Feb 5 (Reuters) - Australian rare earth miner Lynas Rare Earths said that it has held confidential discussions with MP Materials Corp regarding a potential transaction, even as these discussions are not ongoing.

This comes after the steep fall in rare earth prices after demand in China fell due to a protracted property crisis, as a result of which the company's second-quarter revenue fell sharply, missing analysts' estimates.

Lynas is the world's largest producer of rare earths outside China.

"Lynas is implementing a strong organic growth plan," the company said in a statement, "...continues to seek opportunities to use our proven expertise to build scale."

The rare earth miner has currently market capitalisation of about $3.55 billion, while its New-York listed peer is valued at $3.06 billion.

(Reporting by Archishma Iyer; Editing by Diane Craft and Lisa Shumaker)