Lynas Rare Earths’ United States subsidiary has signed a follow-on contract with the US Department of Defence (DoD).
The contract concerns the construction of the Heavy Rare Earths (HRE) component of its US rare earths processing facility in Texas.
Lynas previously worked with the DoD on the Phase 1 contract for a US-based HRE separation facility in July 2020, and it first secured the US DoD contract for the rare earths facility in June 2022.
The updated contract is an expenditure-based contract that states all of Lynas’ properly allocable construction costs will be reimbursed.
$US258 million ($390 million) is currently allocated to the project courtesy of the US Government, which is an increase from the approximate $US120 million ($181 million that was announced in June 2022.
The updated contract follows detailed design work and cost updates since the original design was completed. On completion, this project will be the only scale producer of separated HRE outside of China.
Rare earths are critical to advance technologies in commercial and defence applications, which is why this project is expected to strengthen supply chain resilience for responsibly produced rare earths.
To support the project, Lynas has completed the purchase of a 149-acre greenfield site in Seadrift, Texas, from Union Carbide, a wholly owned subsidiary of The Dow Chemical Company. It is targeted to be operational in the 2026 financial year.
Once operational, feedstock for the facility will be sourced from the Lynas’ Mt Weld rare earths deposit and the Kalgoorlie rare earths processing facility in Western Australia.
“We are delighted to work with the US DoD to deliver our US HRE separation plant in Texas, which is a key pillar of Lynas’ growth strategy,” Lynas Rare Earths chief executive officer Amanda Lacaze said.
“This further support by the DoD demonstrates the priority being given to developing robust and resilient rare earth supply chains.”