Lynas Rare Earths shares lift on US rare earth magnet agreement with Noveon Magnetics
Make us a preferred source
Make us a preferred source on Google
The news: Lynas Rare Earths has seen its shares lift in morning trade after announcing it had entered a partnership with Noveon, the only operational US manufacturer of sintered rare earth magnets used in high performing electronics.
The numbers: At 11:25am AEDT, shares in Lynas Rare Earths had lifted 2.6% to $20.06.
The context: Lynas Rare Earths announced late on Wednesday that it had signed a memorandum of understanding to form a strategic partnership with Noveon to establish a “scalable and domestic US supply chain for rare earth permanent magnets”.
Under the agreement, the two companies will deliver light rare earth and heavy rare earth materials, expand metal, alloy and magnet production and supply high performance finished magnets to the defence, automotive and industrial sectors.
The agreement is non-binding and subject to negotiation of definitive agreements. Expansion into the magnet supply chain is part of Lynas’ Toward 2030 strategy.
On the partnership, Morgan Stanley analysts said they continued to see Lynas as a "key beneficiary of downstream and government support being in a unique position as the only ex-China separated light and heavy rare earths producer of scale".
Morgan Stanley has an 'equal-weight' rating on the stock with a price target of $19.45.
What they said: “Together, we can offer a total solution today, not five years from now, that meets immediate US economic and national security needs while building greater capacity and ensuring long-term supply chain resilience for the US,” Noveon Magnetics CEO Scott Dunn said.
Lynas CEO and managing director Amanda Lacaze said combining her company’s “world-class rare earths mining and processing expertise with Noveon’s proven downstream manufacturing capabilities, we can provide immediate and practical support to US manufacturers with a secure and traceable supply of high-performance magnets”.
The sources: ASX, Morgan Stanley research
