Lynas Rare Earths (ASX: LYC; WKN: 871899) made an interesting point in the debate about critical raw materials in connection with the presentation of its figures for the second quarter (to December 31): According to CEO Amanda Lacaze, government measures relating to price floors have improved the functioning of the rare earths market and helped to raise prices to a more sustainable level.
The statements come at a time when governments worldwide are striving to diversify supply chains for strategic materials and make them less dependent on China. Rare earths are needed in numerous applications – from infrastructure for the energy transition and electric vehicles to smartphones and defense technology. Lynas is considered the largest producer of rare earths outside China, thus providing a relevant perspective on market mechanics and pricing.
Lynas Rare Earths: Price floors as political intervention in market mechanics
At its core, the issue is how producers outside China can survive in a global market where Chinese suppliers often exert price leadership due to cost and structural advantages. Lacaze emphasized that, from Lynas’s point of view, it is less about states buying the products themselves. What is crucial, she said, is that customers buy rare earths at prices that reflect the actual costs of reliable production and processing.
In this context, the CEO referred to US policy, which addresses minimum prices or supporting price mechanisms for the producer MP Materials. In addition, there are discussions about possible price floors between governments – including Australia and the Group of Seven leading industrial nations (G7). Such political guardrails could – according to this interpretation – help to secure investments in non-Chinese supply chains if price volatility or very low market prices make economic planning difficult.
Another factor addressed by Lynas concerns China itself: According to Lacaze, a relaxation of Chinese export controls has helped to reduce surpluses there. This, in turn, has supported the reference price formed in China, which Lynas uses as a basis for some of its sales. Overall, the market environment is, in her view, still positive – and in some respects has even become “more positive” in January.
Sales increase despite production slump
Operationally, Lynas Rare Earths reported sales of AUD 201.9 million for the quarter to December 31, compared to AUD 141.2 million in the same period last year – an increase of 43%. According to the report, the main drivers were higher realized selling prices, which more than compensated for a production slump. The stock reacted with a price increase on the day of the report.
Accordingly, the average selling price across the product portfolio was AUD 85.60 per kilogram (converted to US$57.69/kg), significantly above the level of the same quarter last year (AUD 49.20/kg). At the same time, the production of rare earth oxides fell to 2,382 tonnes, after 3,993 tonnes had been achieved in the previous quarter.
Lynas cites ongoing power problems at the Kalgoorlie site in Western Australia as the main cause. An intermediate product (Mixed Rare Earth Carbonate, MREC) is produced there, which is further processed into high-purity rare earth oxides in later process steps. The company had already pointed to increasing supply interruptions in the previous year; failures in November had caused noticeable losses in MREC production.
Looking ahead: Power supply and upcoming change in leadership
According to its own information, Lynas Rare Earths is working on “off-grid” solutions to stabilize the power supply at the site – including the examination of options based on diesel. Lacaze said that while some problems had been resolved, the interruptions continued; even “yesterday” there had been two major outages. For a company that positions itself as a reliable supplier in politically desirable, non-Chinese supply chains, the technical stability of the process chain remains a central issue.
US President Donald Trump personally draws attention to bottleneck in rare earth processing
Lynas is not only the largest rare earth producer outside China, but also currently the only one. The biggest problem is not so much the extraction of the not-so-rare raw materials, but above all their processing into a usable product.
Which is exactly what US President Donald Trump explained in front of running cameras just recently (January 20, 2026). “We’re going to have so much rare earths. It’s actually not that rare. Getting it processed is rare, but there’s a lot of rare earth.” was the exact quote!
Good prospects for the Canadian Ucore Rare Metals (WKN A2QJQ4 / TSXV UCU), which has a better – faster, more energy- and cost-efficient – method for producing rare earth metals called RapidSX. The company is already working on commissioning a commercial production facility in the US state of Louisiana!
Namely with the support of both the authorities of Louisiana and the federal authorities. In total, Ucore has already received more than USD 22 million in funding and intends to commission a first production line in mid-2026! The stock is already one of the best performers on Goldinvest.de and has gained around 1,048% in value in the last 12 months! We are extremely excited to see how things develop…
