Lynas Corporation Ltd (ASX: LYC) has announced some potentially promising news involving a Texas company.
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 producers of rare earths outside of China.
What Lynas Announced
Lynas and Texas company Blue Line Corporation announced that they have signed a memorandum of understanding for a joint venture to develop rare earths separation in the United States.
Blue Line Corporation is described as a leading US processor of rare earths products.
One of the main reasons for the JV idea is that rare earth separation capacity has been absent from the US for a few years and that the JV could fill that gap.
If the JV goes ahead it would be the only large-scale producer of separated medium and heavy rare earth products outside of China.
Over the next year Lynas and Blue line will work on the proposed development at the Blue Line site in Hondo, Texas. Initially the JV will focus on the heavy earth separation of Dysprosium and Terbium. It may also include light earth separation of Neodymium, Praseodymium and Lanthanum.
The JV will be majority owned by Lynas.
Lynas CEO and Managing Director Amanda Lacaze said: “This is an exciting opportunity to develop local separation capacity for our customers in the United States and to close a critical supply chain gap for United States manufacturers.”
Does This Make Lynas A Buy?
I wouldn’t be surprised to see the market respond positively to this news as a good development away from Malaysia. Whilst the Wesfarmers Ltd (ASX: WES) takeover has gone quiet, it could come back with another attempt if this news is good enough.
But I’m not a fan of investing in commodity businesses, so I don’t think Lynas will ever feature in my portfolio. Instead I would rather invest in the exciting growth shares in the FREE report below.
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