment. In these sales, the freight and shipping service represents a separate performance obligation to the sale of the rare earth products. For those sales not made under CIF incoterms, this timing is upon the delivery of the rare earth products. Provisionally priced sales: Certain of the Group’s sales are provisionally priced, where the final price depends on the sale price of products sold to a third party outside of the Lynas transaction. Adjustments to the sales price occur based on movements in market prices up to the secondary point of sale. Under AASB 15 any fair value adjustments on receivables subject to Quotational Pricing (QP) are recognised in other revenue and not included in revenue from contracts with customers. Shipping services: As noted above, a portion of the Group’s rare earth product sales are sold on CIF incoterms, whereby the Group is responsible for providing freight and shipping services after the date that it transfers control of the rare earth products to the customer. Under AASB 15, it has been concluded that freight and shipping represent a separate performance obligation and that the Group acts as principal. As a result, a portion of the transaction price is required to be allocated to this performance obligation and will be recognised over time on a gross basis as the services are provided. The Group has concluded that for the FY26 period the amount is insignificant and therefore not disclosed separately in Note A.1. Royalties Obligations arising from royalty arrangements are recognised as current liabilities and included as part of the cost of goods sold in the statement of comprehensive income as a component of profit or loss. Lynas currently pays royalties to the Western Australian Department of Minerals and Petroleum for the export of rare earth concentrate to Malaysia. Financial income and expenses Financial income comprises interest income and gains on derivative financial instruments in respect of investing activities that are recognised in the statement of comprehensive income as a component of the profit or loss. Interest income is recognised as it accrues using the effective interest method. Financial expenses comprise interest expense, impairment losses recognised on financial assets (except for trade receivables) and losses in respect of financing activities on derivative instruments that are recognised in the statement of comprehensive income as a component of the profit or loss. All borrowing costs not qualifying for capitalisation are recognised in the statement of comprehensive income as a component of the profit or loss using the effective interest method.
Page 97
94 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued A.1 Segment revenue and expenses continued For the year ended 30 June 2026 For the year ended 30 June 2025 In A$’000 Rare Earth Operations Corporate/ Unallocated Total Continuing Operations Rare Earth Operations Corporate/ Unallocated Total Continuing Operations Business segment reporting Revenue from contracts with customers 934,490 – 934,490 542,665 – 542,665 Other revenue: Revenue adjustments 43,455 43,455 13,847 13,847 Total revenue 977,945 – 977,945 556,512 – 556,512 Cost of sales (excl depreciation) (487,181) (487,181) (363,458) (363,458) Cost of sales (depreciation) (98,312) – (98,312) (63,238) – (63,238) Gross profit 392,452 – 392,452 129,816 – 129,816 Employee and production costs net of costs recovered through production(1) (30,701) (17,134) (47,835) (21,149) (12,027) (33,176) Depreciation expenses net of cost recovered through production(1) (37,128) (3,241) (40,369) (29,904) (1,853) (31,757) Other general and administration expenses(2) (27,750) (24,114) (51,864) (31,297) (10,367) (41,664) Total general and admin expenses (95,579) (44,489) (140,068) (82,350) (24,247) (106,597) Other income / (expenses) – (1,613) (1,613) – (2,027) (2,027) Net foreign exchange gain / (loss) – (3,414) (3,414) – (15,001) (15,001) Profit/(loss) before interest and tax (“EBIT”) 296,873 (49,516) 247,357 47,466 (41,275) 6,191 Other financial income 38,512 17,378 Financial expenses (29,813) (13,830) Profit before income tax 256,056 9,739 Income tax expense (33,704) (1,749) Profit for the year 222,352 7,990 EBIT(3) 296,873 (49,516) 247,357 47,466 (41,275) 6,191 Depreciation and amortisation 135,440 3,241 138,681 93,142 1,853 94,995 EBITDA(3) 432,313 (46,275) 386,038 140,608 (39,422) 101,186 Included in EBITDA: Non-cash employee remuneration settled through share based payments comprising: Share based payments expense for the year 14,278 – 14,278 7,177 – 7,177 Other expenses – 1,613 1,613 – 2,027 2,027 Adjusted EBITDA(3) 446,591 (44,662) 401,929 147,785 (37,395) 110,390 Total assets 2,841,161 1,487,226 4,328,387 1,501,389 1,451,291 2,952,680 Total liabilities (656,765) (181,231) (837,996) (422,504) (169,009) (591,513) (1) The allocation of fixed overheads is based on the normal capacity of the facilities, however overheads may not be fully allocated to production as a result of low output or idle capacity. In these cases, the unallocated overheads have been expensed directly into general and administrative costs. (2) Other general and administration expenses include statutory, consulting, insurance, IT, marketing and general office costs. (3) EBIT, EBITDA and Adjusted EBITDA are non IFRS measures.
Page 98
95 Lynas Rare Earths Limited | 2026 Annual Report A.2. Financial income and expenses For the year ended 30 June In A$’000 2026 2025 Interest income on cash and cash equivalents and short term deposits 38,512 17,378 Total financial income 38,512 17,378 Interest expense on financial liabilities: Interest expense on JARE loan facility (4,317) (5,474) Unwinding of effective interest on JARE loan facility (5,270) (6,364) Interest capitalised to qualifying assets 6,569 11,838 Unwinding of discount on restoration and rehabilitation provision (11,177) (11,208) Interest expense on lease liabilities (15,018) (2,260) Discount unwinding on AELB deposit 380 372 Financing transaction costs and fees (980) (734) Total financial expenses (29,813) (13,830) Net financial income 8,699 3,548
Page 99
96 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued A.3. Earnings per share Recognition and measurement Basic earnings per share amounts are calculated by dividing net loss or profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share adjusts the amount used in the determination of the basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordi- nary shares and the weighted average number of additional shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. Potential ordinary shares are treated as dilutive when, and only when, their conversion to ordinary shares would decrease earnings per share from continuing operations. The earnings and weighted average number of ordinary shares used in the calculations of basic and diluted earnings per share are as follows: As at 30 June In A$’000 2026 2025 Net earnings attributed to ordinary shareholders 222,352 7,990 Earnings used in calculating basic earnings per share 222,352 7,990 Net earnings impact of assumed conversions of diluted EPS – – Earnings used in calculating diluted earnings per share 222,352 7,990 Number of ordinary shares on issue (‘000) 1,006,503 935,447 Weighted average number of ordinary shares used in calculating basic earnings per share (‘000) 1,003,742 935,080 Weighted average number of ordinary shares used in calculating diluted earnings per share (‘000) 1,007,788 939,648 cents per share cents per share Basic earnings per share (cents per share) 22.15 0.85 Diluted earnings per share (cents per share) 22.06 0.85 The following dilutive instruments are included in the share base for the calculation of dilutive earnings per share: As at 30 June Number (000’s) 2026 2025 Performance rights 4,046 4,569 Total 4,046 4,569
Page 100
97 Lynas Rare Earths Limited | 2026 Annual Report A.4. Income taxes A.4.1. Income tax expense For the year ended 30 June In A$’000 2026 2025 Current tax Current tax (benefit) / expense in respect of the current year (14,911) 2,316 Adjustments recognised in the current year in relation to the current tax in prior years (1,076) – (15,987) 2,316 Deferred tax Deferred tax expense / (benefit) recognised in the year 49,691 (567) Total income tax expense relating to the continuing operations 33,704 1,749 A.4.2. Reconciliation of income tax to tax expense For the year ended 30 June In A$’000 2026 2025 Profit before tax for continuing operations 256,056 9,739 Income tax expense calculated at Statutory Rate (Australia 30%, Malaysia 24%) (2025:Australia 30%) 67,750 2,922 Add / (deduct): Effect of expenses that are not deductible and income that is not assessable in determining taxable profit 13,693 9,640 Effect of difference in tax rate in subsidiaries and branches 87 (424) Adjustments recognised in the current year in relation to the current tax in prior years (1,076) – Effect of current year losses not recognised 349 – Effect of tax exemption due to pioneer status in Malaysia (24,858) (10,526) Effect of prior period losses previously unrecognised, now recognised (21,781) – Deferred tax on origination / reversal of temporary differences (472) – Other adjustments 12 137 Total current year income tax expense 33,704 1,749
Page 101
98 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued A.4 Income taxes continued A.4.3. Movements in deferred tax balances In A$’000 Balance at 1 July 2025 Recognised in profit or loss Relating to equity Recognised in OCI Over/Under prior year Balance at 30 June 2026 Temporary differences Inventory (4,247) (5,506) – – 103 (9,650) Development expenditure (49,137) (4,153) – – – (53,290) Property plant and equipment (11,804) (13,348) – – (38,310) (63,462) Borrowings 17,492 (3,832) – – 112 13,772 Trade payables 901 8,708 – – 1 9,610 Lease liabilities 4,220 2,115 – – (2,911) 3,424 Provisions 23,574 3,195 – – – 26,769 Trademarks – CGT Asset 11 – – – – 11 Other (538) 28 – – 1,376 866 Foreign Exchange 837 (13,347) – – (837) (13,347) Tax Losses 25,119 (6,627) – – 23,572 42,064 Prepayments 30 (30) – – – – Net deferred tax asset / (liabilities) recognised 6,457 (32,797) – – (16,894) (43,234) In A$’000 Balance at 1 July 2024 Recognised in profit or loss Relating to equity Recognised in OCI Over/Under prior year Balance at 30 June 2025 Temporary differences Inventory (1,055) (3,192) – – – (4,247) Development expenditure (40,433) (9,086) – – 382 (49,137) Property plant and equipment (1,340) (10,051) – – (413) (11,804) Borrowings 17,775 – – – (283) 17,492 Trade payables 611 836 – – – 1,447 Business related costs 687 (687) – – (547) (547) Lease liabilities 3,640 580 – – – 4,220 Provisions 25,241 (2,317) – – 650 23,574 Trademarks – CGT Asset – – – – 11 11 Other – (504) – – (34) (538) Foreign Exchange 763 – – – 74 837 Tax Losses – 25,149 – – (30) 25,119 Prepayments – 30 – – – 30 Net deferred tax asset recognised 5,889 758 – – (190) 6,457 A.4.4. Unrecognised deferred tax assets As at 30 June In A$’000 2026 2025 Deductible temporary differences and unused tax losses for which no deferred tax assets have been recognised are attributable to the following: Gross revenue losses Australia 5,851 5,851 Malaysia – 75,553 United States 3,911 3,545 Malawi 234 44
Page 102
99 Lynas Rare Earths Limited | 2026 Annual Report Recognition and measurement Income tax expense comprises current and deferred tax. Income tax expense is recognised in the statement of comprehensive income as a component of the profit or loss except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised with the associated items on a net basis. Current tax is the expected tax payable on the taxable income for the year using tax rates enacted or substan- tially enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method of providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the carrying amounts for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will not reverse in the foreseeable future and the Group is in a position to control the timing of the reversal of the temporary differences. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantially enacted at the reporting date. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Additional income taxes that arise from the distribution of dividends are recognised at the same time the liability to pay the related dividend is recognised. Deferred income tax assets and liabilities in the same jurisdiction are offset in the statement of financial position only to the extent that there is a legally enforceable right to offset current tax assets and current tax liabilities and the deferred balances relate to taxes levied by the same taxing authority and are expected either to be settled on a net basis or realised simultaneously. Tax consolidation The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group with effect from 1 July 2002 and are therefore taxed as a single entity from that date. The head entity within the tax-consol- idated group is Lynas Rare Earths Limited. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and relevant tax credits of the members of the tax-consolidated group are recognised by the Company (as head entity in the tax-consolidated group). Entities within the tax-consolidated group have entered into a tax sharing agreement with the Company. The tax sharing agreement entered into between members of the tax-consolidated group provides for the determination of the allocation of income tax liabilities between the entities should the Company default on its tax payment obligations or if an entity should leave the tax-consolidated group. The effect of the tax sharing agreement is that each member’s liability for tax payable by the tax-consolidated group is limited to the amount payable to the head entity under the tax funding arrangement. KEY ESTIMATES AND JUDGEMENTS Recognition of deferred tax assets Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies. In making the assessment, the Group has given specific due consideration to forecast taxable profits arising in each jurisdiction that Lynas operates. Following the conclusion of the current terms of the pioneer period status (tax holiday) in February 2026, Lynas Malaysia has become a taxpayer for all activities in Malaysia. Lynas Malaysia has recognised previously unbooked tax losses as a result of this change in status. As a result, the recognised deferred asset relates to temporary differences and tax losses generated within the Australian tax group and within Malaysia.
