At lunch on Friday the S&P/ASX 200 Index (ASX: XJO) is on course to end a positive week in a subdued fashion. The benchmark index is currently down 0.2% to 6,811.6 points.

Here’s what has been happening on the ASX 200 today:

Wild day for the Zip share price

It has been a wild day for the Zip Co Ltd (ASX: Z1P) share price on Friday. After storming as much as 15% higher in early trade, the buy now pay later provider’s shares were down 4% in late morning trade. At the time of writing, the Zip share price is down 2%. On Thursday the company released its second quarter update and revealed stellar customer and transaction growth. This was particularly the case in the US market.

Lynas US update

The Lynas Rare Earths Ltd (ASX: LYC) share price is rocketing higher today after signing a deal with the U.S. Department of Defense. According to the release, the rare earths producer has entered into an agreement with the United States Government to build a commercial Light Rare Earths separation plant in Texas. This is separate to its phase one work on a U.S. based Heavy Rare Earth separation facility. If that contract moves to phase two, it will be constructed on the same site.

Fisher & Paykel Healthcare impresses

The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price is storming higher today following the release of a trading update. That update reveals that demand for the medical device company’s shares has remained strong. This led to the company’s operating revenue increasing 73% over the prior corresponding period for the nine months ended 31 December 2020. In addition to this, management advised that it now expects to outperform its prior full year guidance.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the Lynas share price with a 12% gain following its US update. The worst performer has been the Unibail-Rodamco-Westfield (ASX: URW) share price with a 7% decline. This morning the company announced the disposal of the SHiFT office building in Paris for 620 million euros.

More reading

• Why Aussie Broadband, Fisher & Paykel Healthcare, Lynas, & Megaport are charging higher
• Why the Contact Energy (ASX:CEN) share price has surged 10% higher today
• Here’s why the Lynas (ASX:LYC) share price jumped 7% higher today
• Why the Fisher & Paykel Healthcare (ASX:FPH) share price could jump higher today
• 5 things to watch on the ASX 200 on Friday

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to end a positive week on a subdued note. The benchmark index is currently down 0.1% to 6,818.2 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are charging higher:

Aussie Broadband Ltd (ASX: ABB)

The Aussie Broadband share price has jumped 7% to $2.65 after providing its guidance for the first half. According to the release, the internet service provider reported 342,634 broadband connections at the end of December. This is up 31% over the last six months and 88% since this time last year. In light of this, it expects to report half year operating earnings of $8 million to $8.5 million excluding IPO costs.

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

The Fisher & Paykel Healthcare share price has stormed 7% higher to $32.92. This morning the medical device company revealed that it has continued to experience strong demand for its products. This was particularly the case in the Hospital Products segment, which underpinned a 73% increase in group operating revenue for the nine months ended 31 December 2020. Management also revealed that it expects to outperform its prior guidance for FY 2021.

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas share price has surged 11.5% higher to $5.45. Investors have been buying the rare earths producer’s shares after it provided an update on its US activities. According to the release, the company has entered into an agreement with the United States Government to build a commercial Light Rare Earths separation plant in Texas.

Megaport Ltd (ASX: MP1)

The Megaport share price is up a further 2.5% to $12.98. Investors have been buying the global elastic interconnection services provider’s shares over the last couple of days after Goldman Sachs upgraded them to a buy rating with a $15.00 price target. Goldman believes Megaport will benefit from growing demand for public cloud infrastructure and the broadening of its product suite. The broker also has increased confidence on its path to generating positive free cash flow.

More reading

• Here’s why the Lynas (ASX:LYC) share price jumped 7% higher today
• Why the Fisher & Paykel Healthcare (ASX:FPH) share price could jump higher today
• Megaport (ASX:MP1) share price jumps 7% on broker upgrade
• Why Megaport, Netwealth, PointsBet, & Zip shares are racing higher
• 3 ASX shares powering the electric car revolution

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Aussie Broadband Limited. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Twenty years ago this weekend, the biggest existential threat to Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) quietly landed in Australia.

