Rare earths producer Lynas Corporation Limited (ASX: LYC) has seen its shares climb more than 8.8% to 14.7 cents in afternoon trade, despite no company news.
By comparison, the S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) is up just 0.4%.
Much of the rise may well be due to an interview with Edison Investment Research's Tom Hayes. Mr Hayes, speaking to The Mining Report, says China's State Reserve Bureau intends to begin stockpiling medium-to-heavy rare earth elements (REEs), and that China will start to strengthen REE export quotes.
That is likely to lead to higher rare earth prices, and a race to get project currently under development into production. Mr Hayes says industry consensus expects annual growth in demand for REEs to grow annually by anything from 3-8% until 2020. There are only 2 rare earths mines in operation globally outside of China, according to mining-technology.com, with Lynas' being one of them. The other is Molycorp's Californian mine.
Mr Hayes has also singled out Alkane Resources Ltd (ASX: ALK), which has a Zirconia project in Dubbo, NSW. Alkane is expected to produce niobium and heavy rare earth oxides as a secondary product.
Mr Hayes says demand for REEs, particularly in green technologies such as wind turbines is growing, as government support for renewable energy sources drives further development of wind farms, and hence the metals used in those projects.
Recently, lithium, graphite, nickel and bauxite (used to make aluminium) miners have been in the spotlight, with shares in graphite miner Syrah Resources Ltd (ASX: SYR) up 50% in the last month alone. Graphite is used heavily in lithium-ion batteries for products such as electric vehicles.
Shareholders in Lynas will be hoping this is a sign of things to come for the embattled rare earths producer.
