The Lynas Corporation Ltd (ASX: LYC) share price has been up and down like a yoyo this week as traders rush to buy or sell on changing expectations over the future for rare earths prices.
Lynas is a Malaysia-based rare earths miner that has made plenty of headlines recently due to its own regulatory problems over environmental compliance in Malaysia and after investment conglomerate Wesfarmers Ltd (ASX: WES) lobbed a $2.25 per share cash bid for the miner in March 2019.
At the time Wesfarmers's CEO took some criticism in the media and amongst analysts for the move, but with the stock surging to $2.87 today it seems rare earths might turn out to be a hot and profitable space after all.
According to media reports, Wesfarmers is still interested in Lynas although it will now have to bid a lot more than it was previously prepared to.
The main factor driving the volatility in the shares recently though is the headline making news globally that China may ban rare earth exports to the U.S. in response to the US tariffs imposed on China and banning of telco group Huawei.
The news made the previously little-known Malaysian miner a company in the sights of investors globally, as it would still be able to export to the U.S. and potentially become strategically valuable.
Lynas is also reportedly working on a joint venture to mine rare earths in the U.S. in a project that is not likely to be short of deep-pocketed backers.
As we can see then, there are a number of factors stoking the volatility in the Lynas share price that are not likely to relent over the short term. So investors might want to buckle up.
