DoD Funds for Lynas’ US Heavy Rare Earth Plant

Lynas has secured a $120 million contract from the U.S. Department of Defense (DoD) to build a heavy rare earth separation plant in the United States. Lynas wants to build the plant on the same site in Texas as the proposed light rare earth separation plant. Construction costs for the heavy rare earth plant are being covered entirely by a $120 million contract funded by the US DoD Industrial Base Analysis and Sustainment program.

The company completed Phase I of the design and engineering work for the project in the second quarter of last year. However, the latest funding marks a significant increase over the funding awarded for Phase I, which was estimated at several million dollars.

Lynas will supply the mixed rare-earth carbonate feedstock from its Mt Weld mine in Western Australia, but also plans to work with third-party suppliers. Mt Weld currently supplies about 15 percent of the global supply of light rare-earth neodymium and praseodymium oxide needed for high-performance neodymium-iron-boron (NdFeB) magnets. But the deposit also contains some heavy rare earths, and the company estimates that it may contain about 6,600 tons of heavy rare earth dysprosium.

The joint project to build a lightweight rare earth separation plant in the United States was announced early last year. The cost will be split 50-50 between Lynas and the Department of Defense. The DoD funding initially estimated at $30 million, is being provided under the U.S. Title III Defense Production Act.

This latest development marks the second U.S. government-sponsored project to establish a heavy rare earths separation facility in the United States. In February, the DoD awarded a $35 million contract to U.S. mining company MP Materials to establish a processing and separation heavy rare earth plant at the site of MP Materials' Mountain Pass light rare earth mine in California, with the ability to accept third-party feeds.

Mountain Pass provides approximately 10-15% of the global supply of light rare earth oxides contained in unseparated concentrates. In May, the company said it expects light rare earth separation capacity to be mechanically processed by the end of the year and to normalize production operating rates.

Lynas operates a large light rare earth separation plant in Malaysia with a capacity of 26,000 tons/year of rare earth oxides and 7,200 tons/year of neodymium-praseodymium oxides. The U.S. does not currently have commercial-scale separation capacity for light rare earths, which are key materials for high-performance magnets used in electric vehicle engines, wind turbines and consumer electronics, and the addition of heavy rare earths dysprosium and small amounts of terbium can significantly improve the performance of NdFeB magnets at high temperatures.

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