Shares in Lynas Corp rose 10% yesterday to a new multi-month high of $2.53 after the company withdrew reserves data given in Tuesday’s investor day presentation.
The shares settled up 7% at $2.43.
Lynas shares were suspended late in the session Tuesday after the ASX queried the basis for the reserves figures given for the Mount Weld operation in Western Australia.
It withdrew forecasts saying it has 3 million tonnes of rare earth deposits and 1.7 million tonnes of rare earth ore reserves at Mt Weld.
“Those figures were described as “opportunities” for the future and they are not relied on in the presentation of the Lynas 2025 project.
“Accordingly, those figures are not material. In any event, those figures were not intended to be read as mineral resource or ore reserve figures and accordingly they should not be relied on and are withdrawn,” the company said in its ASX release on Wednesday.
Lynas Corporation has tried to dampen rising market speculation of a surge in rare earths prices after China’s President Xi Jinping raised fears about cutting off supply to the United States amid the trade war between the two countries.
Lynas managing director Amanda Lacaze said she would not read too much into the President’s decision to visit a rare earths processing plant in Inner Mongolia in northern China following the US trade sanctions.
This was speculation that any Chinese ban on the supply of rare earths materials, which are increasingly important in electric vehicles and in military applications, could see a repeat of 2009 when prices skyrocketed after Beijing cut off supply to Japan.
China has lifted tariffs on imports of rare earths ore from the US to 25%, adding to their costs. it was part of the country’s retaliation against Donald Trump’s move to impose 25% tariffs on hundreds of billions of dollars of imports from China.
Other analysts though pointed out that the Chinese understand its domination of the market is now threatened by Lynas now a global force, and has active plans in the US and India to start new projects.
Lynas revealed on Tuesday that it had abandoned plans to continue accumulating low-level radioactive waste at its $1 billion Kuantan rare earths processing hub in Malaysia after objections from the country’s government took a serious turn earlier this year with suggestions the company’s entire operation in the country might be at risk.
All the speculation about Lynas’ new projects in the US and Australia, the moves in China and speculation on the ASX has pushed Lynas share price well above the $2.25 ‘offer’ price from Wesfarmers.
