Wesfarmers Ltd. remains in pursuit of Lynas Corp. Ltd. despite a surge in the latter's share price, as Malaysia signaled that the country may proceed with the license renewal of its Gebeng rare earths plant and following Chinese threats to restrict rare earths exports, The Sydney Morning Herald reported May 31.
Lynas' share price surged 11.3% to A$3.05 at the close of May 31 trading, well above Wesfarmers' takeover offer of A$2.25 per share in March that was rejected.
"At this time, our interest in Lynas is unchanged. However there are many uncertainties remaining in the situation and we will review our position once there is regulatory certainty around Lynas' operating license and the conditions around that," Wesfarmers told the newspaper.
The ASX-listed Lynas is the only major supplier of rare earths outside of China. Lynas recently faced opposition over its renewal of the Gebeng facility license due to low-level radioactive waste generated by the plant.
Malaysian Prime Minister Mahathir Mohamad said he plans to allow the US$800 million Gebeng processing plant to keep operating in the country, as fears loom of China tightening rare earths supply due to mounting trade tensions with the U.S.
Meanwhile, share prices for Chinese rare earths producers also surged on the news of the potential supply curtailment, with analysts predicting that tensions are expected to continue to prop up both the price of such stocks as well as the underlying commodity.