The share prices of Australian rare earths companies look set to continue to test record levels following news that China has again tightened export controls on the commodities which are vital for defence and clean energy applications.
As reported by Reuters, China on Thursday significantly expanded its controls on rare earth exports, adding five new elements to its restricted list ahead of talks between US President Donald Trump and China's President Xi Jinping.
China controls about 70% of the global trade in rare earths, and the US has been focused on reducing its reliance on China and building up its own sovereign supply chains.
The increased controls on rare earths come as the trade war between the two countries intensifies, with Reuters reporting earlier in the week that US lawmakers were calling for tighter export controls on computer chips to China.
Exports of 12 of the 17 rare earth elements are now restricted by China.
Image source: Getty Images
Australian firms in the box seat
ASX-listed rare earths companies have benefited from the increasing focus on rare earths at a global level, with the value of Lynas Rare Earths Ltd (ASX: LYC) soaring past $20 billion on Thursday.
Lynas shares hit a new 12-month high of $20.75 on Thursday before closing at $20.59, valuing the company at $20.7 billion – more than three times its value earlier in the past year.
And shares in Brazilian Rare Earths Ltd (ASX: BRE) hit a new record high of $5.05 this week, while Arafura Rare Earths Ltd (ASX: ARU) shares hit a high for the past 12 months of 31.5 cents this week.
Deal flow adding to interest
Both Lynas and Brazilian Rare Earths also benefited from positive news flow during the week.
Lynas on Thursday announced it had struck an agreement with US company Noveon Magnetics, with which it would collaborate on setting up a scalable rare earth magnets supply chain in the US.
Noveon, Lynas said in a statement to the ASX, is a "high-performance rare earth magnet manufacturer" supplying magnets for use in electric vehicles, wind turbines, robots, pumps, "and an array of military systems".
The companies said they had committed to finalising a "definitive agreement" and would work closely with customers and the US government to ensure supply continuity for critical applications.
Meanwhile, Brazilian Rare Earths said in a statement to the ASX on Thursday that it had struck a 10-year sales deal with French company Carester.
Under the deal, Brazilian Rare Earths will supply heavy rare earth feedstocks to Carester for an initial 10-year term, with the French company buying up to 150,000 tonnes per year of dysprosium and terbium.
Carester, which is backed by the French Government and Japanese investor partners, is currently building one of the world's largest heavy rare earth separation and recycling plants in Lacq, France.
