Lynas Rare Earths has wrapped up a final contract worth around $US120 million with the US Department of Defense (DoD) to build a commercial Heavy Rare Earths (HRE) separation facility in America.
The plant, which has been under planning for more than two years, will be the first of its kind when it comes on stream in the US state of Texas in 2025.
“This mutually beneficial contract supports Lynas to establish an operating footprint in the United States, including the production of separated Heavy Rare Earth products to complement its Light Rare Earth product suite,” Lynas told the ASX on Tuesday.
The deal is all about lifting the non-Chinese processing capacity for rare earths, of which Lynas is the largest producer outside of China.
“As a result, US industry will secure access to domestically produced Heavy Rare Earths which cannot be sourced today and which are essential to the development of a robust supply chain for future facing industries including electric vehicles, wind turbines and electronics.”
Lynas plans to co-locate the Heavy Rare Earths separation facility with the proposed Light Rare Earth separation facility (announced in January 2021) which is sponsored and half funded by the US DoD Title III, Defense Production Act office.
Following a detailed site selection process, the facility is expected to be located within an existing industrial area on the Gulf Coast of the State of Texas. Feedstock for the facility will be a mixed rare earths carbonate produced from material sourced at the Lynas mine in Mt Weld in WA
Lynas says it will also work with potential third-party providers to source other suitable feedstocks as they become available.
Lynas Rare Earths CEO Amanda Lacaze commented: “The development of a U.S. Heavy Rare Earths separation facility is an important part of our accelerated growth plan and we look forward to not only meeting the rare earth needs of the U.S. Government but also reinvigorating the local Rare Earths market. This includes working to develop the Rare Earths supply chain and value added activities.”
“The U.S. Government’s selection of Lynas for this strategic contract reflects our proven track record in Rare Earths production. The DoD’s decision to fully fund the construction of the Heavy Rare Earths facility demonstrates the priority that the U.S. Government is placing on ensuring that supply chains for these critical materials are resilient and environmentally responsible, and as importantly, their confidence in Lynas’ ability to execute, including access to quality feedstock and processing expertise.”
“This contract is an excellent example of Indo-Pacific cooperation to meet supply chain challenges and Lynas looks forward to collaborating with the DoD, the State of Texas and U.S. manufacturers as we progress our plans for the facility,” said Ms. Lacaze.
Lynas shares eased 0.4% to $8.53 in Tuesday’s big sell-off.
It is hard for investors to find anything negative in the Lynas announcement – it is all about a resources company securing its future and that of Australia’s share of a major set of strategic minerals.
