The Lynas Rare Earths Ltd (ASX: LYC) share price finished off at $6.11 today having powered up over 13% to reach its highest price since May 2013.
Lynas has a portfolio of aligned assets to explore, develop, mine and process rare earth minerals. Its main asset is the Mt Weld rare earth deposit in Western Australia.
So what sent the Lynas share price to the sky today?
Lynas share price soars as China fights with the US
According to the Australian Financial Review (AFR), China wants to curb the exports of rare earth minerals that are crucial to US defence contractors such as Lockheed Martin Corp.
These rare minerals are used to manufacture sophisticated weaponry and F-35 fighter jets. Fighter jets, for example, rely heavily on rare earths for critical components such as electrical power systems and magnets.
According to the AFR, a Congressional Research Service report said each F-35 required 417 kilograms of rare earth materials.
China has been setting rare earth production limits since 2007 and currently controls about 80% of the world's supply.
Lynas steps in to accommodate US Defense Department
Last month, Lynas was awarded $30 million in funding from the US Department of Defense to build a light rare earths facility in Texas.
Outside of China, Lynas is the only other major rare earths producer.
Considering the Lynas share price movement today, perhaps the market believes that China will restrict future supplies?
In the instance that China decides to do exactly that, Lynas will be one of the only contenders capable of picking up the slack.
Foolish takeaway
Rare earth minerals don't just build military gear, they are also used to manufacture many other products such as smartphones, electric vehicles and wind turbines.
Regardless of today's China news, the Lynas share price had already been rising for the past year off the back of increasing demand. Lynas shares have gained 182% over the past 12 months.
Over the past month, the Lynas share price is up 38%.
