Lynas share price lifts 10% on signing of US Department of Defense contract

The Lynas Corporation Ltd (ASX: LYC) share price has flown today, up 10% on news the company has signed a major contract with the US Department of Defense.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Lynas Corporation Ltd (ASX: LYC) share price is up by 10.14% at the time of writing, after the company signed a deal with the United States (US) Department of Defense (DoD) for a phase 1 heavy rare earth separation facility.

April announcement

This follows an announcement in April that the US DoD intended to award Lynas the phase 1 contract.

Lynas CEO Amanda Lacaze said at the time the deal created the foundation for a facility that would help the US "avoid the supply chain vulnerability that has been exposed over the past year". 

As a result, it reflected the US desire to diversify its geographic supply of rare earth materials.

Heavy rare earth facility

Lynas and its US partner Blue Line will undertake a strategy study plus planning and design for the construction of a heavy rare earth separation facility – the only source of separated heavy rare earths outside China.

Completion of this work is expected within the 2021 financial year.

Lynas will process the materials sourced from Lynas mine in Mt Weld, Western Australia.

"We are very pleased to have signed a contract with the DoD for this Phase I work," Ms Lacaze said today.

"Heavy Rare Earths are essential for the high performance magnets used in electric motors, and Lynas has the feedstock, intellectual property, and track record to deliver a Heavy Rare Earths facility in a timely and low-risk manner. We look forward to working with the DoD to progress this project," she added.

About the Lynas share price

Lynas Corporation is the world's second largest producer of rare earths and only significant producer outside China. Rare earths are an essential component of digital age technologies and green technologies such as electric vehicles and wind turbines. 

The company's assets include its Mt Weld mine, Mt Weld Concentration Plant and a manufacturing facility in Malaysia. According to Lynas, Mt Weld is recognised as one of the highest grade rare earths mine in the world.

Lynas shares reacted positively to today's developments, rising by 10.14% to $2.39 per share at the time of writing. However, the Lynas share price is still 10.15% down on this time last year.

Motley Fool contributor Matthew Donald has no position in any of the stocks mentioned. 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 Scott Phillips.

More on Share Market News

A man looking at his laptop and thinking.
Share Market News

5 things to watch on the ASX 200 on Friday

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) went into the Christmas break with a small gain. The benchmark index rose 0.25%…

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Broker Notes

Invest $1,000 into Pilbara Minerals and these ASX 200 stocks

Analysts have named these shares as top picks for a $1,000 investment. Let's see why.

Read more »

Happy young couple saving money in piggy bank.
Opinions

Want to start investing in ASX shares? Here's what I'd buy

This is where I’d begin to put my money in the stock market.

Read more »

A female ASX investor looks through a magnifying glass that enlarges her eye and holds her hand to her face with her mouth open as if looking at something of great interest or surprise.
Broker Notes

3 of the best ASX 200 shares to buy in 2025

Let's see why analysts at Bell Potter are bullish on these shares next year.

Read more »

People of different ethnicities in a room taking a big selfie, symbolising diversification.
Opinions

Want diversification? Get it instantly with these ASX 200 shares

Some businesses offer a lot more diversification than others.

Read more »

A happy man and woman on a computer at Christmas, indicating a positive trend for retail shares.
Opinions

2 ASX 200 shares I'd want to receive as a present today

Merry Christmas! Are there any stocks under your tree?

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why Avita Medical, GenusPlus, Mesoblast, and Polynovo shares are storming higher

These shares are having a better day than most today. But why?

Read more »

Three guys in shirts and ties give the thumbs down.
Share Fallers

Why Charter Hall Retail, DroneShield, FBR, and St Barbara shares are tumbling today

These shares are having a tough time on Tuesday. But why?

Read more »