Funnily enough, back then, no one knew what it was and what impact it would have.

German budget supermarket Aldi opened its first two stores in Australia on 25 January 2001.

They were located in Marrickville in inner west Sydney and near Bankstown Airport further out west, according to QUT professor Gary Mortimer and University of Tasmania senior lecturer Louise Grimmer.

And the stores looked very odd to Australians at the time.

“Each stocked just 900 products, 90% of which were unknown brands,” the academics wrote on The Conversation.

“Shoppers had to bring and pack their own bags themselves. To use a trolley required a gold coin. They didn’t seek to entice customers with loyalty rewards or other gimmicks.”

Not many in the supermarket industry, let alone in the ASX investment world, thought Aldi posed a serious challenge to the massive Australian incumbents.

Right place at the right time

After all, budget supermarkets Franklins and Bi-Lo had just failed. It seemed Australian shoppers in 2001 were in no mood to buy weird brand names, pay for bags, then pack their own groceries.

But Mortimer and Grimmer explained Aldi stepped in just at a time when there was a low-price power vacuum in the market.

“Aldi expanded quickly. By mid-2003 it had 38 stores in New South Wales and six in Victoria. By 2011, it had 251 stores. By early 2013, more than 280,” they wrote.

“It overtook the IGA group [owned by Metcash Limited (ASX: MTS)] to become the third-biggest player in Australia’s supermarket sector by the end of 2013 – taking 10.3% of all grocery dollars (with Coles having 33.5% and Woolworths 39%).”

In case you’re wondering, you can’t buy shares in Aldi. Both the Australian arm and the German parent are privately held.

How Aldi changed the way Woolies and Coles behave

Woolworths and Coles were forced to respond to the success of Aldi.

The biggest impact, according to Mortimer and Grimmer, has been the rise of private label and “phantom” brands on our shelves.

“Aldi sells no ‘ALDI’ branded products. Instead it trades in phantom brands, such as Belmont ice cream, Radiance cleaning product and Lacura skin care. These brands are intended [to] overcome perceptions of private label items being lower quality,” they wrote.

“In 2016, Woolworths launched its own range of phantom brands. Coles followed suit in 2020 with brands including Wild Tides tuna and KOI toiletries.”

But Aldi still remains ‘good, different’

Despite the incumbents cloning some of Aldi’s business practices, the challenger still remains significantly different.

Aldi has shunned self-service checkouts. It still levies a surcharge for credit card payments. And despite COVID-19 lockdowns last year, the retailer has no plans to sell anything online, let alone deliver groceries to anyone.

Mortimer and Grimmer pointed out Aldi never faced a customer backlash when plastic bags were phased out around Australia a couple of years ago.

“It [had] never offered free shopping bags, always charging 15 cents for them,” they wrote.

“So Aldi continues to be an exception to the rule in Australian supermarket retailing. History suggests that’s a recipe for continued success.”

More reading

• 3 top ASX dividend shares to buy for 2021 and beyond
• 2 quality ASX dividend shares for income investors to buy
• What analysts expect from the Woolworths (ASX:WOW) first half result
• CV Check (ASX:CV1) share price flat on results update
• What to expect from the Coles (ASX:COL) first half result

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Contact Energy Limited (ASX: CEN) share price has burst from the blocks in early trade after its latest monthly operating report. Today’s early gains follow a 7.3% share price gain yesterday as investors pile into the Kiwi energy share.

Why is the Contact Energy share price up 10% today?

Shares in the New Zealand electricity generator and retailer jumped 9.7% higher at market open following the update. Contact released its December 2020 monthly report with key updates from across the business. 

In the Customer business, Contact recorded mass market electricity and gas sales of 286 gigawatt hours (GWh), down from 303 GWh in December 2019. The Customer average electricity sales price climbed 2.8% to $256.13/MWh.

Mass market electricity and gas netback totalled $98.67 per megawatt hour (MWh), up from $89.89/MWh in December 2019. Netback is an approximate measure of gross profit per unit, incorporating sales price less cost of delivery.

