MELBOURNE: Australia’s richest person, Gina Rinehart, has become a substantial shareholder in Lynas Rare Earths, the largest producer of rare earths outside of China, an exchange filing shows.

The stake, taken by Rinehart’s privately held Hancock Prospecting, is fuelling speculation of sector consolidation after the magnate acted as a kingmaker in Australian lithium.

Rinehart and Hancock Prospecting have become substantial shareholders of Lynas with 5.82% voting power, according to the exchange filing.

Hancock took a substantial stake in the world’s second-biggest rare earths producer outside of China, US rare earths producer MP Materials said earlier this month.

Lynas and MP Materials ended talks over a potential merger in February.

“This news could reinvigorate speculation regarding a ‘rare-earths mega-merger’ between Lynas and MP,” broker Canaccord said in a note yesterday.

Lynas mines rare earths at its Mount Weld mine in Western Australia, which are shipped to Malaysia for processing.

It is building out processing facilities in the United States for the highly magnetic metals that are critical to wind turbines, electric vehicles and missiles.

Rinehart is Australia’s richest person, with a fortune made from iron ore.

Hancock has been aggressively acquiring stakes in lithium miners, thwarting a deal by top US lithium chemicals maker Albemarle for Australia’s Liontown last year.

More recently, she has turned her attention to rare earths.

Hancock’s investments include a 6.17% stake in Brazilian Rare Earths and a 9.14% holding in Arafura Rare Earths, according to LSEG data.

 - Reuters