News: LYC Australia's Rinehart takes stake in Lynas Rare Earths

MELBOURNE, April 17 (Reuters) - Australia's richest person, Gina Rinehart, become a substantial shareholder in Lynas Rare Earths, (LYC) the largest producer of rare earths outside of China, an exchange filing showed late on Tuesday.

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 filing.

Hancock took a substantial stakeholding in the world's second-biggest rare earths producer outside of China, U.S. rare-earths producer MP Materials MP.N , MP 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 on Wednesday.

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 U.S. lithium chemicals maker Albemarle for Australia's Liontown (LTR) last year.

More recently she has turned her attention to rare earths. Hancock's investments include a 6.17% stake in Brazilian Rare Earths (BRE) and a 9.14% holdings in Arafura Rare Earths (ARU) , according to LSEG data.