Contact’s Wholesale business recorded contracted electricity sales of 582GWh, down from 639GWh last year. Electricity and steam net revenue climbed to $70.29/GWh, up from $69.64 in December 2019, with electricity generated (or acquired) of 617GWh, up from 691GWh last year.

The Contact Energy share price is rocketing higher following the update which showed higher than expected wholesale electricity pricing in December. New Zealand national electricity demand was down 0.9% on December 2019 numbers with lower nationwide temperatures a contributing factor.

Geothermal generation climbed from 276GWh in December 2019 to 285GWh, while hydro and thermal output both fell lower. Hydro generation fell 22.9% to 266GWh with thermal generation falling 38.6% to 27GWh.

The Contact Energy share price has rocketed higher this morning despite the broader market starting slowly. The benchmark S&P/ASX 200 Index (ASX: XJO) has edged 0.1% lower in early trade but energy stocks continue to climb.

Today’s gains follow a good day of trade for the Kiwi energy share in yesterday’s trade. The Contact Energy share price surged 7.3% higher with strong inflows from offshore exchange traded funds (ETFs) into New Zealand clean energy shares driving high demand.

More reading

• 5 things to watch on the ASX 200 on Friday
• ASX 200 rises 0.8%
• ASX 200 up 0.65%: Zip update impresses, Netwealth rockets, Cleanaway dumped
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises 0.4%

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Perpetual Limited (ASX: PPT) share price is trending lower today after the company released a second quarter business update.

Why is the Perpetual share price falling?

The Perpetual share price is on the slide this morning after the Aussie fund manager provided an update for the quarter ended 31 December 2020 (Q2 2020). Perpetual’s total assets under management (AUM) came in at $89.2 billion. That came after the completion of its Barrow, Hanley, Mewhinney & Strauss (Barrow Hanley) acquisition on 18 November 2020.

Perpetual acquired a 75% stake in United States investment manager Barrow Hanley, tripling its assets under management. The acquisition also expanded Perpetual’s reach in the US as it builds out its global investment capabilities.

The Perpetual share price is down 3.6% at the time of writing following this morning’s update. CEO and managing director Rob Adams said Perpetual is seeing “positive momentum” in FY21 across all divisions.

Perpetual Asset Management Australia’s total AUM fell 2% to $22.7 billion due to outflows from its enhanced cash mandate. Positive market returns as well as improved Aussie equities performance helped to offset these outflows. Excluding US-based ESG investment manager Trillium, the segment’s total average AUM for the quarter was $23.5 billion compared to $23.3 billion for the September quarter.

Perpetual Asset Management International’s total AUM, including Trillium and Barrow Hanley, came in at $66.5 billion. 

Mr Adams said Perpetual’s new adviser growth strategy helped drive positive net flows into Perpetual Private during the quarter. Perpetual Private funds under advice (FUA) climbed 6% to $15.5 billion with positive net inflows of $0.2 billion.

Perpetual Corporate Trust’s FUA climbed 1% higher to $936.2 billion for the quarter with strong growth across a number of segments including Managed Fund Services (MFS) and Debt Market Services (DMS).

Foolish takeaway

The Perpetual share price is down nearly 4% in early trade following the company’s latest trading update. The benchmark S&P/ASX 200 Index (ASX: XJO) has edged 0.1% lower to 6,818.50 points in a soft start to the day.

More reading

• Why the Emerge Gaming (ASX:EM1) share price rocketed 23% higher today
• Why the Spirit (ASX:ST1) share price is surging 10% higher today
• 3 biggest risks to ASX share investors right now
• Here’s why the Fortescue (ASX:FMG) share price is edging lower
• Here’s why the Lynas (ASX:LYC) share price jumped 7% higher today

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Emerge Gaming Ltd (ASX: EM1) share price is on course to end the week with a solid gain.

In early trade, the esports and gaming technology company’s shares were up as much as 23% to 9 cents.