Page 103
100 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued B. PRODUCTION AND EXPLORATION ASSETS This section includes information about the recognition, measurement, depreciation, amortisation and impairment considerations of the core producing and exploration assets of the Group. B.1. Property, plant and equipment and mine development Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses (if any). Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of property, plant and equipment acquired in a business combination is determined by reference to its fair value at the date of acquisition. The cost of self-constructed assets includes the cost of materials and direct labour and any other costs directly attributable to bringing the asset to a working condition for its intended use. Cost may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Purchased software that is integral to the functionality of the related equipment is capitalised as part of the cost of that equipment. Assets under construction Assets under construction are transferred to the appropriate asset category when they are ready for their intended use. Borrowing cost Borrowing costs directly attributable to the acquisition or construction of an item of property, plant and equipment are capitalised until such time as the assets are substantially ready for their intended use. The interest rate used equates to the weighted effective interest on debt where general borrowings are used or the relevant interest rate where specific borrowings are used to finance the construction. During FY26, a capitalisation rate of 6.7% was applied. (FY25: 6.7%). Subsequent costs The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within that part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in the statement of comprehensive income as a compo- nent of the profit or loss as incurred. Government grants Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is netted off against the capitalised cost of the related asset. Depreciation Depreciation is recognised in the statement of comprehensive income as a component of the profit or loss or capi- talised as a component of inventory in the statement of financial position (which is subsequently released to the profit or loss through the cost of goods sold on the sale of the underlying product) using a method that reflects the pattern in which the economic benefits embodied within the asset are consumed. Generally, this is on a straight- line basis over the estimated useful life of each part or component of an item of property, plant and equipment.
Page 104
101 Lynas Rare Earths Limited | 2026 Annual Report The estimated useful lives for the material classes of property, plant and equipment are as follows: Leasehold land 30 to 99 years Buildings 5 to 30 years Plant and equipment 2 to 30 years Fixtures and fittings 2 to 15 years Leasehold improvements 3 to 30 years Motor vehicles 8 years Rehabilitation assets 20 to 30 years Depreciation methods, useful lives and residual values are reassessed on an annual basis. Gains and losses on the disposal of items of property, plant and equipment are determined by comparing the proceeds (if any) at the time of disposal with the net carrying amount of the asset. Development expenditure Once an area of interest has been established as commercially viable and technically feasible, expenditure other than that relating to land, buildings and plant and equipment is capitalised as development expenditure. Development expenditure includes previously capitalised exploration and evaluation expenditure, pre-production development expenditure and other subsurface expenditure pertaining to that area of interest. Costs related to surface plant and equipment and any associated land and buildings are accounted for as property, plant and equipment. Development costs are accumulated in respect of each separate area of interest. Costs associated with commis- sioning new assets in the period before they are capable of operating in the manner intended by management, are capitalised. Development costs incurred after the commencement of production are capitalised to the extent they are expected to give rise to a future economic benefit. When an area of interest is abandoned or the Directors decide that it is not commercially viable or technically feasible, any accumulated costs in respect of that area are written off in full in the statement of comprehensive income as a component of the profit or loss in the period in which the decision to abandon the area is made to the extent that they will not be recoverable in the future. Development assets are assessed for impairment if the facts and circumstance suggest that the carrying amount exceed the recoverable amount. For the purpose of impairment testing, development assets are allocated to the cash-generating units (“CGUs”) to which the development activity relates. Deferred stripping Overburden and other mine waste materials are often removed during the initial development of a mine in order to access the mineral deposit. This activity is referred to as development or pre-production stripping. The directly attributable costs associated with these activities are capitalised as a component of development costs. Capitalisation of development stripping ceases and amortisation of those capitalised costs commences upon extraction of ore. Amortisation of capitalised development stripping costs occurs on a unit of production basis with reference to the life of mine of the relevant area of interest. Removal of waste material normally continues through the life of a mine. This activity is referred to as production stripping and commences upon the extraction of ore. Amortisation of development Amortisation of development is recognised either in the statement of comprehensive income as a component of the profit or loss or capitalised as a component of inventory in the statement of financial position (which is subsequently released to the profit or loss through the cost of goods sold on the sale of the underlying product) on a units of production basis which aims to recognise cost proportionally to the depletion of the economically recoverable mineral resources. Costs are amortised from the commencement of commercial production.
Page 105
102 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued B.1 Property, plant and equipment and mine development continued KEY ESTIMATES AND JUDGEMENTS Development Expenditure Development activities commence after project sanctioning by the appropriate level of management and the Board. Judgement is applied by management in determining when a project is economically viable. In exercising this judgement, management is required to make certain estimates and assumptions as described above for capi- talised development expenditure. Any such estimates and assumptions may change as new information becomes available. If, after having commenced the development activity, a judgement is made that a development asset is impaired, the appropriate amount will be written off to the statement of comprehensive income. Stripping Asset As with many mining operations similar to Mt Weld, overburden and other mine waste materials are often removed during the initial development of a mine in order to access the mineral deposit. The extraction of the ore body itself will also include a waste component extracted during the mining campaign. The costs of extraction of both these elements form the stripping costs. Judgement is required to identify a suitable allocation basis to apportion the stripping costs between inventory and any stripping assets for each component. The Group considers that the ratio of the expected volume of waste to be stripped for an expected volume of ore to be mined for a specific component of the ore body, to be the most suitable production measure. An identifiable component is a specific volume of the ore body that is made more accessible by the stripping activity. Pre-Production Stripping The Group has determined that the overburden removal where no ore is recovered forms part of a pre- production stripping asset and has been determined to provide more accessibility to the total ore body and is amortised over the ore body which is benefited. Production Stripping ratio The Group has adopted a policy of deferring production stage stripping costs and amortising them on a units-of-production basis for each individual mining campaign. Judgement is required in determining the contained ore units for each mining campaign. Estimation of mineral reserves – refer to Note B.3
Page 106
103 Lynas Rare Earths Limited | 2026 Annual Report Property, Plant and Equipment Development Expenditure In A$’000 Leasehold land Buildings plant and equipment Fixtures and fittings Assets under construction Rehabilitation asset Leasehold improvements Total Development expenditure Pre-production / Stripping asset Total As at 30 June 2026 Cost 31,209 2,427,702 17,178 202,173 442,903 130,188 3,251,353 55,355 110,453 165,808 Accumulated impairment losses – (204,951) (419) (258) – (7,994) (213,622) (4,321) – (4,321) Accumulated depreciation (5,692) (657,452) (11,351) – (76,225) (17,223) (767,943) (8,522) (23,616) (32,138) Carrying amount 25,517 1,565,299 5,408 201,915 366,678 104,971 2,269,788 42,512 86,837 129,349 Opening cost 31,659 2,110,797 17,092 475,728 399,004 23,847 3,058,127 54,658 89,327 143,985 Opening accumulated impairment and depreciation (5,454) (726,868) (9,803) (272) (61,376) (19,063) (822,836) (12,624) (16,074) (28,698) Opening carrying amount 26,205 1,383,929 7,289 475,456 337,628 4,784 2,235,291 42,034 73,253 115,287 Additions – 4,399 – 121,704 47,707 15 173,825 908 20,116 21,024 Disposals – (41) – (2) – – (43) – – – Depreciation expense (319) (104,628) (2,040) – (15,814) (6,397) (129,198) – – – Amortisation expense – – – – – – – (430) (6,532) (6,962) Impairment loss – (1,751) – – – – (1,751) – – – Government grants received – – – (6,925) – – (6,925) – – – Capitalised interest – – – 6,569 – – 6,569 – – – Transfers within PPE – 285,779 172 (392,600) – 106,649 – – – – Foreign currency translation (369) (2,388) (13) (2,287) (2,843) (80) (7,980) – – – Carrying amount at 30 June 2026 25,517 1,565,299 5,408 201,915 366,678 104,971 2,269,788 42,512 86,837 129,349 Restrictions on the title of property plant and equipment and development assets are outlined in Note C.3.
