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Share Watch – 25 July 2021

Share Watch –  Lynas Rare Earths Ltd (LYC:ASX)

Lynas said on Thursday that it received a A$14.8 million (US$10.9 million) grant from Australia to commercialise a new mineral refining process that produces high-purity rare-earth carbonate.

The grant comes as nations worldwide look at ways to curb their reliance on China for the specialised minerals, which are used in a range of products including electric vehicles, smartphones and military equipment.

Lynas, the world’s largest producer of rare earths outside China, said the new refining process would be used at its upcoming A$500 million processing facility in Kalgoorlie, Western Australia.

About half the cost of implementing the new process at Kalgoorlie will be met by the grant, which was made as part of the Australian government’s Modern Manufacturing Initiative.

According to a government website, the initiative supports and co-funds projects to encourage linkages between local businesses and domestic and international firms.

Lynas said it could supply the rare-earth carbonate produced in Kalgoorlie to its plant in Malaysia and its proposed facility in the United States.

Shares of the company rose as much as 8.2% in their biggest intraday jump in five months.

In other news, energy infrastructure operator Spark Infrastructure (ASX:SKI) has announced a double whammy, revealing a $5 billion international bid for its business and plans for a monster 2.5GW wind, solar and battery storage hub to feed the New South Wales grid.

Transmission and distribution network owner Spark owns 15% of NSW’s Transgrid and 49% of Victoria Power and SA Power Networks. It also has a small and growing renewable generation arm including the 100MW Bomen solar farm. Spark revealed today it knocked back a cash bid from Kohlberg Kravis Roberts and the Ontario Teachers pension fund at $2.70 a share in early July which it considered undervalued.

The bidders then lobbed a new $2.80 cash offer in, still undervalued according to Spark, but enough to give KKR and Ontario Teachers access to “limited information on Spark Infrastructure and its prospects.”

“The Board notes that there is no certainty that the engagement between Spark Infrastructure and the Consortium will result in a further revised proposal from the Consortium,” Spark said in a statement.

“To the extent any further distribution is paid or declared prior to implementation of any proposed transaction, the implied consideration under the Revised Proposal would be further reduced for this amount.”

SKI shares skyrocketed by 7.1% last week.

Meanwhile it has unveiled plans for the gargantuan wind, solar and battery storage Dinawan Energy Hub in southern NSW, on the route for the interconnector between Wagga Wagga and Robertstown in South Australia.

Designed to offset the impact of coal station closures in NSW, it would provide enough electricity to power more than 1 million homes and offset some 5Mt of CO2 emissions a year.

Financial indicators

The VIX fear gauge reassuringly down by 1.25 points since 18 July to 17.20.

The Dow Jones Industrial Average up 191.391 points or 0.55% since 18 July to 35,061.55, the STOXX 600 up 6.77 points or 1.49% to 461.51 and the Shanghai Composite index up 11.10 points or 0.31% to 3,550.40.

Gold up to 1,812.50. US 10-year Treasury Bonds down to 1.276 and oil down to 71.45. Cryptos Bitcoin up by 2,060 points or 6.38% to 34,464.

ASX 200 up 46.30 points or 0.63% since 18 July to 7,348.10. The Aussie dollar down to 73.67 US cents.

Carbon Market Spot Prices

LGC $34.85                                                                                                     STC $38.85

ESC $34.50                                                                                                     VEEC $63.40

ACCU $21.50 (up $0.65 in a week)                                                                  EU ETS €50.79

NZU $NZ48.12 (up $0.32 in a week)                                                                UK ETS GBP42.90

Sources: RenewEconomy, demandmanager,  Reuters, SMH, Market Watch, Ieta

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