The Emerge Gaming share price has eased a little since then but is still up 5.5% to 7.7 cents at the time of writing.

Why is the Emerge Gaming share price storming higher?

Investors have been buying the company’s shares this morning after it provided an update on the subscription numbers of its MIGGSTER social gaming platform.

According to the release, the MIGGSTER platform has now registered over 100,000 paying subscribers. This compares to 50,860 subscriptions in mid-December.

The company has verified that it has 100,387 subscriptions, comprising 74,366 annual packages, 10,488 bi-annual packages, and 15,533 monthly packages. Management notes that this means 74% of its subscriptions sold to date are annual subscriptions, which are sold at a price of EUR69.00 per annum.

The update reveals that the subscriptions are coming from all corners of the world, but predominantly in Asia. A total of 53% of subscribers are from China (32%) and South East Asia (21%).

In light of the above, the company estimates that MIGGSTER has generated EUR5.65 million (~A$ 9.16 million) in revenue to date.

However, due to its revenue sharing and commissions, the company estimates that it will retain approximately A$3.115 million or ~34% of the subscription value received.

This may have disappointed investors and led to its shares giving back some of those early gains. Especially given that earlier this month Emerge stated that “it has banked first cash receipts from the Emerge operated MIGGSTER social gaming platform to the value of AUD$8.3 million to 31 December 2020.”

Outlook

No guidance has been provided. However, management advised that MIGGSTER subscriptions continue to show strong daily growth. It will continue to provide the market with material updates as and when they happen.

More reading

• Why BetMakers, Emerge Gaming, Infratil, & Tyro shares are pushing higher
• Why the Emerge Gaming (ASX:EM1) share price is rocketing 33% higher today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Spirit Technology Solutions Ltd (ASX: ST1) share price is shooting higher today. This comes after the company announced record results for the first-half of the 2021 financial year.

In early-morning trade, the company’s shares swapping hands at 44 cents, up 10%.

How did Spirit perform for H1 FY21?

The Spirit share price is soaring today after the tele-communications company advised it had achieved record growth across all key business segments.

For the period ending 31 December, Spirit reported first-half total revenue of $42.7 million, reflecting a 243% increase year-on-year (YoY). The second-quarter did most of the heavy lifting, contributing $27.1 million, a jump of 338% YoY and 73% on the first quarter of FY21.

The robust result for Q2 came from recurring revenue which stood at $11.5 million, indicating a 116% lift YoY. In addition, its solutions and projects revenue delivered $15.6 million to the company. This represented a mammoth 1,768% growth YoY and 155% on the prior quarter. The projects department however did receive government grant infrastructure revenue, driving the sound performance.

Total contract value (TTV) sales soared to $14.1million, accelerating 303% YoY. This was credited to the strong demand for Spirit products from customers. Notably, pending installations, and IT services and technology are in the order book, worth $15.1 million and $6.6 million, respectively.

Earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be between $4.1 million and $4.4 million. On the prior corresponding period (H1 FY20), EBITDA came in at $1.6 million.

The group recorded positive cash flow of $4.3 million from operating activities for the first-half.

Spirit maintained a healthy balance sheet with $23.3 million in cash at the end of the calendar year.

What did the managing director say?

Spirit managing director Sol Lukatsky welcomed the positive results, saying:

We have had an exceptional first half for FY21. Our record growth has continued as businesses seek to modernise their IT & Telco systems. We’re now building scale and taking significant market share across SMB, essential services and corporate segments.

…The integration of Spirit’s acquired businesses into a bundled offering is proceeding at speed, is ahead of schedule and already showing significant commercial results – as seen in our Q2 21 numbers. We are still expecting additional upside as the operating model matures in the market in H2 21.

About the Spirit share price

The Spirit share price has tracked well over the past 12 months, gaining more than 100% for investors.

Its shares hit a low of 12 cents in April, and reached a multi-year high of 45 cents in September.

Based on the current share price, Spirit commands a market capitalisation of around $172 million.

