- Lynas Corporation closer to first rare earth production
- Upside potential still significant even if further delays
- Macquarie initiates with an Outperform rating

By Chris Shaw

With the Mount Weld Rare Earth Project close to first production, market interest in Lynas Corporation ((LYC)) is growing. As evidence, Macquarie on Friday initiated coverage on the company with an Outperform rating.

Demand for rare earth elements is estimated to have increased by 8-10% per annum between 2000-2010. Macquarie notes China has been the main player in the market and is forecast to account for 66% of total global demand by 2015.

China is also the main supplier of rare earth elements, with 55 million tonnes of identified reserves according to the United States Geological Survey. This equates to around half of identified global rare earth reserves. China disputes this, the Chinese Society of Rare Earths suggesting China's share of global reserves has fallen from 41% in 1998 to 32% in 2010.