- LYC owns a portfolio of integrated assets to explore, mine, and process rare earth minerals.
- Lynas holds one of the world's highest-grade rare-earth mines at Mt Weld in WA.
- China is using quotas to prevent the strategic material used in almost everything ranging from mobile phones to electric vehicles.
The Australian rare-earths mining company Lynas Rare Earths (ASX:LYC) share price has been on fire in the current year.
The shares of the S&P/ASX 200 company surged as much as 134.19% in the last year, with 27.95% gains coming in the last month alone. LYC shares last traded at AU$9.100 as of Thursday at 1:08 PM AEDT.
What’s fueling the share prices?
To understand the reason behind the dramatic surge in the share prices, let us begin with an overview of the operations of the company. Lynas is the second-largest producer of separate rare earth (RE) materials in the world..
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The company owns a portfolio of integrated assets to explore, mine, and process RE minerals. Lynas holds one of the world's highest-grade rare-earth mines at Mt Weld along with a concentration plant. In addition to this, the rare-earth mining company also owns a state-of-the-art manufacturing facility to separate and process Rare Earth materials in Malaysia. The company focuses on the entire life cycle of rare earths ranging from mining to customer delivery.
Relevant Article: What powered Lynas Rare Earth (ASX:LYC) to boost its FY21 net profit
The share prices of Lynas have been on fire due to the surge in rare earths prices amid tight supplies. The prices of Neodymium, one of the 17 rare earth elements used for permanent magnets, are currently trading at an all-time-high level of CNY1,045,000 per tonne. Prices have increased nearly 65% in the last one year.
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A domestic shortage of rare earths is approaching in China that accounts for nearly three-fourth of global production. The country is using quotas to prevent the strategic material used in almost everything ranging from mobile phones to electric vehicles.
The power shortage in the country has additionally disrupted the supply chain while swelling commodity prices increased production costs too.
The shares of Lynas Rare Earths (ASX:LYC) have witnessed impressive growth in the last few years amid soaring demand for rare earths in low carbon-emitting solutions.