Shares in Lynas Corporation Ltd (ASX:LYC) have taken a tumble this week, despite the rare earths producer announcing a new long term supply agreement with a major rare earths consumer.
On Wednesday Lynas announced that it has inked a deal for the supply of Mount Weld rare earths to be produced at the Lynas Advanced Materials Plant in Malaysia, on schedule for the first feed of rare earths concentrate in September this year.
Lynas said the price of the multi-year contract will be based on market prices at the time of delivery with the ability to extend to contract upon mutual agreement.
However, the new deal also coincided with news of a one-month independent environmental review from the Malaysian government for Lynas’ Advanced Materials Plant, stoking concerns about delays.
At the same time Lynas’ proposed sale of a rare earths and metals deposit to Forge Resources Ltd (ASX:FRG) has been dealt a blow, with a shareholder vote deferred from May 18 to mid-June.
Shares in Lynas last traded at $2.16, having fallen over 11 per cent this week.
In the first half of the 2011 financial year Lynas Corporation booked a net loss of $20.5 million.