Page 107
104 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued B.1 Property, plant and equipment and mine development continued Property, Plant and Equipment Development Expenditure In A$’000 Leasehold land Buildings plant and equipment Fixtures and fittings Assets under construction Rehabilitation asset Leasehold improvements Total Development expenditure Pre-production / Stripping asset Total As at 30 June 2025 Cost 31,659 2,110,797 17,092 475,728 399,004 23,847 3,058,127 54,658 89,327 143,985 Accumulated impairment losses – (206,175) (426) (272) – (8,109) (214,982) (4,505) – (4,505) Accumulated depreciation (5,454) (520,693) (9,377) – (61,376) (10,954) (607,854) (8,119) (16,074) (24,193) Carrying amount 26,205 1,383,929 7,289 475,456 337,628 4,784 2,235,291 42,034 73,253 115,287 Opening cost 27,774 924,577 9,760 1,288,162 348,371 21,062 2,619,706 50,560 49,987 100,547 Opening accumulated impairment and depreciation (4,504) (640,704) (7,941) (266) (41,822) (14,052) (709,289) (12,221) (14,342) (26,563) Opening carrying amount 23,270 283,873 1,819 1,287,896 306,549 7,010 1,910,417 38,339 35,645 73,984 Additions – 1,070 56 298,357 23,663 – 323,146 4,156 40,967 45,123 Disposals – (652) – – – – (652) – – – Depreciation expense (313) (61,125) (1,323) – (14,388) (3,065) (80,214) – – – Amortisation expense – – – – – – – (315) (3,359) (3,674) Impairment loss – (727) – – – – (727) (146) – (146) Change in rehabilitation obligations – – – – 11,629 – 11,629 – – – Capitalised interest – – – 11,838 – – 11,838 – – – Transfers within PPE – 1,126,708 6,709 (1,133,417) – – – – – – Transfers out of PPE – – – (1,022) – – (1,022) – – – Foreign currency translation 3,248 34,782 28 11,804 10,175 839 60,876 – – – Carrying amount at 30 June 2025 26,205 1,383,929 7,289 475,456 337,628 4,784 2,235,291 42,034 73,253 115,287
Page 108
105 Lynas Rare Earths Limited | 2026 Annual Report B.2. Right of use, leases and other commitment AASB 16 Leases The accounting policies of the Group upon adoption of AASB 16 are as follows: Right of Use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commence- ment date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term (where the entity does not have a purchase option at the end of the lease term). Right-of-use assets are subject to impairment. Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-sub- stance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as an expense in the period on which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset. Determining the lease term of contracts with renewal options The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Group applies judgement in evaluating whether it is reasonably certain to exercise the option to renew. That is, it considers all relevant factors that create an economic incentive for it to exercise the renewal. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise (or not to exercise) the option to renew (e.g. a change in business strategy). Short term leases and low-value assets The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equip- ment (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption (i.e. below US$5,000/ A$7,150). Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term. No leases meeting the low-value criteria were recognised at 30 June 2025 or 30 June 2026. During the year ended 30 June 2025, the Group entered into an agreement with Zenith Energy Pty Ltd for the supply of power from a gas fired hybrid renewable power station to Lynas’ Mt Weld mine and concentration plant, near Laverton, Western Australia. Various aspects of the contract have been accounted for in accordance with AASB16 Leases. Under the contract, different right of use assets will be identified as they are constructed and become commercially operational. As at 30 June 2025, only the Diesel and Gas asset meets the criteria for recogni- tion under AASB16. During the year ended 30 June 2026, the remaining Solar and Wind assets became available for use, and therefore these assets have now been recognised as a Right-of-Use asset. There are no further lease commitments under the contract that have not been recognised as a Right of Use Asset.
Page 109
106 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued Set out below are the carrying amounts of right of use recognised and the movements during the period: As at 30 June In A$’000 2026 Right of Use Assets 2025 Right of Use Assets At 1 July 46,401 9,762 Additions 154,850 42,965 Changes to inflation rate assumptions 21,951 – Depreciation expense (12,770) (7,444) Other lease modifications 56 (147) Foreign currency translation (4) 1,265 Closing as at 30 June 2026 210,484 46,401 In A$’000 Lease liabilities Lease liabilities At 1 July 50,788 12,140 Additions 151,484 42,965 Changes to inflation rate assumptions 21,951 – Payments (20,561) (7,569) Accretion of interest 15,018 2,260 Other (25) 992 Closing as at 30 June 2026 218,655 50,788 Current (4,978) (4,623) Non-current (213,677) (46,165) Total Lease Liabilities (218,655) (50,788) Lease capital commitments As at 30 June In A$’000 2026 2025 Less than one year – 8,656 Between one and five years – 20,728 More than five years – 52,341 Total – 81,725 All former lease commitments have now been recognised in the lease liability. B.2. Right of use, leases and other commitment continued
Page 110
107 Lynas Rare Earths Limited | 2026 Annual Report B.3. Impairment of non-current assets The carrying amounts of the Group’s non-financial assets are reviewed at least annually to determine whether there is any indication of impairment. If any such indicators exist then the asset or CGU’s recoverable amount is estimated. For intangible assets that have indefinite lives or that are not yet available for use, recoverable amounts are estimated at least annually and whenever there is an indication that they may be impaired. An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its recoverable amount. A CGU is the smallest identifiable asset group that generates cash flows that are largely independent from other assets and groups. Impairment losses are recognised in the statement of comprehensive income as a component of the profit or loss. Impairment losses recognised in respect of a CGU are allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then to reduce the carrying amount of the other non-financial assets in the CGU on a pro-rata basis. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. In assessing the fair value less cost to sell, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include a discounted future cash flows analysis and adjusted EBITDA (forecasted) multiplied by a relevant market indexed multiple. In respect of assets other than goodwill, impairment losses recognised in prior years are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s revised carrying amount will not exceed the carrying amount that would have been determined net of depreciation or amortisation if no impairment loss had been recognised. Recognised impairment There was $1.7m of impairment expense recognised on specific assets at during FY26 (FY25: $1.0m). There was no reversal of prior period impairment loss recognised in FY26 (FY25: Nil).
Page 111
108 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued B.3. Impairment of non-current assets continued KEY ESTIMATES AND JUDGEMENTS Reserve estimates and mine life Reserves are estimates of the amount of product that can be economically and legally extracted from the Group’s mining tenements. In order to calculate reserves, estimates and assumptions are required to be formulated about a range of geological, technical and economic factors including quantities, grades, production techniques, recovery rates, production costs, transportation costs, refining costs, commodity demand, commodity prices and exchange rates. Estimating the quantity and/or grade of reserves requires the size, shape and depth of the ore bodies or field to be determined by analysing geological data such as drilling samples. This process may require complex and difficult geological judgement and calculation to interpret the data. As the economic assumptions used to estimate reserves change from period to period, and because additional geological data is generated during the course of operations, estimates of reserves may change from period to period. Changes in reported reserves may affect the Group’s financial results and financial position in a number of ways, including: • asset carrying values may be affected due to changes in the estimated future cash flows; and • depreciation and amortisation charges in the statement of comprehensive income may change as result of the change in the useful economic lives of assets. Mineral resources and ore reserves are reported in accordance with the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”). Impairment of non-financial assets The Group assesses at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an assets or cash generating unit’s (CGU) fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing recoverable value, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where applicable, the fair value less costs to sell calculation is based on a 19-year discounted cash flow (DCF) model, which assumes ongoing licence renewals in Malaysia on similar terms to the current licence. The cash flows are derived from the two-year budget and forecast model that is extrapolated over 19 years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is sensitive to product price movement, volume, operating and capital cost, the discount rate used for the discounted cash flows model as well as the expected future cash inflows and the growth rate used for extrapolation purposes.
Page 112
109 Lynas Rare Earths Limited | 2026 Annual Report C. CASH, BORROWINGS AND CAPITAL This section includes information about cash and cash equivalents, borrowings and capital position of the Company at the end of the reporting period. C.1. Cash and cash equivalents As at 30 June In A$’000 2026 2025 Cash at bank and on hand 233,984 101,744 Cash deposits 270,144 64,746 Total cash and cash equivalents 504,128 166,490 Recognition and measurement Cash and cash equivalents comprise cash on hand, deposits held at call with banks and other short-term highly liquid investments with maturities of three months or less, that are held for the purpose of meeting short-term cash commitments and are readily convertible to a known amount of cash and subject to an insignificant risk of changes in value. Fair value and foreign exchange risk The carrying amount of cash and cash equivalents approximates their fair value. The Group’s cash and cash equivalents include A$278.2m in currencies other than Australian dollars, primarily US$122.8m (30 June 2025: US$59.3m) and MYR 279.5m (30 June 2025: MYR 120.2m). Reconciliation of the profit for the year with the net cash from operating activities For the year ended 30 June In A$’000 2026 2025 Profit for the year 222,352 7,990 Adjustments for: Depreciation and amortisation 138,681 94,995 Share-based payments 14,278 7,177 Net financial income (8,699) (3,548) Impairment loss / other non-cash loss (1,613) (2,027) Income tax expense 33,704 1,749 Foreign exchange loss included in profit for the year (3,414) (15,001) Change in trade and other receivables (99,210) 648 Change in inventories (52,667) 56,397 Change in operating trade and other payables 48,332 5,073 Change in employee benefit provision 2,193 1,526 Change in provisions (rehabilitation obligation) (19,555) (30,314) Change in deferred tax liability 36,777 – Income tax paid / (received) 7,651 (20,498) Net cash from operating activities 318,810 104,167
Page 113
110 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued C.2. Short-term Deposits As at 30 June In A$’000 2026 2025 Short term deposits 704,971 – Total short-term deposits 704,971 – Short-term deposits are held with major Australian financial institutions and have original maturities of greater than 3 months but less than 12 months. C.3. Interest Bearing Liabilities As at 30 June In A$’000 2026 2025 Current borrowings JARE loan facility(1) 27,681 29,166 Total current borrowings 27,681 29,166 Non-current borrowings JARE loan facility 92,000 122,092 Total non-current borrowings 92,000 122,092 (1) In line with the repayment schedule below, payments of US$10m (AU$13.8m) are due 31 December 2026 and 30 June 2027. These have been classified as current liabilities at 30 June 2026. Recognition and measurement Interest bearing loans and borrowings Subsequent to initial recognition interest bearing loans and borrowings are measured at amortised cost using the effective interest method. KEY ESTIMATES AND JUDGEMENTS Interest bearing loans and borrowings are measured at amortised cost using the effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability to the amortised cost of the liability. The Group has applied judgement and determined the appropriate rate for a similar instrument to be 6.5% (FY25: 6.5%). When the Group revises the estimates of future cash flows, the carrying amount of the financial liability is adjusted to reflect the new estimate discounted using the original effective rate. Any changes are recognised in the profit or loss.
Page 114
111 Lynas Rare Earths Limited | 2026 Annual Report Fair value and foreign exchange risk The fair value of borrowings, which have been determined for disclosure purposes, is calculated by discounting the future contractual cash flows at the current market interest rates that are available for similar financial instruments. The fair value methodology adopted was categorised as Level 3 in the fair value hierarchy. There has been no change to the valuation technique during the year. These have been determined as follows: As at 30 June 2026 As at 30 June 2025 Carrying amount (AUD ‘000) Fair value (AUD ‘000) Carrying amount (AUD ‘000) Fair value (AUD ‘000) JARE loan facility 119,681 113,398 151,258 142,987 119,681 113,398 151,258 142,987 Terms and debt maturity schedule As at 30 June 2026 As at 30 June 2025 Currency Nominal interest rate Date of maturity Face value (USD ‘000) Face value (AUD ‘000) Face value (USD ‘000) Face value (AUD ‘000) JARE loan facility USD 2.5% June 2030 90,000 130,770 110,000 168,404 90,000 130,770 110,000 168,404 Reconciliation of liabilities arising from financing activities 1 July 2025 Cash flows 30 June 2026 In A$’000 Opening Balance Repayments Effective Interest Foreign Exchange Additions(1) Closing Balance JARE loan facility 151,258 (29,463) 5,270 (7,384) – 119,681 Lease liability 50,787 (20,561) 15,018 (24) 173,435 218,655 Total 202,045 (50,024) 20,288 (7,408) 173,435 338,336 (1) Additions in the non-cash movements in the lease liability during the year ended 30 June 2026 related to finance leases recognised in line with AASB 16. 1 July 2024 Cash flows 30 June 2025 In A$’000 Opening Balance Repayments Effective Interest Foreign Exchange Additions(1) Closing Balance JARE loan facility 171,838 (31,390) 6,364 4,446 – 151,258 Lease liability 12,140 (7,569) 2,260 991 42,965 50,787 Total 183,978 (38,959) 8,624 5,437 42,965 202,045 (1) Additions in the non-cash movements in the lease liability during the year ended 30 June 2025 related to finance leases recognised in line with AASB 16.
