Article courtesy of The Northern Miner
05.06.2025
Shares of Lynas Rare Earths (ASX: LYC) soared nearly 13% on Thursday to their strongest level in more than two years amid concerns over China’s export controls on rare earth elements.
As the largest rare earth producer outside China, Lynas is poised to benefit from the global scramble for alternative suppliers. Shares in the Perth, Australia-based company closed at A$9.26 (C$8.24) apiece in Sydney, the highest since February 2023, for a market cap of A$8.66 billion.
China, which produces around 90% of the world’s rare earths, in April imposed export restrictions on rare earth magnets and related materials, disrupting supply chains worldwide. The export curbs are part of China’s broader strategy amid ongoing trade tensions with the United States.
Major automakers, including BMW, Mercedes-Benz and Ford, have reported production challenges due to the shortages. BMW said that part of its supplier network was disrupted but its own plants were running as normal. Some European auto parts plants have suspended output, and industry groups warn of further disruptions if the situation persists.
Export licences
Only a quarter of “hundreds of requests” from auto suppliers since early April for China export licenses been granted so far, according to BMO Capital Markets on Thursday, citing Europe’s auto supplier association CLEPA, a French acronym.
Suzuki suspended production of its Swift car, according to Reuters. Also, China has introduced a tracking system for its rare earth magnet sector which requires producers to submit extra information to the government including trading volumes and client names, the news wire said.
Mercedes-Benz is seeking “buffers” with suppliers such as stockpiles to protect against potential threats, the company’s production chief Joerg Burzer told Reuters. So far, the shortage hasn’t affected the automaker, he said.
Lynas, backed by Australian mining magnate Gina Rinehart, has secured additional feedstock for its advanced materials plant in Malaysia, the company said this week. The plant has been producing separated rare earth materials since 2012 using mixed rare earth carbonate shipped from its Mt Weld mine in Australia.