New U.S. Facility to Produce 25% of World Rare Earth Oxides, Cut Reliance on China

Lynas Rare Earths Ltd, the largest rare earth element mining and processing company outside of China, has been awarded a Defense Production Act (DPA) Title III technology investment agreement to establish domestic processing capabilities for light rare earth elements (LREE).

Specific actions include stockpiling, implementing Defense Federal Acquisition Regulations Supplement (DFARS) rules to transition defense supply chains to non-Chinese sources of rare earth element magnets.

Re-establishing domestic heavy rare earth element processing, domestic neodymium-iron-boron magnet production, and accelerating the development of new rare earth element processing technologies.

LREEs are critical to numerous defense applications, including precision-guided munitions.  Upon completion of this project, Lynas will produce approximately 25 percent of the worlds’ supply of rare earth element oxides, a U.S. DoD release said Monday.

Through its wholly-owned subsidiary Lynas USA LLC, Lynas will establish LREE separation capacity in Hondo, Texas. Under the technology investment agreement, the Department of Defense is contributing $30.4 million to the project.

The Hondo, Texas facility will complement Lynas’ existing Australian and Malaysian operations and is expected to be co-located with the proposed Heavy Rare Earths separation facility.

This award aligns with the U.S. government’s strategy to ensure secure and reliable supplies of critical minerals under Executive Order 13817 and follows a series of rare earth element actions the DoD  has taken in recent years to ensure supply and strengthen defense supply chains.

The award to Lynas follows three previous DPA Title III awards to rare earth element producers announced in November of 2020.

China had earlier threatened to choke rare earth materials supply to U.S. defence firms in response to arms sales to Taiwan but is yet to act on its threat.