More reading

• 3 biggest risks to ASX share investors right now
• Here’s why the Fortescue (ASX:FMG) share price is edging lower
• Here’s why the Lynas (ASX:LYC) share price jumped 7% higher today
• Why the MyFiziq (ASX:MYQ) share price is racing higher today
• Why the Coca-Cola Amatil (ASX: CCL) share price is in focus today

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of SPIRIT TC FPO. The Motley Fool Australia has recommended SPIRIT TC FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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COVID-19 vaccines are rolling out, consumers are cashed up and most market analysts are bullish for 2021.

But after a shocking 2020, the world remains a very uncertain place.

So two professional investors were asked this week at a GSFM briefing what would wipe the smiles off their faces.

Here’s what they said:

Big risk #1: China

Tribeca Investment Partners portfolio manager Jun Bei Liu identified the rising power of China as a potential danger to investors.

“It’s created political tension over the last 12 months. China’s growing very rapidly. Its economy may well exceed the size of the US within sight, very quickly,” she said.

“You might see more conflicts, whether it’s trade or something else.”

Big risk #2: big tech

Liu also called out the public and government scrutiny of giant technology companies as a risk for stock markets.

“We also have increased pressure on the market power of some of the tech players,” she said.

“You will see increased scrutiny around the western world… There will be more regulation.”

Some current examples are anti-trust and news revenue arguments against Alphabet Inc (NASDAQ: GOOGL) and Facebook Inc (NASDAQ: FB). And even the Chinese government’s scrutiny of Alibaba Group Holding Ltd (NYSE: BABA).

There will also be a segregation of tech infrastructure between the US and China for security, political and economic reasons, according to Liu.

She feared for the worst if either China or tech regulation dented market confidence.

“What does that mean for the equity market? It means risk. It means when we start having these uncertainties, markets just aren’t priced in for it.

“If any of those [risks] flare up, we will see equity markets sold off. Investors will try to re-price on what it means.”

Big risk #3: inequality

Munro Partners chief investment officer Nick Griffin’s biggest concern for the market was the growing gap between the wealthy and the poor.

After all, that very trend prompted the rise of populism in recent years – as seen in the US election of Donald Trump and the UK’s vote for Brexit.

And last year only exacerbated the situation.

“I know the pandemic was a terrible thing, and it has created these winners and losers. So the inequality that was in the market before gets worse,” said Griffin.

“There will be a reckoning at some point in the future. There has to be, because you can’t have this level of inequality occurring in the world… Over the long run it’s probably not sustainable.”

Griffin said that climate change is the biggest investment opportunity since the rise of the internet.

“We conservatively estimate this will cost US$21 trillion (AU$27 trillion) over the next 30 years… This is going to be the biggest S curve of my investment lifetime.”

But this type of change leaves citizens behind who are only skilled to work in old world industries, heightening the very tension that he identified.

Griffin did temper his view about the timing though, saying he thought the “reckoning” would not take place “in the next 12 months”.

More reading

• Here are the US shares ASX investors are buying
• US decides against delisting Tencent and other Chinese giants
• Signal share price? An Elon Musk tweet and a WhatsApp controversy
• Here are the US shares ASX investors are buying in 2021 so far
• Apple’s latest privacy move is a blow for Facebook, but not The Trade Desk. Here’s why

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Tony Yoo owns shares of Alphabet (A shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alibaba Group Holding Ltd., Alphabet (A shares), and Facebook. The Motley Fool Australia has recommended Alphabet (A shares) and Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Fortescue Metals Group Limited (ASX: FMG) share price is edging lower on Friday.

In morning trade, the iron ore giant’s shares are down 0.5% to $24.79.

Why is the Fortescue share price edging lower?

Investors have responded in a subdued fashion to Fortescue providing the market with guidance for the first half of FY 2021.

According to the release, Fortescue’s Chairman and founder, Dr Andrew Forrest AO, has recorded to a live audience the first ABC Boyer Lecture for 2021.

