Lynas share price lifts 10% on signing of US Department of Defense contract

The Lynas Corporation Ltd (ASX: LYC) share price has flown today, up 10% on news the company has signed a major contract with the US Department of Defense.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Lynas Corporation Ltd (ASX: LYC) share price is up by 10.14% at the time of writing, after the company signed a deal with the United States (US) Department of Defense (DoD) for a phase 1 heavy rare earth separation facility.

April announcement

This follows an announcement in April that the US DoD intended to award Lynas the phase 1 contract.

Lynas CEO Amanda Lacaze said at the time the deal created the foundation for a facility that would help the US "avoid the supply chain vulnerability that has been exposed over the past year". 

As a result, it reflected the US desire to diversify its geographic supply of rare earth materials.

Heavy rare earth facility

Lynas and its US partner Blue Line will undertake a strategy study plus planning and design for the construction of a heavy rare earth separation facility – the only source of separated heavy rare earths outside China.

Completion of this work is expected within the 2021 financial year.

Lynas will process the materials sourced from Lynas mine in Mt Weld, Western Australia.

"We are very pleased to have signed a contract with the DoD for this Phase I work," Ms Lacaze said today.

"Heavy Rare Earths are essential for the high performance magnets used in electric motors, and Lynas has the feedstock, intellectual property, and track record to deliver a Heavy Rare Earths facility in a timely and low-risk manner. We look forward to working with the DoD to progress this project," she added.

About the Lynas share price

Lynas Corporation is the world's second largest producer of rare earths and only significant producer outside China. Rare earths are an essential component of digital age technologies and green technologies such as electric vehicles and wind turbines. 

The company's assets include its Mt Weld mine, Mt Weld Concentration Plant and a manufacturing facility in Malaysia. According to Lynas, Mt Weld is recognised as one of the highest grade rare earths mine in the world.

Lynas shares reacted positively to today's developments, rising by 10.14% to $2.39 per share at the time of writing. However, the Lynas share price is still 10.15% down on this time last year.

Motley Fool contributor Matthew Donald 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.

More on Share Market News

a man in a business suite throws his arms open wide above his head and raises his face with his mouth open in celebration in front of a background of an illuminated board tracking stock market movements.
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

An oil worker in front of a pumpjack using a tablet.
Share Market News

ASX 200 energy shares lead the market as oil and uranium prices spike

Brent and WTI crude oil prices are on track for their best month of price growth since July 2023.

Read more »

Business people discussing project on digital tablet.
Broker Notes

Buy, hold, sell: BHP, DroneShield, and Santos shares

How do brokers rate these popular shares? Let's find out.

Read more »

Australian dollar notes and coins in a till.
Opinions

Where I'd invest in ASX shares if the RBA increases the interest rate

Here’s where I’d look for opportunities if the RBA rate rises.

Read more »

A man holds his head in his hands after seeing bad news on his laptop screen.
Share Gainers

These were the worst-performing ASX 200 shares in January

Investors were selling off these shares in January. But why?

Read more »

The letters ETF with a man pointing at it.
ETFs

2 ASX ETFs I'd buy amid the AI sell-off

These funds look like great buys today.

Read more »

A man in a hard hat and high visibility vest speaks on his mobile phone in front of a digging machine with a heavy dump truck vehicle also visible in the background.
Share Market News

Zimplats quarterly earnings: production up, costs down, projects on track

Zimplats posted higher 6E production and stable costs in its latest quarterly earnings report, with projects proceeding as planned.

Read more »

Three miners stand together at a mine site studying documents with equipment in the background
Share Market News

Deterra Royalties posts higher Q2 revenue as MAC iron ore shines

Deterra Royalties lifted December quarter earnings as MAC iron ore royalties rose and its Thacker Pass lithium project advanced.

Read more »