Page 115
112 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued C.4. Financing facilities Japan Australia Rare Earths B.V. (JARE) loan facility An extension of the JARE loan facility was announced on 27 June 2019. As part of this extension, new terms were agreed to as detailed below. The maturity date of the JARE loan facility is 30 June 2030. The interest rate on this facility is 2.5% p.a. at 30 June 2026 (30 June 2025: 2.5% p.a.). Interest liabilities will be paid directly to the lenders at 31 December and 30 June each year. The details of the fixed repayments are as follows: Repayment date Amount Each half-year from 31 Dec 2026 to 31 Dec 2027 US$10m on each date Each half-year from 30 June 2028 to 30 June 2030 US$12m on each date Japan will have the following priority supply rights until 2038: 1. Any fundraising will not hinder Lynas’ ability to support Japanese industries diversifying their rare earths supply sources, in accordance with the Availability Agreement announced on 30 March 2011. 2. Lynas shall ensure that in the event of competing demands from the Japanese market and a non-Japanese market for the supply by the Borrower or Lynas Malaysia for NdPr produced from the Lynas Malaysia plant, the Japanese market shall have priority of supply up to 7,200 tonnes per year subject to the terms of the Availability Agreement and to the extent that Lynas will not have any opportunity loss. 3. JARE has rights of negotiation with Lynas in priority to non-Japanese market customers for the priority supply to the Japanese market of additional NdPr and Nd products produced by the Lynas 2025 Project. 4. Lynas will continue to prioritize the needs of Japanese customers for the supply of heavy rare earths products produced, to the extent possible under any agreement with the U.S. To date, the JARE loan facility has been secured over all of the assets of the Group, other than the Malawi and Malaysia assets. Covenants The following financial covenants are included with the JARE loan facility. They are calculated semi-annually based on the financials for the Group as at 30 June and 31 December of each year: • Net Worth Amount, being the total amount of shareholders’ equity; • Gross Debt to Equity Ratio; • Forward Looking Debt Service Coverage Ratio, being the Cash Flow Available for Debt Service divided by the Total Debt Service in relation to the next forecast period; and • Backward Looking Debt Service Coverage Ratio, being the Cash Flow Available for Debt Service divided by the Total Debt Service in relation to the previous period. The failure to comply with one of the ‘financial covenants’ is not a default event under the Loan. Rather it is a Review Event the effect of which is to require Lynas to obtain JARE’s consent to certain transactions (ie distributions, changes to share capital and incurring financial liabilities (other than Permitted Financial Liabilities) without JARE’s consent.
Page 116
113 Lynas Rare Earths Limited | 2026 Annual Report C.5. Contributed equity As at 30 June 2026 2025 Number of shares ‘000 Value of shares A$ ‘000 Number of shares ‘000 Value of shares A$ ‘000 Balance at the beginning of the year 935,447 2,091,089 934,718 2,091,089 Issue of shares pursuant to exercised performance rights 673 – 729 – Issue of shares pursuant to equity raising 70,383 914,286 – – Closing balance 1,006,503 3,005,375 935,447 2,091,089 All issued ordinary shares are fully paid and have no par value. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share. All shares rank equally with regard to the Group’s residual assets in the event of a wind-up. Recognition and measurement Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds. Where equity instruments are reacquired by the Group, for example, as a result of a share buy-back, those instru- ments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the statement of comprehensive income and the consideration paid including any directly attributable incremental costs (net of income taxes) is directly recognised in equity. C.6. Reserves As at 30 June In A$’000 2026 2025 Equity settled employee benefits 94,422 80,144 Foreign currency translation (81,923) (68,693) Warrant reserve 21,765 21,765 Balance at 30 June 34,264 33,216 Nature and purpose The equity settled employee benefits reserve relates to performance rights granted by the Group to its employees under the employee share option plan. Further information about share-based payments to employees is set out in Note E.7. Exchange differences relating to the translation of the results and net assets of the Group’s foreign operations from their functional currencies to the Group’s presentation currency are recognised directly in other comprehensive income and accumulated in the foreign currency translation reserve. Warrant reserve includes options issued as part of rights issues.
Page 117
114 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued C.7. Risk Key Financial and capital risks associated with cash, debt and capital Exposure to market, credit and liquidity risks arise in the normal course of the Group’s business. The Directors and management of the Group have overall responsibility for the establishment and oversight of the Group’s risk management framework. The Directors have established a treasury policy that identifies risks faced by the Group and sets out policies and procedures to mitigate those risks. Monthly consolidated financial reports are prepared for the Directors, who ensure compliance with the Group’s risk management policies and procedures. Capital risk management The Directors are responsible for monitoring and managing the Group’s capital structure. The Directors’ policy is to maintain an acceptable capital base to promote the confidence of the Group’s financiers and creditors and to sustain the future development of the business. The Directors monitor the Group’s financial position to ensure that it complies at all times with its financial and other covenants as set out in its financing arrangements. In order to maintain or adjust the capital structure, the Directors may elect to take a number of measures including, for example, to dispose of assets or operating segments of the business, to alter its short to medium term plans in respect of capital projects and working capital levels, or to re-balance the level of equity and external debt in place. Capital comprises share capital, external debt and reserves. Liquidity risk management Liquidity risk is the risk that the Group will not meet its contractual obligations as they fall due. The Group’s approach to managing liquidity risk is to ensure that it will always have sufficient liquidity to meet its liabilities as and when they fall due and comply with covenants under both normal and stressed conditions. The Group evaluates its liquidity requirements on an on-going basis and ensures that it has sufficient cash on demand to meet expected operating expenses including the servicing of financial obligations. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. Interest rate risk management The Group’s interest rate risk arises from long-term borrowings at both fixed and floating rates and deposits which earn interest at floating rates. Borrowings and deposits at floating rates expose the Group to cash flows interest rate risk. The Group’s exposure to interest rate risk is shown below: 30 June 2026 Interest Rate Risk 30 June 2025 Interest Rate Risk Exposure 1.0% –1.0% Exposure 1.0% –1.0% In A$’000 Impact on Profit and Equity Impact on Profit and Equity Floating rate instruments Cash and cash equivalents 504,128 5,041 (5,041) 166,490 1,665 (1,665) Short-term deposits 704,971 7,050 (7,050) Other non-current assets 18,793 187 (187) 18,698 187 (187) Total 1,227,892 12,278 (12,278) 185,188 1,852 (1,852)
Page 118
115 Lynas Rare Earths Limited | 2026 Annual Report Maturity analysis of financial liabilities The table below sets out a maturity analysis for financial liabilities containing principal and interest flows. For loans outstanding, undiscounted cash flows are presented until contractual final maturity. Interest cash flows are projected based on the interest rates prevailing on the closing date. In A$’000 Carrying Amount Contracted cash flows Up to and including 6 months Between 6 months and up to 1 year Between 1 year and up to 5 years Over 5 years 30 June 2026 JARE loan facility 119,681 138,456 16,183 15,976 106,297 – Lease liabilities 218,655 471,092 14,037 14,037 100,534 342,484 Total 338,336 609,548 30,220 30,013 206,831 342,484 30 June 2025 JARE loan facility 151,258 180,474 17,432 17,207 108,402 37,433 Lease liabilities 50,788 81,725 4,328 4,328 20,728 52,341 Total 202,046 262,199 21,760 21,535 129,130 89,774 Foreign exchange risk management The Group’s foreign exchange risks are detailed in the basis of preparation of these financial reports. There are two elements of foreign exchange risk. Firstly, the Group holds cash, trade receivables and trade payables currencies other than the functional currency of the Company in which it is held. Movement in the prevailing exchange rates have an impact on the Group’s profit and equity. Secondly, the Group’s members are exposed to foreign exchange risk on the translation of its operations that are denominated in currencies other than AUD. The Group’s net assets denominated in currencies other than the AUD which have the potential of impacting the other comprehensive income component of the statement of comprehensive income are: Carrying Amount Foreign Exchange Risk –10% 10% In A$’000 Profit Equity Profit Equity As at 30 June 2026 Net exposure of US$ financial assets US$ 63,403 5,004 – (5,004) – Net exposure of A$ financial assets A$ 2,846 541 – (541) – Net asset exposure – MYR currency MYR 1,929,520 – (62,743) – 76,686 Net asset exposure – US$ currency US$ (5,619) – 818 – (818) As at 30 June 2025 Net exposure of US$ financial assets US$ 89,217 9,959 – (9,959) – Net exposure of A$ financial assets A$ 953 2,098 – (2,098) – Net asset exposure – MYR currency MYR 2,087,789 – (60,693) – 74,180 Net asset exposure – US$ currency US$ (5,317) – 812 – (812)
Page 119
116 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued D. OTHER ASSETS AND LIABILITIES This section includes information about the other assets and liabilities position at the end of the period. D.1. Trade and other receivables As at 30 June In A$’000 2026 2025 Trade receivables at amortised cost 114,484 30,482 Trade receivables at fair value 20,029 14,249 GST / VAT receivables 4,113 3,448 Other receivables 9,586 823 Total current trade and other receivables 148,212 49,002 The Group’s exposure to credit risk is primarily in all its trade receivables. As at 30 June 2026 $9.4m (2025: $1.4m) of trade receivables were past due but not impaired. The full amount has been received subsequent to 30 June 2026. Where debtors become overdue, the Group maintains regular contact and has a history of collecting trade receivables in full. At 30 June 2026, the Group had sales under contract amounting to A$169.3m (US$116.4m) (30 June 2025: A$103.4m (US$67.5m)) subject to price adjustments. A 5% change in NdPr Pricing at 30 June 2026 would have resulted in an increase/decrease in the fair value of the trade receivable by $9.5m (2025: $5.7m). At the date of this report, A$73.4m (US$49.9m) of this amount has been finalised with minimal price adjustments. Recognition and measurement Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for instruments with maturities greater than 12 months from the reporting date, which are classified as non-current assets. The Group’s receivables comprise trade and other receivables (including related party receivables) which are stated at their cost less impairment losses. Fair value and foreign exchange risk Given the short-term nature of trade receivables, the carrying amount is a reasonable approximation of fair value. All trade receivables are held in currencies other than the functional currency of the entity receipting them and therefore exposed to foreign exchange risk. D.2. Inventories As at 30 June In A$’000 2026 2025 Raw materials and consumables 60,623 39,655 Work in progress 126,605 115,368 Finished goods 53,581 33,119 Total inventories 240,809 188,142 Current inventories 227,593 176,121 Non-current inventories 13,216 12,021 Total inventories 240,809 188,142 During the year ended 30 June 2026 inventories of $585.0m (2025: $418.2m) were recognised as an expense, all of which were included in ‘cost of sales’.
