Search ASX code:
Generic filters

Lynas Corporation Ltd (ASX:LYC) Shares Whacked 20% On Review

The Lynas Corporation Ltd (ASX: LYC) share price got walloped 20% on Wednesday following the release of a review by the Malaysian government.

Lynas Corporation is a ‘rare earths’ minerals producer. Rare earths are minerals which are used as inputs to create many of the electronic devices (e.g. mobile phones) we know and use each day.

Lynas has two large projects: Mt Weld in WA is a deposit and mining facility; Kuantan in Malaysia is a rare earths separation facilities in the world. Lynas is one of the world’s largest products of rare earths outside of China.

What Happened? 

In an ASX statement Lynas responded to a statement from Malaysia’s Energy and Environment Ministry which announced it would impose two new licence conditions on Lynas’ $800 million Kuantan plant.

The plant takes the minerals Lynas produces in Western Australia and processes them.

The Government appears to be concerned with environmental issues and risks to the local community. Lynas was adamant it has met all of the requirements, upholds international standards and employs thousands of locals directly and indirectly.

“This appears to be policy based on politics, not policy based on science,” Lynas CEO Amanda Lacaze said. “It is very disappointing to receive this on the same day that the Review Committee report was released.”

At a time when global trade tensions are a concern for some resources companies, traders and investors, Lynas was primed to benefit. Now, Lynas’ investors will be anxiously awaiting news of waste storage licence renewals throughout 2019.

Lynas says it is considering legal options, but Lacaze said the company remains well-placed to deliver on its long-term strategy.

“However, we are confident we are well placed to manage potential changes and our long term investment thesis remains strong,” Lacaze added.

Now What?

For years Lynas has been a company which has been long on potential and a little too short on delivery. In 2018, the company made its first profit in 10 years. Here’s hoping it can achieve more of the same in 2019.

Personally, I won’t be buying Lynas shares anytime soon — even at these prices — because it’s well outside of my circle of competence.

Free: Our Ultimate BNPL Sector Report

Afterpay, Zip Co, Sezzle… is BNPL the opportunity of a lifetime? Or is the sector a ticking time bomb? Our analyst’s 7,500-word report, Our Ultimate BNPL Sector Report, takes a deep dive into the BNPL sector and shines a spotlight on each of the major players in this booming market. You can get the full report right now (for FREE) by entering your email below, we’ll email it to you.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Free: Our Ultimate BNPL Sector Report

Afterpay, Zip Co, Sezzle… is BNPL the opportunity of a lifetime? Or is the sector a ticking time bomb? Our analyst’s 7,500-word report, Our Ultimate BNPL Sector Report, takes a deep dive into the BNPL sector and shines a spotlight on each of the major players in this booming market. You can get the full report right now (for FREE) by clicking the button below.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.