Lynas awarded $120M contract to build commercial Heavy Rare Earth facility

June 15, 2022

Lynas Rare Earths Ltd, headquartered in East Perth, Australia, has announced that its wholly owned subsidiary, Lynas USA LLC, has signed a follow-on contract for approximately US $120 million with the US Department of Defense (DoD) to establish a commercial Heavy Rare Earths (HRE) separation facility in the United States which is said to be the first of its kind.

This mutually beneficial contract supports Lynas in establishing an operating footprint in the United States, including the production of separated Heavy Rare Earth products to complement its Light Rare Earth product suite. As a result, the US industry is hoping to secure access to domestically produced HREs which cannot be sourced today, yet which are essential to the development of a robust supply chain for future-facing industries including electric vehicles, wind turbines and electronics.

Phase 1 of the US-based HRE facility was announced in July 2020 and, since, Lynas has worked closely with the DoD to reach this point. Construction costs for the HRE capability as submitted in June 2021 are fully covered by this DoD contract, which is sponsored and funded by the US DoD Industrial Base Analysis and Sustainment (IBAS) programme.

Lynas has expressed its intention to co-locate the Heavy Rare Earths separation facility with the proposed Light Rare Earth separation facility (announced on 22 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 and is targeted to be operational in the financial year 2025. Feedstock for the facility will be a mixed Rare Earths carbonate produced from material sourced at the Lynas mine in Mt Weld, Western Australia. Lynas will also work with potential third-party providers to source other suitable feedstocks as they become available.

“The development of a US 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 US Government but also reinvigorating the local Rare Earths market,” stated Lynas Rare Earths Amanda Lacaze, CEO and Managing Director, Lynas Rare Earths. “This includes working to develop the Rare Earths supply chain and value-added activities.”

“The US government’s selection of Lynas for this strategic contract reflects our proven track record in Rare Earths production,” she continued. “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.”

Lacaze concluded, “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 US manufacturers as we progress our plans for the facility.”

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