Lynas share price plunges 17.3%

Lynas Corporation Ltd (ASX: LYC) saw its share heavily sold off this afternoon, despite no news from the company

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The share price of Lynas Corporation Ltd (ASX: LYC) fell 17.3% today to 9.1 cents, despite no news from the company.

Trading volumes were large with more than 70 million shares changing hands.

Lynas is the only rare earths producer outside of China now, following the closure of Molycorp's Mountain Pass mine after it fell into bankruptcy. China accounts for roughly 95% of world production of rare earths and has an estimated 60% of the world's reserves. Demand for rare earths is increasing, as they are used in everything from magnets, turbine generators, smartphones and solar panels.

Unfortunately for Lynas shareholders, it seems a large investor appears to be selling out.

Here's the sorry story in one picture…

Lynas share price 15 Dec 2015
Source: Yahoo Finance

Foolish takeaway 

Lynas' share price is likely to remain volatile until the company can prove it has a sustainable, profitable business and can meet its debt payments.

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. 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 Bruce Jackson.

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