Page 120
117 Lynas Rare Earths Limited | 2026 Annual Report Depreciation recognised in inventories The Group recognised depreciation on its property, plant and equipment and amortisation on its deferred development expenditure and intangible assets for the years ended 30 June 2026 and 2025 respectively in the following categories: Recognised in General and Administration Expense Recognised in Inventory Total In A$’000 2026 2025 2026 2025 2026 2025 Property, plant and equipment and right of use assets 32,764 27,456 109,163 63,238 141,927 90,694 Deferred development expenditure 6,962 3,674 – – 6,962 3,674 Intangibles 831 627 – – 831 627 Total 40,557 31,757 109,163 63,238 149,720 94,995 On the sale of inventory to customers, the component of the depreciation or amortisation expense capitalised within inventory is reflected in the cost of goods sold in the statement of comprehensive income as a component of the profit or loss. This was $98.1m in the year ended 30 June 2026 (2025: $63.2m). Write downs of inventory During the year ended 30 June 2026, there were no inventory write-downs to net realisable value. (2025: $1.9m) Recognition and measurement Raw materials, work in progress and finished goods Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based either on the first in first out (“FIFO”) or weighted average principles and includes expenditure incurred in acquiring the invento- ries and bringing them to their existing location and condition. In the case of manufactured or refined inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Inventory expected to be sold or consumed within the next 12 months is classified as current, with amounts expected to be consumed or sold after this time being classified as non-current. Engineering and maintenance materials Engineering and maintenance materials (representing either critical or long order components but excluding rotable spares) are measured at the lower of cost and net realisable value. The cost of these inventories is based on the weighted average principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. Net realisable value is determined with reference to the cost of replacement of such items in the ordinary course of business compared to the current market prices.
Page 121
118 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued D.3. Other non-current assets As at 30 June In A$’000 2026 2025 Security deposits – banking facilities and other, Malaysia 2,533 2,541 Security deposits – banking facilities and other, Australia 13,395 16,157 Security deposits – AELB 64,068 78,344 79,996 97,042 Deposits to the Malaysian Government’s Atomic Energy Licensing Board (“AELB”) form a component of a total US$50.0m of instalments due in accordance with the conditions underlying the granting of the original Full Operating Stage Licence to the Group for the Lynas Malaysia plant. The total amount deposited as security via a bond for the instalments is US$31.2m (A$45.3m) (FY25: US$39.0m (A$59.7m)) all of which is interest earning. A further US$11.0m paid via cash between 2012 and 2016 directly to AELB is not interest earning and has been discounted to a present value of A$6.9m (FY25: A$5.9m). Under revisions to the operating licence, a further A$11.8m in deposits have been made to the AELB to satisfy licence conditions. Recognition and measurement Financial assets are classified, at initial recognition and subsequently measured at amortised cost, fair value through other comprehensive income and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables, the Group initially measures a financial asset at its fair value. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets at amortised cost This category is the most relevant to the Group as all deposits in Note D.3 are classified this way. The Group meas- ures financial assets at amortised cost if both of the following conditions are met: • The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows, and • The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Group’s financial assets at amortised cost includes trade receivables, and security deposits included under other non-current financial assets.
Page 122
119 Lynas Rare Earths Limited | 2026 Annual Report D.4. Trade and other payables As at 30 June In A$’000 2026 2025 Trade payables 32,150 39,016 Accrued expenses 52,691 33,106 Other payables 22,561 11,399 Total trade and other payables 107,402 83,521 Current 107,402 83,521 Non-current – – Total trade and other payables 107,402 83,521 Recognition and measurement Current trade and other payables are non-interest bearing and are normally settled on 30 to 60 day terms. Subsequent to initial recognition trade and other payables are stated at amortised cost using the effective interest method. Given the short-term nature of trade payables, the carrying amount is a reasonable approximation of fair value. D.5. Provisions and Employee benefits As at 30 June In A$’000 2026 2025 Current Short term employee benefits 8,780 7,176 Restoration and rehabilitation(1) 24,897 27,355 Total current 33,677 34,531 Non-Current Long term employee benefits 1,439 850 Restoration and rehabilitation 313,908 270,565 Total non-current 315,347 271,415 (1) The current portion of the restoration and rehabilitation provision represents Lynas’ best estimate of the present value of the outflows relating to the discharge of the rehabilitation obligation relating to residue disposal in Malaysia over the next 12-month period. Recognition and measurement A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefit will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the provision for the passage of time is recognised as a financial expense in the statement of comprehensive income as a component of the profit or loss. Short-term employee benefits Short-term employee benefits are expected to be settled within one year and measured on an undiscounted basis and are expensed in the statement of comprehensive income as a component of the profit or loss as the related services are provided. A provision is recognised for the amount expected to be paid under short-term cash bonus plans and outstanding annual leave balances if the Group has a present legal or constructive obligation to pay this amount as a result of past services provided by the employee and the obligation can be estimated reliably.
Page 123
120 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued Long-term employee benefits The liability for annual leave and long service leave for which settlement can be deferred beyond 12 months from the balance date is measured as the present value of expected future payments to be made in respect of services provided by employees. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Incentive compensation plans The Group recognises a liability and associated expense for incentive compensation plans based on a formula that takes into consideration certain threshold targets and the associated measures of profitability. The Group recog- nises a provision when it is contractually obligated or when there is a past practice that has created a constructive obligation to its employees. Restoration and rehabilitation The activities of the Group give rise to obligations for asset and site restoration and rehabilitation at the Lynas Malaysia plant, Mount Weld concentration plant and Lynas Kalgoorlie facility. The key areas of uncertainty in estimating the provisions for these obligations are set out below. Upon cessation of operations, the site including the processing assets, ancillary facilities, utilities and the onsite storage facility will be decommissioned and any materials removed from the location. The Group engaged third party specialists in 2026 to assist in estimating the restoration and rehabilitation provi- sions at Mt Weld and Lynas Kalgoorlie as at 30 June 2026. The unwinding effect of discounting of the provision is recognised as a financial expense. The mining/extraction and refining/processing activities of the Group give rise to obligations for asset and site rehabilitation. Rehabilitation obligations can include facility decommissioning and dismantling, removal or treat- ment of waste materials, land rehabilitation and site restoration. The extent of work required and the associated costs are estimated based on feasibility and engineering studies using current restoration standards and tech- niques. Provisions for the cost of each rehabilitation programme are recognised at the time that the environmental disturbance occurs. Rehabilitation provisions are initially measured at the expected value of future cash flows required to rehabilitate the relevant site, discounted to their present value. The value of the provision is progressively increased over time as the effect of discounting unwinds. When provisions for rehabilitation are initially recognised, the corresponding cost is capitalised as an asset, representing part of the cost of acquiring the future economic benefits of the operation. The capitalised cost of rehabilitation activities for the Group’s mining operations and refining operations are recognised as a component of property, plant and equipment. Amounts capitalised are depreciated or amortised accordingly. At each reporting date the rehabilitation liability is re-measured to account for any new disturbance, updated cost estimates, changes to the estimated lives of the associated operations, new regulatory requirements and revisions to discount rates. Changes to the rehabilitation liability are added or deducted from the related rehabilitation asset and amortised accordingly. D.5. Provisions and Employee benefits continued
Page 124
121 Lynas Rare Earths Limited | 2026 Annual Report As at 30 June In A$’000 2026 2025 Restoration and Rehabilitation Balance at the beginning of the year 297,920 279,281 Provisions made during the year 71,098 31,867 Provisions paid during the year (19,555) (30,314) Changes to discounts rates (18,730) (20,238) Effects of foreign exchange movement (3,105) 26,116 Unwinding of discount on provision 11,177 11,208 Balance at 30 June 338,805 297,920 Key financial risks associated with other assets and liabilities Credit risk management Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and related entities. The Group’s exposure to credit risk is primarily in its trade and other receivables and is influenced mainly by the individual characteristics of each customer. Demographically there are no material concentrations of credit risk. Cash and cash deposits, short term deposits, and deposits included in “other assets” are held in banks and financial institutions with A+ credit ratings. Management believes that the Group’s trade and other receivables are collectible in full, based on historical behaviour and extensive analysis of customer credit risk, including underlying customers’ credit ratings if they are applicable. KEY ESTIMATES AND JUDGEMENTS Restoration and rehabilitation expenditure The Group’s accounting policy for its restoration and rehabilitation closure provisions requires significant estimates and assumptions such as: requirements of the relevant legal and regulatory framework; the magnitude of possible contamination; and the timing, extent and costs of required closure and rehabilitation activity. These uncertainties may result in future actual expenditure differing from the amounts currently provided. The provision recognised is periodically reviewed and updated based on the facts and circumstances available at the time. Changes to the estimated future costs for operating sites are recognised in the statement of financial position by adjusting both the closure and rehabilitation asset and the provision. The planned timing of closure and rehabilitation activities at Mt Weld, Kalgoorlie and Lynas Malaysia (other than the residues disclosed below) are currently approximately aligned to the life of mine assumptions at Mt Weld. However, regulatory, operational, environmental or market factors could result in those activities occurring earlier than currently assumed. Lynas Malaysia production residues On 30 January 2020, the Group announced that The State Government of Pahang has issued its consent to a site for the Permanent Disposal Facility (PDF) for Water Leach Purification (WLP) residue. In additional Lynas Malaysia has appointed Gading Senggara Sdn Bhd (“GSSB”) as the contractor to manage the entire PDF project. The total cost of this project will be MYR 400m (A$ 128.4m). The provision for restoration and rehabilitation has been updated to reflect the present value of the obligation that exists at 30 June 2026. Those costs expected to be due within 12 months have been reflected as current. The unwinding effect of discounting of the provision is recognised as a finance cost. Payments of $19.6m (FY25: $30.3m) in relation to the discharge of rehabilitation liabilities are recognised in the Statement of Cash Flows as an operating cash outflow. The Group has included its best estimate of the timing of these costs within the provision for restoration and rehabilitation at 30 June 2026.
Page 125
122 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued E. OTHER ITEMS This section includes information on items which require disclosure to comply with Australian Accounting Standards and the Australian Corporations Act 2001.This section includes group structure information and other disclosures. E.1. Contingent liabilities An amount of US$39.0m (FY25: US$39.0m) has been deposited via a bond for instalments required in accordance with the conditions underlying the granting of the Full Operating Stage Licence to the Group for the LAMP in Malaysia. Should criteria as part of this grant not continue to be met, this amount may be utilised to settle obliga- tions. The Group has determined that the possibility of a material outflow related to these contingent liabilities is remote. Refer to Note D.3 for details of bonds. Litigation and legal proceedings As a result of its operations the Group has certain contingent liabilities related to certain litigation and legal proceedings. The Group has determined that the possibility of a material outflow related to these contingent liabilities is remote. Security and guarantee arrangements Certain members of the Group have entered into guarantee and security arrangements in respect of the Group’s indebtedness as described in Note E.6. E.2. Other commitments Exploration commitments As at 30 June In A$’000 2026 2025 Less than one year 613 594 Between one and five years 1,030 1,373 More than five years 1,436 3,912 Total 3,079 5,879 These include commitments relating to tenement lease rentals and the minimum expenditure requirements of the Western Australia Department of Mines and Petroleum attaching to the tenements and are subject to re-nego- tiation upon expiry of the exploration leases or when application for a mining licence is made. These are necessary in order to maintain the tenements in which the Group and other parties are involved. All parties are committed to meet the conditions under which the tenements were granted in accordance with the relevant mining legislation. Capital commitments As at 30 June In A$’000 2026 2025 Less than one year – 53,147 Between one and five years – 55,247 More than five years – 183,558 Total – 291,952 At 30 June 2025 the capital commitments due in less that one year primarily related to the completion of the Mt Weld expansion project. Longer term commitments relate to the future lease commitments as further components of the Zenith Power Station are constructed. At 30 June 2026, there are no significant capital commitments remaining associated to the Mt Weld expansion project and the Zenith Power Station has been fully recognised as a lease.
