Lynas Rare Earths Already Among the Winners
Exports of so-called Rare Earths from China have come to a virtual standstill. Following recent new restrictions on the export of these critical materials imposed during the trade dispute with the USA, producers are now struggling with new, stricter approval procedures.
According to media reports, it could take weeks to clear these delays, as numerous questions remain unanswered. Consequently, the affected companies are doing everything to obtain approval for their export applications as quickly as possible, but sources from miningweekly.com suggest this could take up to 45 working days.
The government of the People’s Republic had placed seven – from a list of 17 – Rare Earths on the list of controlled exports, in response to the tariffs imposed by US President Trump. This move could lead to disruptions in global supply chains, as China dominates the market, especially for processed Rare Earths.
These raw materials, which are not actually that rare, are crucial in the production of countless high-tech products. Observers expect that some buyers outside China could face a tight supply and, as a result, production constraints.
Indeed, there might be some truth to this, as in the last two years, exports of other critical minerals such as antimony, gallium, or germanium, which were subject to export restrictions, initially dropped to zero for months until export companies received their new permits.
Australian Rare Earth Producer Lynas Benefits
Given this situation, it’s no wonder that the Australian Lynas Rare Earths (WKN 871899 / ASX LYC) is one of the very few companies in the S&P/ASX 200 Index that has actually been able to record price gains since US President Trump imposed his so-called reciprocal tariffs!
The company, whose Mt. Weld mine is located in Australia while the processing plant was built in Malaysia, is one of the few producers and processors of Rare Earths outside China. Other producers outside China also have to send their material to the People’s Republic for processing. Until last Friday, the Lynas share price gained value every day except Tuesday.
