Lynas Corp. (LYC), the Australian company building the world’s largest rare earths plant in Malaysia, fell in Sydney trading on the dimming outlook for prices and concern its permit may be reviewed should the opposition wrest power in the coming Malaysian elections.
The stock fell as much as 14.3 percent to 48 Australian cents and traded at 51.50 cents as of 1:24 p.m. local time, poised for its lowest close since June 15, 2010. The benchmark S&P/ASX 200 Index gained 0.3 percent.
The outlook for rare earths prices remains weak after Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., China’s biggest producer, reported a 57 percent drop in 2012 profit, said Stan Shamu, a market strategist at IG Markets Ltd. in Melbourne. Malaysian opposition leader Anwar Ibrahim’s proposal to review Lynas’s permit if he wins the elections is also hurting the stock.
The Malaysian elections could be held later this month after the New Straits Times reported today Prime Minister Najib Razak may dissolve parliament as early as tomorrow.
“There seems to be no recovery in the rare earths industry this year and sentiment is made worse by speculation about the election in Malaysia,” Shamu said by phone from Melbourne.
Lynas won’t comment on speculation or stock price movement, Cameron Morse, a spokesman for Lynas who works for FTI Consulting, said by phone from Sydney.
Lynas began production in February at its 11,000 metric ton-capacity first-phase refinery in Malaysia’s Pahang state after delays due to protests and legal challenges over radiation concerns. The company said March 4 it was on schedule to commission the second phase in the second quarter that would double annual capacity.
To contact the reporter on this story: Soraya Permatasari in Melbourne at email@example.com