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Here’s why the Lynas share price is up 7% today

The Lynas Corporation Ltd (ASX: LYC) share price has surged by a massive 7.35% so far today and is currently trading at $2.26 per share (at the time of writing).

The rare earths producer’s share price has been quite volatile over the past 12 months, but has still gone up an impressive 37% over that period. Lynas has also had a great run on the ASX over the past 5 years, increasing by more than 400% during that time.

Lynas responds to media speculation

Lynas’ sharp increase today follows speculation on the Malaysiakini news website relating to the renewal of Lynas’ Malaysian operating licence on 5 February. Initially, the company’s share price dropped sharply following the announcement, however today Lynas responded to the speculation, advising that it hasn’t received notification of such a renewal. The company has submitted its licence renewal documentation to the Malaysian Atomic Energy Licensing Board, however continues to await the regulator’s decision.

Major Project Status awarded by Federal Government

Lynas’ share price also appears to be gaining some momentum again following a major award given to the rare earth producer by the Australian government.

Back on 3 February, Lynas Corporation was awarded ‘Major Project Status’ by the Australian Government to establish its new rare earths processing plant in Kalgoorlie, Western Australia. ‘Major Project Status’ formally recognises the strategic significance of Lynas’ project to the Australian economy. Lynas will also seek the support of government and commercial partners in local infrastructure development.

The new project will also serve as a foundation for the development of infrastructure in Kalgoorlie, including utilities and the production of chemicals used in minerals processing beyond the rare earths industry. This new project aligns with key government policies, including regional development, value-added processing and infrastructure development. The project also supports the Australian Government’s Critical Minerals Strategy.

The Lynas Kalgoorlie plant will process rare earth concentrate from Lynas’ Mt Weld mine, which is also located in Western Australia’s Goldfields region. Lynas will also explore opportunities for additional processing in Kalgoorlie. During peak construction, the plant is expected to create up to 500 jobs and increase Lynas’ workforce in the Goldfields to over 200 people. This project had also been awarded ‘Lead Agency’ status by the Western Australian government back in December.

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Motley Fool contributor Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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