The Lynas Corporation Ltd [ASX:LYC] share price is down 4.46% trading at $2.47, at time of writing.
In a tumultuous eight months since it broke out at the end of March, the Lynas share price is currently up around 20% since 9 December.
The handy chart below shows you the various events that are behind recent Lynas share price movements:
The move comes on the back of news that the US military will likely foot the bill for a processing facility in Texas.
Today, Lynas announced that the Malaysian regulator didn’t approve its application for a processing limit increase. Despite this hiccup, we look at why Lynas could have a bright future, even if the US-China trade war resolves itself.
Lynas share price posts small loss on Malaysian setback, still on course for CY18 production
The Lynas share price sunk on open with a morning announcement revealing that their lanthanide processing limit would not be increased.
The Malaysian regulator put the kibosh on the application — which all in all is minor setback, given their operating licence in the country was in danger earlier in the year.
The announcement also noted that their NdPr production is still on course to match the CY18 level.
Lanthanide is used as a catalyst in the production of petroleum, while NdPr is particularly useful for permanent magnets.
These magnets are found in wind turbines and electric vehicles.
For a more in-depth look at the uses and market dynamics of rare earths go here.
Lynas’ strategic role, products in technology make its earnings multiple look sensible
Lynas is a particularly interesting company because it is a resources company behind technology products.
Call it tech-resources.
As such, it could in some ways be seen as a hidden growth stock.
No matter which way the trade war goes, and it seems to be headed to a pre-election resolution for now, Lynas may still come up a winner.
The fact that the US military is happy to pay for its $30 million Texas facility is an important sign.
The company still needs to complete the tender process, but it wouldn’t surprise us if the Lynas share price got a further boost from this deal.
With many big ASX-listed gold stocks trading at earnings multiples in excess of 30, by comparison Lynas’ P/E of 21 could be a steal if things keep moving in the right direction for them.
We look at what makes Lynas tick in a comprehensive free rare earths report which can be found here.
For Money Morning