Page 126
123 Lynas Rare Earths Limited | 2026 Annual Report E.3. Auditor remuneration The following items of expenditure are included in general and administration expenses: For the year ended 30 June In A$ 2026 2025 Auditor’s remuneration to Ernst & Young (Australia), comprising: Fees for auditing the statutory financial report of the parent covering the group 429,399 370,564 Fees for other services Tax Services – – Other assurance and agreed upon procedures 95,000 58,300 Advisory Services – – Total auditor’s remuneration Ernst & Young (Australia) 524,399 428,864 Auditor’s remuneration to Ernst & Young (other locations), comprising: Fees for auditing the financial report of any controlled entities 177,913 163,000 Fees for other services Tax Services – 30,374 Total auditor’s remuneration Ernst & Young (other locations) 177,913 193,374 Total auditor’s remuneration 702,312 622,238 Other tax service fees paid to EY Australia and other locations in FY25 and FY26 relate to completion of tax returns for expatriate employees. E.4. Subsidiaries Ownership interest as at 30 June Name of Group entity Principal activity Country of incorporation 2026 2025 Lynas Malaysia Sdn Bhd Operation and development of advanced material processing plant Malaysia 100% 100% Lynas Services Pty Ltd(1) Provision of corporate services Australia 100% 100% Mount Weld Holdings Pty Ltd(1) Holding company Australia 100% 100% Mount Weld Mining Pty Ltd(1) Development of mining areas of interest and operation of concentration plant Australia 100% 100% Lynas Kalgoorlie Pty Ltd(1) Development of operations in Kalgoorlie Australia 100% 100% Lynas Africa Holdings Pty Ltd(1) Holding company Australia 100% 100% Lynas Africa Ltd Mineral exploration Malawi 100% 100% Lynas USA LLC Development of processing opportunities in USA USA 100% 100% Lynas France SAS Provision of corporate services France 100% – Lynas OpCo Pty Ltd Holding company Australia 100% – (1) Entity has entered into a deed of cross guarantee with Lynas Rare Earths Limited pursuant to ASIC Instrument 2016/785 and is relieved from the requirement to prepare and lodge an audited financial report, as discussed in Note E 6. Entity is also a member of the tax- consolidated group.
Page 127
124 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued E.5. Parent entity Information As at 30 June In A$’000 2026 2025 Current assets 564,350 13,708 Total assets 2,353,329 1,455,622 Current liabilities (27,680) (29,294) Total liabilities (145,845) (177,552) Net assets 2,207,484 1,278,070 Share capital 3,005,375 2,091,089 Accumulated deficit (1,149,258) (1,150,108) Reserves 351,367 337,089 Total shareholders’ equity 2,207,484 1,278,070 Loss of the Company (850) 13,771 Total comprehensive profit/ (loss) of the parent Company (850) 13,771 E.6. Entities under a Deed of Cross Guarantee Pursuant to ASIC Instrument 2016/785 (as amended) dated August 13, 1998, the wholly-owned Australian subsidi- aries of Lynas Rare Earths Limited are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports, and Director’s reports. It is a condition of the Class Order that the Company and each of the subsidiaries enter into a Deed of Cross Guarantee. The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of any of the subsidiaries under certain provisions of the Corporations Act 2001. If a winding up event occurs under any other provision of the Act, the Company will only be liable in the event that after six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound-up. The subsidiaries in addition to the Company subject to the deed are specified in Note E.3.
Page 128
125 Lynas Rare Earths Limited | 2026 Annual Report A statement of comprehensive income and statement of financial position, comprising the Company and controlled entities which are party to the Deed, after eliminating all transactions between parties to the Deed of Cross Guarantee is presented as follows: Statement of Financial Position As at 30 June In A$’000 2026 2025 Cash and cash equivalents 276,267 40,992 Short-term deposits 538,155 – Trade and other receivables 483,577 96,810 Inventories 73,280 47,563 Total current assets 1,371,279 185,365 Inventories 13,216 12,021 Property, plant and equipment 1,790,860 1,586,410 Deferred exploration, evaluation and development expenditure 129,349 115,287 Intangibles 637 216 Investments in subsidiaries 375,094 375,080 Other assets 7,735 82,273 Total non-current assets 2,316,891 2,171,288 Total assets 3,688,170 2,356,652 Trade and other payables 106,368 73,792 Borrowings 27,681 29,166 Employee benefits 7,866 6,355 Lease liability 4,955 4,553 Intercompany payables 817,341 510,288 Total current liabilities 964,211 624,153 Provisions 96,029 68,327 Employee benefits 1,439 850 Lease liability 92,000 122,092 Borrowings 211,987 44,372 Total non-current liabilities 401,455 235,640 Total liabilities 1,365,666 859,794 Net assets 2,322,504 1,496,858 Share capital 3,005,375 2,091,089 Accumulated deficit (880,326) (786,969) Reserves 197,455 192,738 Total equity 2,322,504 1,496,858
Page 129
126 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued Statement of comprehensive income For the year ended 30 June In A$’000 2026 2025 Revenue 477,511 194,352 Cost of sales (261,106) (142,541) Gross profit 216,405 51,811 Other income / (expenses) 1 (738) Foreign exchange gains / (losses) 4,890 (1,310) General and administration expenses net of recoveries (123,047) (63,366) Impairment charges (1,751) (3,162) Profit / (loss) from operating activities 94,498 (16,765) Financial income 37,696 22,185 Financial expenses (13,672) (15,585) Net financial income 24,024 6,600 Profit / (loss) before income tax 120,522 (10,165) Income tax benefit / (expense) (40,737) 756 Profit / (loss) for the year from continuing operations 79,785 (9,409) Other comprehensive loss, net of income tax – – Exchange differences on foreign currency transactions – – Total other comprehensive income for the year, net of income tax – – Total comprehensive income / (loss) for the year 79,785 (9,409) E.7. Employee costs and share based payments The following items are gross employee costs before recoveries included in general and administration expenses: For the year ended 30 June In A$’000 2026 2025 Wages and salaries 100,081 79,619 Superannuation and pension contributions 9,660 9,265 Employee remuneration settled through share-based payments 14,278 7,176 Termination costs 443 696 Other 1,834 1,208 Total employee costs 126,296 97,964 E.6. Parent entity Information continued
Page 130
127 Lynas Rare Earths Limited | 2026 Annual Report Share-based remuneration benefits are provided to employees via a variety of schemes which are further set out below. The fair values of the performance rights granted under these various schemes are recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at the grant date and recog- nised over the period during which the employees become unconditionally entitled to the performance rights. The fair value at grant date is independently determined using a performance right pricing model that takes into account the exercise price, the term of the performance right, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the performance right. The fair value of the performance right granted is measured to reflect the expected market vesting conditions, but excludes the impact of any non-market vesting conditions (for example, profitability and production targets). Non-market vesting conditions are included in assumptions about the number of performance rights that are expected to become exercisable. At the end of each reporting period, the Group revises its estimates of the number of performance rights that are expected to become exercisable. The employee benefits expense recognised each period takes into account the most recent estimate. The impact of the revision to original estimates, if any, is recognised in the statement of comprehensive income as a component of profit or loss, with a corresponding adjustment to equity. Key management personnel compensation The aggregate compensation made to the Directors and other members of KMP of the Group is set out below: For the year ended 30 June In A$ 2026 2025 Short-term employee benefits 9,477,847 7,205,542 Long-term employee benefits 56,291 57,846 Post-employment benefits 324,157 314,895 Share based payments 7,405,163 3,656,216 Total compensation paid to key management personnel 17,263,458 11,234,499 The compensation of each member of the KMP of the Group for the current and prior year is set out within the Remuneration Report. All transactions with these related parted have been considered and included in the report. The share-based payments amount represents the impact of amortising the accounting value of options and performance rights over their vesting periods including the impact of forfeitures recognised during the period. At times, a negative value may be presented which results from the forfeitures recognised in the period (which may relate also to earlier periods) are greater than the accounting expense for the current portion of the vesting period. Employee share options and performance rights The Group has established an employee share plan whereby, at the discretion of Directors, performance rights may be granted over the ordinary shares of the Company for the benefit of Directors, Executives and certain employees of the Group. The performance rights are granted in accordance with performance guidelines established by the Nomination, Remuneration and Community Committee. Other than short term incentives, each performance right is convertible into one ordinary share of the Company during the two years following the vesting date, which is the third anniversary of the grant date. The performance rights hold no voting or dividend rights and are not transferrable. Performance rights are granted for the benefit of Key Management Personnel (“KMP”) and other selected employees to provide greater alignment to our strategic business objectives. KMP are those people who have authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any Executive Director of the Group and the Executives. At year end, the Executives include the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the Group’s General Counsel & Company Secretary, Vice President – Major Projects and Vice President – Malaysia.
