Lynas wins Pentagon contract

ASX-listed Lynas Rare Earths has entered into an agreement with the US Department of Defense to build a commercial light rare earths separation plant in Texas.

Formerly known as Lynas Corporation, the company was renamed at the end of last year and is the only large non-Chinese commercial producer of separated rare earths product.

Once operational, the US plant is expected to produce about 5,000 tonnes per annum of rare earths product, including about 1,250tpa of neodymium and praseodymium.

Rare earth materials are used in the manufacturing of electric vehicles and other electronics.

Lynas confirmed the plant would likely be built in Texas and could receive material directly from its cracking and leaching plant being developed in Kalgoorlie.

The agreement was facilitated through the Defense Production Act program run by the US Department of Defense office for industrial policy.

Lynas said the project formed part of the company’s 2025 growth plan but its completion would be scheduled in accordance with the Department of Defense timetable.

The growth plan was announced in May 2019 alongside a $500 million commitment to the expansion of processing operations, including at existing sites in Western Australia and Malaysia.

Today’s agreement builds on a contract Lynas signed with the US Department of Defense in July 2020 for work on a heavy rare earth separation facility also in Texas. This plant will receive material from Lynas’ Mt Weld mine.

The pre-existing contract also allows for the potential to house an additional light rare earth separation facility.

Lynas managing director Amanda Lacaze said she was excited to bring rare earths production the US.

“While demand for rare earth materials continues to grow, COVID-19 has exposed the risks within global supply chains of the single sourcing of critical materials,” she said.

“This agreement is consistent with the US Government’s commitment to rebuild the domestic industrial base, while working effectively with partner nations.

“The Texas plant will ensure the US has a secure domestic source of high quality separated rare earth materials.”

At market close, Lynas was trading 13.7 per cent higher to $5.56 per share.