Lynas Signs Updated Contract for Texas Facility

by | 1. Aug 2023 - 10:01 | Economy

The Department of Defense raised its contribution to $258 million.

Australian mining group Lynas has announced that its wholly-owned U.S. subsidiary Lynas USA LLC has signed an updated contract with the U.S. Department of Defense (DoD) to construct a Heavy Rare Earths separation plant in Texas. According to the company’s press release (PDF), the new arrangement is an expenditure-based contract under which all of Lynas’ properly allocable construction costs will be reimbursed, putting the projected contribution of the DoD to approximately $258 million. This is more than double what the old agreement covered with $120 million that was signed last year.

Financed by the U.S. Government’s Industrial Base Analysis and Sustainment (IBAS) Program, the project aims to enhance the supply chain resilience for responsibly produced rare earths. It is a part of the goal to develop a U.S. rare earth supply chain. Feedstock for the facility will come from the company’s Mt Weld deposit and Kalgoorlie facility in Western Australia, Lynas added.

Rare earths are vital inputs for advanced technologies in both commercial and defense applications from clean energy to traction motors. According to Lynas, the new facility will contribute to the U.S. high-tech industry and address national security needs. Furthermore, the company emphasized that it would be the only scale producer of separated heavy rare earths outside China.

Following yesterday’s announcement of a 47 percent quarterly decline in revenue, the new contract is a more beneficial development for the Australian mining group.

Photo: iStock/jasonbennee

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