Page 131
128 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued Movements in employee performance rights during the year For the year ended 30 June 2026 For the year ended 30 June 2025 Number of performance rights (‘000) Weighted average exercise price ($) Number of performance rights (‘000) Weighted average exercise price ($) Balance at beginning of year 4,568,507 0.00 3,619,173 0.00 Granted during the year 978,161 0.00 2,039,303 0.00 Exercised during the year (672,830) 0.00 (728,687) 0.00 Forfeited during the year (828,237) 0.00 (361,282) 0.00 Balance at end of year 4,045,601 0.00 4,568,507 0.00 Vested and exercisable at end of year – 0.00 – 0.00 During the year ended 30 June 2026 the Group recognised net share based payment expense of $14.3m (FY25: $7.2m) within the profit and loss component of the statement of comprehensive income. The employee performance rights outstanding at the end of the year had a nil exercise price and a weighted average remaining contractual life of 412 days (FY25: 382 days). The performance rights exercised during the year had a weighted average share price on exercise date of $14.41 (FY25: $8.36). Performance rights granted in the period STI Grants Under the STI Plan, Executive KMP can earn an annual incentive based on performance during the year. STI Plan performance conditions align with Lynas’ annual operational and financial goals. The performance conditions are chosen to incentivise performance that is consistent with desired business outcomes and which contributes to longer term growth in shareholder value. For the year ended 30 June 2026, in addition to the Executive KMP, three members of the Lynas Leadership Team and forty nine senior employees who are critical to the delivery of Lynas’ short-term operational and financial goals were invited to participate in the STI Plan. STI performance rights are subject to a vesting condition of continued employment at Lynas for a period of 12 months after the grant date. E.7. Employee costs and share based payments continued
Page 132
129 Lynas Rare Earths Limited | 2026 Annual Report LTI Grants For the CEO, other Executive KMP and Lynas Leadership Team, three vesting conditions apply to the LTI grants made during FY26: • Relative Total Shareholder Return (TSR) • Strategic Targets – Revenue Resilience • Sustainability Relative TSR – 50% weighting Relative TSR is assessed over a three year period from 1 July 2025 to 30 June 2028, relative to other companies in the ASX50 - 150 index (Peer Group Companies). For any performance rights to vest under the TSR vesting condition, Lynas’ performance must be equal to or greater than the 51% percentile of Peer Group Companies. The percentage of the performance rights that may vest is determined as follows: Lynas TSR Ranking across the TSR Period Proportion of Performance Rights that vest Below 51st percentile 0% At the 51st percentile 50% Between the 51st percentile and the 76th percentile Between 50% and 100% as determined on a linear basis (rounded to the nearest 5%) At or above 76th percentile 100% Strategic Target – Revenue Resilience – 40% weighting This strategic target will measure the contribution to Lynas’ EBITDA from new products and new customers. FY25 will be used as a baseline. EBITDA contribution from new customers and/or new products in respect of which there were no sales as at 30 June 2025 will be measured. The vesting scale will be as follows: • 50% vests if EBITDA contribution from new customers and/or new products is greater than or equal to 10%; • 100% will vest if EBITDA contribution from new customers and/or new products is greater than or equal to 15%. Straight line vesting will occur between these thresholds. This Strategic Target was selected because it will measure Lynas’ ability to broaden its portfolio of products and customers. Broadening Lynas’ customer base in its NdPr business and broadening income beyond NdPr sales are key success factors for securing resilient growth. Sustainability – 10% weighting The Sustainability Target is to achieve greater than targeted 70% average renewable energy penetration at Mt Weld. This Sustainability Target has been selected due to the importance of the energy transition to Lynas’ stakeholders. In accordance with the Group’s policy that governs trading of the Company’s shares by Directors and employees, Directors and employees are not permitted to hedge their options or performance rights before the options vest. The performance rights granted during the financial year had a weighted average fair value of $17.48 (FY25: $5.55) and were priced using volume-weighted average share prices, Monte Carlo and Binomial valuation methodologies. Where relevant the expected life used in the model has been adjusted based on management’s best estimate for the effects of non-transferability, exercise restrictions (including the probability of meeting market conditions attached to the option), and behavioural considerations. Expected volatility is based on the historical share price volatility over the past three years and peer volatility.
Page 133
130 Financial Statements www.LynasRareEarths.com Notes to the Financial Statements continued PRs issued to employees other than CEO PRs issued to CEO Series CN Series CO Series CP & CQ Series CR Series CS Series CT & CU Grant date 25 May 2026 25 May 2026 25 May 2026 26 Nov 2025 26 Nov 2025 26 Nov 2025 Fair Value per right $19.00 $17.36 $19.00 $15.00 $12.48 $15.00 Exercise price $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Dividend yield 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% Expected volatility 45% 45% 45% 45% 45% 45% Risk-free Rate 4.6% 4.6% 4.6% 3.9% 3.9% 3.9% Expiry date 31 Aug 2026 31 Aug 2030 31 Aug 2030 31 Aug 2026 31 Aug 2030 31 Aug 2030 Performance rights still to vest or yet to expire Performance rights are issued on the same terms as options, except there is no consideration payable on exercise. The following table lists any performance rights which are still to vest, or have yet to expire. Series Grant date Number Date vested and exercisable Expiry date Exercise price Value per performance right at grant date BW 13-Nov-24 551,167 31-Aug-26 25-Aug-28 $0.00 $4.42 BX 13-Nov-24 440,948 31-Aug-26 25-Aug-28 $0.00 $6.91 BY 13-Nov-24 110,248 31-Aug-26 25-Aug-28 $0.00 $6.91 CA 29-Nov-24 161,263 31-Aug-26 25-Aug-28 $0.00 $3.84 CB 29-Nov-24 129,010 31-Aug-26 25-Aug-28 $0.00 $6.62 CC 29-Nov-24 32,253 24-Aug-25 24-Aug-25 $0.00 $6.62 CF 1-May-25 652,699 30-Jun-27 30-Jun-29 $0.00 $5.55 CG 1-May-25 261,102 30-Jun-27 30-Jun-29 $0.00 $7.61 CH 1-May-25 261,102 30-Jun-27 30-Jun-29 $0.00 $7.61 CI 1-May-25 130,559 30-Jun-27 30-Jun-29 $0.00 $7.61 CJ (AGM) 29-Nov-24 168,545 30-Jun-27 30-Jun-29 $0.00 $4.43 CK (AGM) 29-Nov-24 67,418 30-Jun-27 30-Jun-29 $0.00 $6.87 CL (AGM) 29-Nov-24 67,418 30-Jun-27 30-Jun-29 $0.00 $6.87 CM (AGM) 29-Nov-24 33,709 30-Jun-27 30-Jun-29 $0.00 $6.87 CN 25-May-26 89,618 31-Aug-26 31-Aug-26 $0.00 $19.00 CO 25-May-26 351,525 30-Jun-28 30-Jun-30 $0.00 $17.36 CP 25-May-26 281,242 30-Jun-28 30-Jun-30 $0.00 $19.00 CQ 25-May-26 70,328 30-Jun-28 30-Jun-30 $0.00 $19.00 CR (AGM) 26-Nov-25 21,255 31-Aug-26 31-Aug-26 $0.00 $15.00 CS (AGM) 26-Nov-25 82,096 30-Jun-28 30-Jun-30 $0.00 $12.48 CT (AGM) 26-Nov-25 65,677 30-Jun-28 30-Jun-30 $0.00 $15.00 CU (AGM) 26-Nov-25 16,420 30-Jun-28 30-Jun-30 $0.00 $15.00 Total 4,045,602 E.7 Employee costs and share based payments continued
Page 134
131 Lynas Rare Earths Limited | 2026 Annual Report E.8. Other items New and revised standards and interpretations Standards and Interpretations affecting amounts reported The accounting policies adopted in the preparation of the consolidated financial statements are consistent with those of the previous financial year, except for the adoption of new standards and interpretations effective as of 1 July 2025. Several amendments to accounting standards applies for the first time in the current year. However, the adoption of these new amendments to accounting standards did not have a material impact on the Group’s consolidated financial statements. Standards and Interpretations in issue not yet adopted No Australian Accounting Standards issued but not yet mandatory for the financial year ending 30 June 2026 have been early adopted. The adoption of remaining Australian Accounting Standards issued but not yet mandatory when effective is not expected to have a material impact on the Group consolidated financial statements in future periods, other than AASB 18 Presentation and Disclosure in Financial Statements. AASB 18 will replace AASB 101 Presentation of Financial Statements and retrospective application will be required. Lynas is currently assessing the impact of this upcoming standard on the financial statements. E.9. Subsequent events On 24 July 2025, Lynas announced the signing of a Memorandum of Understanding (MoU) with Korean permanent magnet manufacturer JS Link to develop a sustainable rare earth permanent magnet value chain in Malaysia. Under the terms of the MoU, Lynas will collaborate with JS Link on the development of a 3,000 tonne capacity NdFeB permanent sintered magnet manufacturing facility near the Lynas Malaysia advanced materials plant in Kuantan, Malaysia. Lynas and JS Link will also collaborate in respect of the supply by Lynas of light and heavy rare earth materials to JS Link to support production of NdFeB permanent sintered magnets. The MoU is non-binding and subject to a definitive agreement. On 27 July 2026, Lynas announced it had entered into binding agreements with LS Eco Energy, a subsidiary of LS Cable & System, for the cross-subscription of convertible instruments to the value of approximately AUD 29m each. The convertible instruments each have a 0% interest rate, a maturity date of 5 years, and are convertible into ordinary shares at the election of the holder from 3 years after the date of issue at a conversion price referable to current trading prices. Completion of the issuances of the instruments is subject to customary conditions precedent. CONSOLIDATED ENTITY DISCLOSURE STATEMENT Name of Group entity Entity Type Body Corporate country of incorporation % of share capital held Country of tax residence Lynas Malaysia Sdn Bhd Body Corporate Malaysia 100% Malaysia Lynas Services Pty Ltd Body Corporate Australia 100% Australia Mount Weld Holdings Pty Ltd Body Corporate Australia 100% Australia Mount Weld Mining Pty Ltd Body Corporate Australia 100% Australia Lynas Kalgoorlie Pty Ltd Body Corporate Australia 100% Australia Lynas Africa Holdings Pty Ltd Body Corporate Australia 100% Australia Lynas OpCo Pty Ltd Body Corporate Australia 100% Australia Lynas Africa Ltd Body Corporate Malawi 100% Malawi Lynas USA LLC Body Corporate USA 100% N/A Lynas France SAS Body Corporate France 100% France
Page 135
132 www.LynasRareEarths.com Mineral Resources and Ore Reserves as at 30 June 2026 1. MT WELD RARE EARTH DEPOSIT ORE RESERVES 2026 The Ore Reserve estimation for the Mt Weld Rare Earth Deposit is shown in Table 1, reported above a cut-off grade of 2.8% Total Rare Earth Oxides (TREO). TABLE 1: MT WELD RARE EARTH DEPOSIT ORE RESERVES 2026 JORC CLASSIFICATION MILLION TONNES TREO % CONTAINED REO ‘000 TONNES Ore Reserves within Pit boundary Proved 17.6 7.1 1,250 Probable 10.6 4.5 480 Designed Pit Total 28.2 6.1 1,730 On Stockpiles Proved 1.5 9.3 140 Probable 0.0 0.0 0 Stockpiles Total 1.5 9.3 140 Tailings Proved 1.8 7.3 130 Probable 0.0 0.0 0 Tailings Total 1.8 7.3 130 Total Ore Reserves Proved 20.9 7.3 1,530 Probable 10.6 4.5 480 Total 31.5 6.4 2,010 * TREO = total Rare Earth Oxides (La2O3, CeO2, Pr6O11, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3) + Yttrium (Y2O3). Totals may not balance due to rounding of figures. Note: The Ore Reserves for the Mt Weld Rare Earth Deposit is as of June 30, 2026. The 2026 Ore Reserve update is based upon the 2024 Mineral Resource and Ore Reserve estimate. Full details of the 2024 Mineral Resource and Ore Reserve are reported in the ASX announcement dated August 5, 2024, titled “2024 Mineral Resource and Ore Reserve Updated: Lynas announces a 92% increase in Mineral Resources and a 63% increase in Mt Weld Ore – with a significant increase in contained heavy rare earth mineralisation”. The Company confirms that all material assumptions and technical parameters set out in the 2024 Mineral Resource and Ore Reserve dated August 5, 2024 continue to apply and have not materially changed. The stockpiles were estimated using survey volumes of the stockpiles and grades assigned to the stockpiles by the grade control process. The grade control processes were carried out by experienced Lynas geological staff and reviewed by Lynas competent person, Dr Ganesh Bhat. Tailings were estimated using survey volumes, with grades and bulk density determined by daily sampling by the Lynas metallurgical laboratory on site. Mining dilution and recovery modifying factors have been applied to both the insitu Resource and the Tailings Resource. The volume surveys have been carried out by Mr Bradley Hughes, an employee of Lynas Rare Earths.
