SYDNEY, Jan 27, 2026, 16:52 AEDT — The market has shut for the day.
- Lynas dropped 5.0% to A$16.01, underperforming a robust Sydney market.
- Shares of other local rare-earth players, like Arafura and Iluka, also slipped.
- Ahead of Lynas’ upcoming results, investors are digesting new U.S. government funding steps targeting rare earths.
Lynas Rare Earths Ltd (ASX:LYC) finished Tuesday down 5.0%, closing at A$16.01 after swinging between A$17.32 and A$15.65. Around 9.8 million shares changed hands. Arafura Rare Earths dropped 6.9%, while Iluka Resources lost 4.6%, according to rare-earth listings data. 1
This shift is significant as rare-earth stocks have turned into a policy-driven play once more, extending beyond Washington. According to two sources who spoke to Reuters, the Trump administration plans to acquire a 10% stake in USA Rare Earth through a $1.6 billion debt-and-equity deal. This highlights how governments are increasingly betting on supply-chain agreements that can quickly influence market sentiment. 2
Rare earths, essential metals found in magnets and components for everything from electric vehicles to fighter jets, remain largely processed by China. The U.S. and its allies view this dependence as a national-security threat, according to the Associated Press. 3
Lynas slipped despite the broader market gaining ground. The S&P/ASX 200 climbed 0.92% by the close, reaching a three-month peak after trading restarted following Monday’s Australia Day holiday, when the cash market was shut. 4
Despite Tuesday’s pullback, Lynas remains roughly 36% higher year-to-date, per data from Intelligent Investor. 5
In its latest quarterly update, Lynas reported a roughly 30% drop in December-quarter NdPr output—neodymium-praseodymium, the critical magnet metal—compared to the previous quarter. The decline followed power outages at its Kalgoorlie facility and extensive planned maintenance in Kuantan, Malaysia. CEO Amanda Lacaze mentioned the company is working on off-grid power solutions to stabilize supply and highlighted ongoing “positive market sentiment” into January. 6
The U.S. policy signal remains clear. USA Rare Earth announced a letter of intent for $277 million in proposed federal funding, plus a $1.3 billion loan under the CHIPS Act. Executives told investors the deal lacks a price floor; CEO Barbara Humpton summed it up sharply on the call: “What would be the cost of having access to nothing?” 7
But policy-driven budget cuts cut both ways. They can channel volume toward preferred projects, yet rare-earth prices tend to bounce back once supply catches up or demand cools off. For Lynas, fresh outages in Western Australia or setbacks in expanding separation capacity would hit quarterly volumes hard and fast.
Not all stocks in the sector followed the same trend. Ionic Rare Earths revealed that its subsidiary received a £12 million ($16.4 million) grant from the British government to back a magnet recycling plant in Belfast. This highlights growing interest in downstream projects alongside mining operations. 8
Traders will soon be watching to see if the recent U.S. critical-miner backing sparks a wave of similar deals—and if customers continue to sign contracts that don’t closely follow standard pricing indexes.
Lynas’ upcoming earnings report, set for March 4, will be the next key trigger, according to Investing.com. Investors will zero in on realised prices, cash flow, and any news regarding power stability at Kalgoorlie. 9
