Lynas Rare Earths Ltd (LYC.AU) saw its shares plummet 5.07% during intraday trading on Tuesday, marking a significant decline for the rare earths producer.

The sharp drop occurred amid a broad fall in Australian mining stocks, with Lynas identified as the biggest early laggard in the market. Australian stocks slipped during early trading, with the S&P/ASX 200 Benchmark Index declining 0.1%, creating negative sentiment across the mining sector.

Despite Lynas announcing a strategic partnership with South Korea's JS Link to develop a magnet factory in Malaysia—a deal that includes a A$50 million investment and a long-term supply agreement until 2038—the positive company-specific news was overshadowed by broader market weakness affecting mining stocks.