Lynas (ASX: LYC) share price boosted 5% by PM's budget plan

The Lynas share price received a boost today following the release of a pre-budget speech by the Prime Minister. We take a closer look.

| More on:
A mining worker wearing a hard hat, orange high vis vest and blue long-sleeved shirt raises his fists in celebration with an excited expression on his face

Image source: Getty Images

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 was up by 4.74% at the time of writing to $2.43. The rise in the Lynas share price came following media reports that Australia's Prime Minister, Mr Scott Morrison, has promised to include stimulus for critical minerals processing in the coming budget.

What has been reported?

According to media reports, the Prime Minister will give an address at the Press Club in Canberra today that will outline a plan to boost the economy through stimulus for the manufacturing industry. Of the six key areas identified to receive government help, critical mineral processing was included.

The stimulus will be up to $1.6 billion in the form of grants. Additionally, the Prime Minister hinted toward more favourable industrial relations for manufacturers, coordination between different levels of government and assistance from the scientific and research community. 

All of these policies will be good news for the Lynas share price, with the company planning to build a rare earth processing centre in Western Australia.

In his pre-released speech, the Prime Minister outlined that his strategy has three main elements, all of which are relevant to Lynas. The elements include making manufacturers more competitive through a more favourable business environment, building scale in areas of competitive strength and securing sovereign capability in areas that are of national interest. Lynas could benefit from more favourable regulation. Additionally, rare earth production by Lynas is of importance to Australia's national interest and it will be likely to benefit from the government's ambition to create sovereign capability in critical mineral production.

Although the Prime Minister did not name any companies specifically, his speech seemed to target rare earth processing among a few other vital industries, which could explain the boost to the Lynas share price today.

About the Lynas share price

Lynas is a rare earths miner and processor with assets in Australia and Malaysia. It also has plans to build a processing plant in the United States. The company has been listed on the ASX since 1986.

Recently, Lynas raised capital through an institutional placement, an institutional rights issue and an underwritten retail entitlement offer, raising $425 million at $2.30 per share. 

Lynas had earnings before interest, tax, depreciation and amortisation (EBITDA) of $59.8 million in the 2020 financial year. This figure was affected by production halts due to COVID-19.

The Lynas share price is up 318.97% since its 52-week low of 58 cents, it has risen by 6.11% since the beginning of the year. 

Should you invest $1,000 in Bhp Group right now?

Before you buy Bhp Group shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Bhp Group wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Chris Chitty 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

Happy woman holding white house model in hand and pointing to it with a pen.
Share Market News

Domain shareholders rejoice after CoStar snaps it up for a large premium

It's a good week to be a Domain shareholder.

Read more »

Smiling man with phone in wheelchair watching stocks and trends on computer
Share Market News

5 things to watch on the ASX 200 on Monday

A decent start to the week is expected for Aussie investors.

Read more »

A man in a blue collared shirt sits at his desk doing a single fist pump as he watches the Appen share price rise on his laptop
Broker Notes

These ASX 200 stocks could rise 30% to 40%

Analysts are tipping these shares to go to the moon. Let's find out why.

Read more »

A man and woman dance back to back as they cook in kitchen.
Share Market News

ASX 200 'safe-haven' shares delivered divergent performances last week

ASX 200 utilities shares lifted while healthcare shares tanked last week.

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

A businessman hugs his computer and smiles.
Opinions

2 ASX 300 shares I plan to own forever

Both of these businesses have good ultra-long-term outlooks.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Share Market News

$10,000 invested in the ASX 200 5 years ago is now worth…

Guess how much $10,000 invested in the ASX 200 five years ago is worth today!

Read more »

Retired couple hugging and laughing.
Share Market News

Eyeing retirement: Do you really need $1 million?

AustralianSuper recently weighed in.

Read more »