The Lynas Rare Earths Ltd (ASX: LYC) share price is in the red year to date but has surged more than 11% in the past month.
Lynas shares are currently swapping hands at $9.72, a 5.17% fall on yesterday's closing price. In comparison, the S&P/ASX 200 Index (ASX: XJO) is also down 0.7% today.
So what does the future look like for Lynas?
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Rare earths producer
Lynas is the only major producer of separated rare earths outside of China. The company's Mt Weld mine in Western Australia is one of the highest grade rare earth deposits in the world, according to the company. Lynas also operates a rare earth processing plant in Malaysia. These materials are then exported to Asia, Europe, and the United States.
Red Leaf Securities chief executive John Athanasiou recently told my Foolish colleague Tony if the market closed tomorrow he would want to hold Lynas given its "global strategic importance".
He explained:
Rare earth materials are required for all sorts of things that we consume on a daily basis — from electric cars, mobile phones to superconductors. And the western world really wants a producer outside of China, so it enhances strategic importance.
They announced recent record sales revenue of, I think, $202 million dollars. And that's despite supply chain [issues], which we think will be resolved fairly soon. So there's even more upside to them. So I think if you hold Lynas now, you'll be happy in four years' time.
Speaking at the Australian Financial Review Business Summit in Sydney recently, Lynas CEO Amanda Lacaze said when she first joined Lynas her vision was to return to the ASX 100 and now the company is "knocking on the door of the 50".
Lacaze, asked where she sees the company in 2050, said:
We have a 25-year mine life, right? We are exploring now so we can extend that mine life because we want to increase our production. Australia as a whole, we should be able to be very successful in this area. Because we do have this wonderful mineral endowment.
I think there's a risk sometimes we think we have to compete with each other in business. There are enough competitors out there. We can all win together if we actually work in a positive fashion together.
In early March, Macquarie released a positive broker note on Lynas. The broker retained its outperform rating on the share and lifted its price target to $12.60. That suggests a potential upside of almost 30% on the current Lynas share price.
Lynas reported a record net profit after tax of $156.9 million in the company's half-year 2022 results.
Lynas share price snapshot
The Lynas share price has rocketed nearly 60% over the past year but has fallen 10% since market open on 4 January.
In comparison, the benchmark ASX index has returned about 4% in a year.
Lynas has a market capitalisation of about $9.2 billion.
