LYC, ILU, HAS: 3 ASX rare earth stocks which can cash in on high demand

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Highlights

  • Rare earth materials are required to produce products such as electric cars, mobile phones and superconductors. 
  • Russia and Ukraine are significant suppliers of several such elements.
  • Now, with Russia attacking Ukraine, concerns have shot up regarding supply shortages.

Rare earth materials are needed to produce a range of important products, including high-tech computing, defence applications, microchips, lasers, glass, magnetic materials, electric cars, mobile phones and superconductors. 

Ukraine is a significant supplier of several rare earth materials such as semiconductor-grade neon used in semiconductor manufacturing. Russia, too, is a key producer of palladium, which is used in many memory and sensor chips.

Now, with Russia attacking Ukraine, concerns have shot up regarding supply shortages and further price hikes of semiconductors.

Here we look at three ASX-listed rare earth stocks which can cash in on high global demand. The stocks have been arranged in decreasing order of their market capitalisation (m-cap).

Lynas Rare Earths Ltd (ASX:LYC)

Lynas Rare Earths has an m-cap of AU$8.07 billion, as of 1:30 PM (AEST). It’s the only significant producer of rare earth materials outside of China, which caters to supplies over 50% of the world’s requirements. It reflects Lynas’ strategic importance.

The stock was trading at AU$9.48, up 5.98%. The share price is up over 67% in the past year.

The Australian mining company achieved a revenue of AU$314.8 million, an increase of 55% from AU$202.5 million for the period ending 31 December 2021. The company's net profit after tax (NPAT) rose by a massive 286% to AU$156.9 million.

Iluka Resources Ltd (ASX:ILU)

Iluka Resources has an m-cap of AU$4.46 billion. It is a major producer of Zircon globally and a large producer of high-grade titanium dioxide products rutile and synthetic rutile. 

The stock was trading at AU$10.22, down 3.22%. The share price is up over 35% in the past year. In 2021, the company's underlying net profits rose 108% while its mineral sands revenue surged by 57%.

In 2022, Iluka expects to produce 280 kilotons of zircon – 40 kilotons less than in 2021, 230 kilotons of synthetic rutile – 31 kilotons more than in 2021 and 65 kilotons of rutile – 2 kilotons less than in 2021.

Hastings Technology Metals Ltd (ASX:HAS)

Hastings Technology Metals has an m-cap of AU$478.11 billion. The company’s Yangibana Project hosts rare earths deposits rich in praseodymium and neodymium.

The stock was trading at AU$0.27, down 1.8%. The share price is up over 25% in the past year.

The rare earth explorer recently secured approval for a AU$140-million loan facility with a 12½-year tenor from Northern Australia Infrastructure Facility (NAIF).  Yangibana is the first Australian rare earths project to receive the NAIF funding. 

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