Shares in Australian rare earths producers, including Lynas Rare Earths and Iluka Resources, experienced a significant downturn in early trading following unconfirmed reports from the United States suggesting a potential reversal of the Trump administration’s plans to establish price floors for rare earth elements. Lynas shares fell by 11 per cent, while Iluka Resources, also impacted by weaker zircon and rutile prices, saw a 15 per cent decrease.
The decline is attributed to growing apprehension regarding the US government’s commitment to supporting the rare earths sector. This follows a previous announcement by the US Department of Defence in July outlining a preliminary plan to set a price floor of $US110 per kilogram for neodymium and praseodymium (NdPr), the most commonly used rare earths. The suggestion triggered a rally in NdPr prices, reaching just over $US100 per kilogram, and a subsequent surge in the share prices of rare earths miners like Lynas.
Lynas Rare Earths is an Australian company that mines and processes rare earth minerals. Iluka Resources is a global critical minerals company with expertise in zircon, synthetic rutile, and rare earth oxides. Other companies such as Arafura Resources, Astron Limited, VHM Limited and Hastings Technology Metals were also affected. Fitch noted that the NdPr price rally was driven by sentiment rather than fundamental supply and demand factors. Meteoric Resources, focused on Brazil, decreased by 11 per cent, and Lindian Resources, focused on Africa, decreased by almost 15 per cent in morning trade.
