Lynas Rare Earths Soars Amid Chinas Export Ban, While Core Lithium Faces Headwinds in Volatile Market

Highlights:

• The driving force behind Lynas' upward trajectory appears to be China's recent export ban on technology essential for rare earths processing.
• Lynas stands out as a significant player outside China in the rare earths market.
• Core Lithium cites an 80% decline in spodumene concentrate prices this year, prompting the company to reassess its operations.

Lynas Share Price Gains Momentum

The Lynas Rare Earths Ltd (ASX: LYC) is experiencing a notable surge, with its share price rising to AU$7.030, marking a 4.4% increase. This upswing follows a 3.382% jump earlier in the day, positioning Lynas as a standout performer in the S&P/ASX 200 Index.

China's Export Ban Creates Tailwinds

The driving force behind Lynas' upward trajectory appears to be China's recent export ban on technology essential for rare earths processing. As China holds a virtual monopoly on rare earths, the export ban is seen as a move to protect this dominance. Analysts, including Nathan Picarsic of Horizon Advisory, highlight the vulnerability of global supply chains reliant on China for critical materials.

Lynas Positioned as Key Player

Lynas stands out as a significant player outside China in the rare earths market. The company operates the Mt Weld mine in Western Australia, boasting one of the world's highest-grade rare earths mines. Lynas Malaysia, with its separation and processing facilities, plays a crucial role in the company's supply chain.

Legal Hurdles Overcome

Recent legal challenges faced by Lynas Malaysia were resolved in October when the Malaysian government granted the company a license variation. This decision allows Lynas to continue importing and processing lanthanide concentrate from Mt Weld.

Bullish Outlook and Analyst Predictions

Bell Potter, a prominent broker, has expressed optimism about Lynas' future, assigning an 'add' rating to the stock. The broker envisions Lynas doubling its capacity over the next three years. With a target Lynas share price of $8.80, Bell Potter anticipates a potential 24% upside even after the recent surge.

Core Lithium Faces Challenges Amid Market Volatility

In contrast to Lynas' success, Core Lithium is grappling with challenges in the lithium market. The company's shares plunged 18% as it reviewed its business strategy due to plummeting lithium prices. Core Lithium is considering prioritizing ore mining while temporarily suspending mining operations in its BP33 lithium project in the Northern Territory to cut costs.

Spodumene Concentrate Prices Decline

Core Lithium cites an 80% decline in spodumene concentrate prices this year, prompting the company to reassess its operations. Despite planning to continue ore processing during the wet season, the decision to suspend work on the BP33 lithium project reflects the harsh market conditions faced by lithium producers.

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