Rare earth producers surge amid reports the govt is considering a price floor

The news: ASX-listed rare earths producers were among the biggest gainers in afternoon trade following suggestions that the federal government was considering a price floor for some rare earth metals in a bid to shake dependency on Chinese supply chains.

The numbers: At 3:23pm AEST, Iluka Resources shares had lifted 9.5% to 50.5 cents while Lynas Rare Earths shares had lifted 5.7% to 64 cents. The broader materials sector was up 1.2%.

The context: Resources Minister Madeleine King has flagged that the creation of a price floor for rare earth minerals was under “active consideration” as part of the design process for the promised critical minerals strategic reserve, according to the Australian.

Last month the US Department of Defense made an investment in US rare earths producer MP Materials, which included a commitment to a minimum price of USD110 ($170.3) per kilogram for neodymium and praseodymium output stockpiled or sold.