The release explains that the lecture includes a reference to Fortescue’s net profit after tax for the month of December. Which, based on preliminary unaudited management accounts, came to over US$940 million thanks to sky high iron ore prices.

In light of this information being out in the public, the company has decided to release its guidance for the first half ahead of the formal release of its results on 18 February.

What is Fortescue expecting in the first half?

The iron ore giant advised that the preliminary net profit after tax for the six months ended 31 December 2020 on an unaudited basis will be in the range of US$4 billion to US$4.1 billion.

As a comparison, in the first half of FY 2020, Fortescue reported a net profit after tax of US$2.5 billion. This means that the company is expecting to deliver an impressive 60% to 64% increase in net profit after tax over the prior corresponding period.

This bodes well for dividends. FY 2020’s interim dividend was a fully franked 76 cents. If Fortescue were to increase its interim dividend by the same amount, it will mean an interim dividend of ~$1.23 per share.

Which, based on the current Fortescue share price and purely from the interim dividend, implies a 5% yield for investors.

However, as great as this is, the market appears to have already factored this into the Fortescue share price. Hence the subdued response this morning.

More reading

• What a dramatic day in the US could mean for ASX shares in 2021
• Leading brokers name 3 ASX shares to buy today
• ASX dividends: Are miners the new bank shares?
• Can iron ore keep pumping the share prices of these ASX miners?
• ASX 200 Weekly Wrap: ASX drops despite promises of more US stimulus

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Lynas Rare Earths Ltd (ASX: LYC) share price is on course to end the week on a very positive note.

At the time of writing, the rare earths producer’s shares are up 7% to a multi-year high of $5.25.

Why is the Lynas share price jumping higher?

The catalyst for this strong gain has been an announcement this morning in relation to its activities in the United States.

According to the release, the company has entered into an agreement with the United States Government to build a commercial Light Rare Earths separation plant in Texas.

This project is in collaboration with the U.S. Department of Defense and is scheduled to be completed in accordance with the department’s timetable and as part of the Lynas 2025 plan.

While the cost of the project is still being finalised, Lynas expects Department of Defense funding to be capped at approximately US$30 million. The company will also be expected to contribute approximately US$30 million under the agreement.

Once operational, the plant is expected to produce approximately 5,000 tonnes per annum of rare earths products. This includes approximately 1,250 tonnes per annum of neodymium-praseodymium (NdPr). It will also be able to receive material directly from the cracking and leaching plant that Lynas is developing in Kalgoorlie, Western Australia.

What’s next?

In the middle of last year, the company signed another contract with the U.S. Department of Defense for Phase I work on a U.S. based Heavy Rare Earth separation facility.

Should that contract proceed to the next phase, the Texas facility would house both Heavy Rare Earths and Light Rare Earths processing facilities.

These facilities would serve both the Defense Industrial Base (DIB) and the growing commercial market. The latter includes electric vehicles and green technologies made in the U.S. and global markets.

Management commentary

Lynas CEO, Amanda Lacaze, commented: “As the only non-Chinese commercial producer of separated Rare Earths products to the global marketplace, Lynas is delighted by the opportunity to develop a Light Rare Earth separation facility in the United States.”

“Rare Earth materials are critical inputs to many industrial supply chains, including electric vehicles, electronics and several defence applications. While demand for Rare Earth materials continues to grow, COVID-19 has exposed the risks within global supply chains of the single sourcing of critical materials.”

“This agreement is consistent with the U.S. Government’s commitment to rebuild the domestic industrial base, while working effectively with partner nations. The Texas plant will ensure the U.S. has a secure domestic source of high quality separated Rare Earth materials. This secure supply will provide the essential foundation for the renewal of downstream specialty metal making and permanent magnet manufacturing in North America,” Ms. Lacaze concluded.

More reading

• 3 ASX shares powering the electric car revolution
• What does the Biden administration mean for ASX shares? 
• Iluka (ASX:ILU) share price surged higher on a potential $1bn+ valuation uplift
• These were the best performing ASX 200 shares last week
• ASX 200 rose 1.6%

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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