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Lynas awarded $120m DOD contract to build commercial heavy rare earths facility in US

Australia’s Lynas Rare Earths Ltd (ASX: LYC, OTC:LYSDY)  announced Monday that its wholly owned subsidiary, Lynas USA LLC, has signed a follow-on contract for approximately $120 million with the U.S. Department of Defense to establish a first of its kind commercial Heavy Rare Earths (HRE) separation facility in the United States.

The contract enables Lynas to establish an operating footprint in the United States, including the production of separated heavy rare earth products.

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

The 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 supply chain for future facing industries including electric vehicles, wind turbines and electronics.

Lynas worked with the DoD on the Phase 1 contract for a U.S. based Heavy Rare Earth separation facility, announced July 2020,  and said it has now reached agreement for a full-scale commercial HRE facility.

Lynas plans to co-locate the Heavy Rare Earths separation facility with the proposed Light Rare Earth separation facility which is sponsored and half funded by the U.S. DoD Title III, Defense Production Act office.

The facility is expected to be located within an existing industrial area on the Gulf Coast of the State of Texas and targeted to be operational in 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 3rd party providers to source other suitable feedstocks as they become available.

 “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,” Lynas CEO Amanda Lacaze said in the media statement.

“This includes working to develop the Rare Earths supply chain and value added activities.”

“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.”

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