The United States Department of Defence (DoD) and Lynas Rare Earths have just finalised the terms of a revised contract for the development of Lynas Rare Earths’ heavy rare earth processing facility in Texas.
The United States Department of Defence has awarded Lynas USA LLC, a wholly owned subsidiary of Lynas Rare Earths Ltd (ASX: LYC, OTC: LYSDY), a follow-on contract for the construction of the Heavy Rare Earths component of the Lynas U.S. Rare Earths Processing Facility in Texas.
The revised agreement is an expenditure-based contract, and it stipulates that Lynas would be compensated for all of its construction expenditures that can be appropriately assigned. The current budget for the Project includes a contribution from the United States Government in the amount of roughly $258 million US dollars. This represents a jump over the estimated US$120 million that was announced back in June of 2022. The revised contract is the result of extensive design work as well as cost changes that have been made since the first design was finished.
Rare earths are vital components of cutting-edge technologies used in both civilian and military settings. Lynas Rare Earths and the Department of Defence (DoD) came up with this initiative to provide a reliable supply of rare earths for the growing American tech sector and for the defence of the country and its allies. When it is finished, this project will be the only one of its kind outside of China that is capable of manufacturing heavy rare earths on a commercial scale.
The Industrial Base Analysis and Sustainment (IBAS) Programme of the United States Government is in charge of funding this contract in order to encourage the growth of a rare earth supply network in the United States.
Property for the New Lynas Rare Earths Facility has been Acquired
The acquisition of a 149-acre Greenfield site in Seadrift, Texas, by Lynas Rare Earth has been successfully completed. The property, which is situated within a pre-existing industrial zone and was acquired from Union Carbide Corporation, a wholly owned subsidiary of The Dow Chemical Company, was once used for manufacturing purposes. Because of its close access to a highly skilled labour force, potential consumers, infrastructure, and logistics, this location was chosen.
This expansive location is going to make it possible to co-locate the integrated Heavy Rare Earths and Light Rare Earth separation plants as well as potential future growth prospects including downstream processing and recycling, which will help to build a circular supply chain that extends from the mine itself to the magnet.
It is anticipated that Lynas’ United States Rare Earths Processing Facility in Texas will begin serving both Department of Defence (DoD) and commercial customers sometime during the fiscal year 2026 (1 July 2025 – 30 June 2026).
Once the Kalgoorlie Rare Earths Processing Facility in Western Australia is up and running, it will supply the Facility with raw materials from the Lynas Mt Weld rare earths mine. Rare earth minerals can be found in both light and heavy forms in Mt. Weld, which has earned it the reputation of being a top-tier source. The United States Facility will have the capability to process feedstock derived from additional sources if and when such feedstock becomes available and is deemed suitable for processing.
Amanda Lacaze, Chief Executive Officer and Managing Director of Lynas Rare Earths, made the following comment:
We are delighted to work with the U.S. DoD to deliver our U.S. Heavy Rare Earths separation plant in Texas, which is a key pillar of Lynas Rare Earth growth strategy. This further support by the DoD demonstrates the priority being given to developing robust and resilient rare earth supply chains.
Our Heavy Rare Earths separation plant will be the first of its kind outside China and will help to establish a globally significant, safe and environmentally responsible rare earths supply chain. Lynas is the only commercial scale source of separated rare earths outside of China and our expertise makes us the ideal partner for the DoD as it addresses supply chain vulnerabilities and strengthens national security.
