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An Australian company has signed a contract with the US Department of Defense for the production of rare earth elements

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U.S. industry will provide access to domestically produced heavy rare earth elements

An Australian company has signed a contract with the US Department of Defense for the production of rare earth elements

Australian company Lynas Rare Earths announced on Monday that its subsidiary Lynas USA LLC has signed an approximately $120 million follow-up contract with the US Department of Defense to establish a first-of-its-kind commercial heavy rare earth (HRE) separation facility in the US.

The contract allows Lynas to establish an operating area in the United States, including the production of heavy rare earth separation products.

Lynas is currently processing rare earths at its $800 million Lynas Advance Materials Plant (LAMP) in Kuantan, Malaysia.

U.S. industry will provide access to domestically produced heavy rare earths that cannot be obtained today and are needed to develop the supply chain for future industries, including electric vehicles, wind turbines and electronics.

Lynas has been working with the Department of Defense on a Phase 1 contract for a heavy rare earth separation facility in the United States, announced in July 2020, and stated that an agreement has now been reached for a full-scale commercial HRE facility.

Lynas plans to co-locate a heavy rare earth separation facility with a proposed light rare earth separation facility sponsored and semi-funded by the US Department of Defense Title III Defense Production Act.

The facility is expected to be located in an existing industrial estate on the Gulf Coast of Texas and is expected to be operational in fiscal year 2025.

The raw material for the facility will be a mixed rare earth carbonate sourced from material obtained from the Lynas mine in Mount Weld, Western Australia. Lynas will also work with potential third party suppliers to find other suitable raw materials as they become available.

"The construction of a heavy rare earth separation plant in the US is an important part of our accelerated growth plan, and we hope to not only meet the US government's rare earth needs, but also revitalize the local rare earth market," said Lynas CEO Amanda Lacaze. says the media report.

"This includes work to develop the rare earth supply chain and value-added activities."

"The Department of Defense's decision to fully fund the construction of a heavy rare earth facility demonstrates the priority the US government places on ensuring the sustainability and environmental responsibility of supply chains for these critical materials."

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