Lynas Corp. makes even bigger bet on rare earths with Malawi acquisition (ASX:LYC)

A flurry of deals at Lynas Corporation Limited (ASX:LYC) signals just how serious the company is about diving headlong into rare earth metals production.

A flurry of deals at Lynas Corporation Limited (ASX:LYC) signals just how serious the company is about diving headlong into rare earth metals production. News broke on Monday that Lynas completed its purchase of a $4 million rare earth resource known as the Kangankunde Carbonatite Complex in Malawi in Africa. The Complex has an inferred resource of 107,000 tons of rare earths oxide.

On Tuesday, Lynas confirmed that it’s in talks to sell its Crown polymetallic deposit at Mount Weld to Forge Resources Ltd (ASX:FRG) in a deal that could be worth $29 million, according to the Finance News Network. The deal would not impact Lynas’ rare earth metals at Mount Weld. Polymetallic metals include niobium, tantalum, zirconium, and titanium.

According to materials on the company’s Web site, Lynas had originally intended to begin a feasibility study on its Polymetallic Crown deposit at Mount Weld after the development of its rare earths deposit. The reversal could be a bid to raise cash as the company races to bring its rare earths mine into production. Increased export quotas out of China have led companies around the world to step up efforts to get rare earths mines into production.

Lynas will be the first outside of China to do so in more than 20 years when ore production starts later this month. The financial stakes are staggering. Prices for lanthanum oxide, which is used in hybrid batteries, has risen more than 1,300 percent since in the wake of China’s export cuts and increased demand from hybrid battery makers.

Getting to market first could help Lynas not only move toward profitability but also lock in contracts for future sales that might create barriers for competitors. Rare earth prices could begin to fall by 2013 as additional production creates a “vast oversupply,” Western Minerals Group Ltd., a Canadian exploration company, forecast last month.

Still, rare earths have proven increasingly vital to technological innovation, and more uses for the metals could spur greater demand moving forward. Already the metals are used in a wide range of high-tech devices from wind turbines to iPhones and hybrid and electric vehicles. China recognized that early on – and it appears Lynas did, too.

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