MOUNT WELD, Australia/TOKYO (Reuters) – Sprawled across a spent volcano on the remote edge of the Great Victoria Desert in Western Australia, the Mount Weld mine seems a world away from the U.S.-China trade war.
But the dispute has been a lucrative one for Lynas Corp (LYC.AX), Mount Weld’s Australian owner. The mine boasts one of the world’s richest deposits of rare earths, crucial components of everything from iPhones to weapons systems.
Hints this year by China that it could cut off rare earths exports to the United States as a trade war raged between the two countries sparked a U.S. scramble for new supplies – and sent Lynas shares soaring.
As the only non-Chinese company thriving in the rare earths sector, Lynas shares have gained 53% this year. The shares jumped 19 percent last week on news that the company may submit a tender for a U.S. plan to build rare earths processing facilities in the United States.
CHINA ‘DID US A FAVOR’
Rare earths are crucial for producing electric vehicles, and are found in the magnets that run motors for wind turbines, as well as in computers and other consumer products. Some are essential in military equipment such as jet engines, missile guidance systems, satellites and lasers.
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