Page 136
133 Lynas Rare Earths Limited | 2026 Annual Report MT WELD RARE EARTH DEPOSIT MINERAL RESOURCES 2026 The Mineral Resource estimation for the Mt Weld Rare Earth Deposit is shown in Table 2, reported above a cut-off of 2.5% Total Rare Earth Oxides (TREO). TABLE 2: MT WELD RARE EARTH DEPOSIT MINERAL RESOURCES 2026 JORC CLASSIFICATION MILLION TONNES TREO % CONTAINED REO ‘000 TONNES Insitu Measured 18.9 7.1 1,341 Indicated 15.3 4.3 652 Inferred 71.1 3.2 2,294 Subtotal 105.2 4.1 4,287 On Stockpiles Measured 2.1 8.6 185 Subtotal 2.1 8.6 185 Tailings Measured 1.8 7.6 138 Subtotal 1.8 7.6 138 Total Mineral Resources Measured 22.8 7.3 1,664 Indicated 15.3 4.3 652 Inferred 71.1 3.2 2,294 Total 109.2 4.2 4,610 * TREO = total Rare Earth Oxides (La2O3, CeO2, Pr6O11, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3) + Yttrium (Y2O3). Totals may not balance due to rounding of figures. Mineral Resources have been reported above a cut-off of 2.5% TREO. The Mineral Resources are inclusive of Ore Reserves. Notes: 1. The Mineral Resource estimation for the Mt Weld Rare Earth Deposit is as of June 30, 2026. The company confirms that all material assumptions and technical parameters underpinning the estimated Mineral Resources set out in the ASX announcement dated August 5, 2024 continue to apply and have not materially changed. The exceptions are the inclusion of stockpiled material as a Measured Resource. 2. A positive reconciliation between Resource depletion and actual production is noted resulting in little change in the resource from 2025.
Page 137
134 www.LynasRareEarths.com Mineral Resources and Ore Reserves 3. NIOBIUM RICH RARE METALS MINERAL RESOURCES The Mineral Resource estimation for the niobium rich rare metals prospect referred to as the Niobium Rich Rare Metals Project is shown in Table 3. The Rare Metals Project is located at Mt Weld. TABLE 3: CLASSIFICATION OF MINERAL RESOURCES FOR THE NIOBIUM RICH RARE METALS PROJECT CATEGORY MILLION TONNES Ta2O5 % Nb2O5 % TREO % ZrO % P2O5 % Y2O3 % TiO2 % Measured 0 0 0 0 0 0 0 0 Indicated 1.5 0.037 1.4 1.65 0.32 8.9 0.1 5.8 Inferred 36.2 0.024 1.06 1.14 0.3 7.96 0.09 3.94 Total 37.7 0.024 1.07 1.16 0.3 7.99 0.09 4.01 Notes: 1. All figures are percentages. Ta2O5 Tantalum Oxide, Nb2O5 Niobium Oxide, TREO Total Rare Earth Oxide, ZrO zirconia, P2O5 Phosphate, Y2O3 yttria, TiO2 titanium oxide. 2. The Mineral Resource estimation for the niobium rich rare metals is as per ASX announcement dated October 6, 2004. Lynas Corp confirms that all material assumptions and technical parameters underpinning the estimated Mineral Resources continue to apply and have not materially changed. Figures in the table may not sum due to rounding. There have been no changes to the Niobium Rich Rare Metals Project Mineral Resource since the previous reporting period. Note on governance arrangements and internal controls: All Lynas Mineral Resource estimations are compiled by experienced competent persons. The relevant Competent Person ensures that all aspects of the Mineral Resource estimations or the Ore Reserve estimations (as applicable) meet the JORC code requirements. COMPETENT PERSON’S STATEMENTS – MINERAL RESOURCES The information in this report that relates to the 2026 Mineral Resources is based on, and fairly represents, infor- mation compiled by Dr Ganesh Bhat. Dr Bhat is the Principal Geologist to Lynas Rare Earths. Dr Bhat is a Member of The Australasian Institute of Mining and Metallurgy. Dr. Bhat has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2012 Edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code). Dr Bhat consents to the disclosure of information in this report in the form and context in which it appears. The information in this report that relates to the Niobium Rich Rare Metals Project is based on, and fairly represents, information compiled by Dr Ganesh Bhat. Dr Bhat is the Principal Geologist to Lynas Rare Earths. Dr. Bhat is a Member of The Australasian Institute of Mining and Metallurgy, AUSIMM. Dr. Bhat has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2012 Edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code). Dr. Bhat consents to the disclosure of information in this report in the form and context in which it appears. COMPETENT PERSON’S STATEMENTS – ORE RESERVES The reserves information in this report that relates to the Mt Weld Rare Earths Project is based on, and fairly represents, works carried out by the Lynas Rare Earths mine planning team led by Mr Brett Hampel. Mr Hampel is a Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify him as a Competent Person as defined in accordance with the 2012 Edition of the Australasian Joint Ore Reserves Committee (JORC). Mr Hampel consents to the inclusion in the document of the information in the form and context in which it appears.
Page 138
135 Lynas Rare Earths Limited | 2026 Annual Report Additional Information Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report. The information is current as at 31 July 2026. (a) DISTRIBUTION OF ORDINARY SHARES The number of shareholders by size of holding of ordinary shares is: Holdings Ranges Holders Number of Shares Percentage of Shares 1–1,000 33,133 11,376,566 1.130 1,001–5,000 14,192 34,246,243 3.400 5,001–10,000 3,081 22,441,109 2.230 10,001–100,000 2,267 53,267,997 5.290 100,001 and over 121 885,170,662 87.950 Total 52,794 1,006,502,577 100.000 The number of shareholders holding less than a marketable parcel of shares 829 59,828 (b) DISTRIBUTION OF EMPLOYEE OPTIONS/PERFORMANCE RIGHTS There are 4,020,867 unlisted employee options / performance rights. The number of beneficial holders, by size of holding, of employee options / performance rights are: Holdings Ranges Holders Number of Shares Percentage of Shares 1–1,000 4 2,368 0.060 1,001–5,000 18 47,905 1.190 5,001–10,000 12 97,042 2.410 10,001–100,000 40 1,303,424 32.420 100,001–999,999,999 11 2,570,128 63.920 Total 85 4,020,867 100.000
Page 139
136 www.LynasRareEarths.com Additional Information (c) TWENTY LARGEST SHAREHOLDERS The names of the twenty largest holders of quoted shares are: Listed Ordinary Shares Number of Shares % of Shares 1 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 293,373,663 29.148% 2 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 228,210,242 22.674% 3 CITICORP NOMINEES PTY LIMITED 126,446,175 12.563% 4 UBS NOMINEES PTY LTD 75,000,000 7.452% 5 BNP PARIBAS NOMS PTY LTD 38,200,214 3.795% 6 JAPAN AUSTRALIA RARE EARTHS BV 31,233,027 3.103% 7 BNP PARIBAS NOMINEES PTY LTD <CLEARSTREAM> 20,981,436 2.085% 8 BNP PARIBAS NOMINEES PTY LTD <AGENCY LENDING A/C> 12,859,581 1.278% 9 ARGO INVESTMENTS LIMITED 6,000,000 0.596% 10 BNP PARIBAS NOMINEES PTY LTD <IB AU NOMS RETAILCLIENT> 4,438,584 0.441% 11 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 4,030,292 0.400% 12 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED <NT-COMNWLTH SUPER CORP A/C> 3,574,306 0.355% 13 NETWEALTH INVESTMENTS LIMITED <WRAP SERVICES A/C> 2,699,232 0.268% 14 BNP PARIBAS NOMINEES PTY LTD <HUB24 CUSTODIAL SERV LTD> 2,367,716 0.235% 15 AMANDA LACAZE 2,018,681 0.201% 16 ALBERT & TERESA TING PTY LIMITED 1,951,458 0.194% 17 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 1,881,948 0.187% 18 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA 1,698,407 0.169% 19 BNP PARIBAS NOMS (NZ) LTD 1,530,948 0.152% 20 NETWEALTH INVESTMENTS LIMITED <SUPER SERVICES A/C> 1,311,928 0.130% 859,807,838 85.425% (d) SUBSTANTIAL SHAREHOLDERS The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act 2001 are: Relevant Interest in Listed Ordinary Shares 1 UBS Group AG 98,107,131 2 State Street Corporation 96,082,792 3 Australian Super Pty Ltd 94,292,123 4 Mrs Georgina Hope Rinehart, Hancock Prospecting Pty Ltd and subsidiaries of HPPL1 76,764,078 5 BlackRock Group 66,432,006 1 Ms Bianca Hope Rinehart in her capacity as trustee of the Hope Margaret Hancock Trust filed a notice of change of interests of substantial holder notice on 4 February 2025 in respect of 76,764,078 shares which were the subject of the change of interests of substantial holder notice lodged by Mrs Rinehart, HPPL and subsidiaries of HPPL on 31 January 2025 on the basis that a relevant interest arises by virtue of the operation of section 608(3)(a) of the Corporations Act.
Page 140
137Lynas Rare Earths Limited | 2026 Annual Report Design & Production > APM Graphics Management > 1800 806 930 (e) VOTING RIGHTS All ordinary shares (whether fully paid or not) carry one vote per share without restriction. No other class of equity securities carries voting rights unless converted into ordinary shares. (f) SCHEDULE OF INTERESTS IN MINING TENEMENTS Tenement Percentage Held Mt Weld Rare Earths Project Mt Weld M38/58 100 Mt Weld M38/59 100 Mt Weld M38/326 100 Mt Weld M38/327 100 Mt Weld G38/36 100 Mt Weld G38/37 100 Mt Weld G38/40 100 Mt Weld L38/98 100 Mt Weld L38/224 100 Mt Weld L38/327 100 Mt Weld L38/361 100 Mt Weld L38/362 100 Mt Weld L38/363 100 Mt Weld L38/378 100 Mt Weld E38/2224 100 Lynas Kalgoorlie Rare Earths Processing Facility Kalgoorlie G26/169 100
Page 141
CORPORATE DIRECTORY ABN 27 009 066 648 Directors John Humphrey John Beevers Kathleen Bozanic Philippe Etienne Vanessa Guthrie Grant Murdoch Company Secretary Sarah Leonard Registered Office Level 4, 1 Howard St Perth WA 6000 p +61 8 6241 3800 e general@lynasre.com Share Register Boardroom Pty Ltd Level 8, 210 George Street Sydney NSW 2000 p 1300 737 760 (in Australia) p +61 2 9290 9600 (International) e enquiries@boardroomlimited.com.au Auditors Ernst & Young 9 The Esplanade Perth WA 6000 w LynasRareEarths.comw LynasRareEarths.com