Lynas USA LLC, has signed a follow-on contract for approximately US$120 million with the U.S. Department of Defense (DoD) to establish a commercial heavy rare earths (HRE) separation facility in the Texas, the company announced on June 14.

Lynas is the world's only processor of rare earths outside China, and the contract with its U.S. subsidiary builds on 'Phase 1' funding for a facility announced in July 2020, Reuters reported.

The project, for which the Pentagon provided initial funding, is expected to be built in an industrial area on the Texas Gulf Coast and be operational in financial year 2025, the company said.

This contract supports Lynas to establish an operating footprint in the United States, including the production of separated heavy rare earth products to complement its light rare earth product suite. As a result, U.S. industry will secure access to domestically produced heavy rare earths which cannot be sourced today and which are essential to the development of a robust supply chain for future facing industries including electric vehicles, wind turbines and electronics.

Construction costs for the HRE capability as submitted in June 2021 are fully covered by this DoD contract, which is sponsored and funded by the U.S. DoD Industrial Base Analysis and Sustainment (IBAS) program.

Feedstock for the facility will be a mixed Rare Earths carbonate produced from material sourced at the Lynas mine in Mt Weld, Western Australia. Lynas will also work with potential third party providers to source other suitable feedstocks as they become available.

“The development of a U.S. Heavy Rare Earths separation facility is an important part of our accelerated growth plan and we look forward to not only meeting the rare earth needs of the U.S. Government but also reinvigorating the local Rare Earths market. This includes working to develop the Rare Earths supply chain and value added activities,” Lynas Rare Earths CEO and Managing Director Amanda Lacaze said in a statement.

“This contract is an excellent example of Indo-Pacific cooperation to meet supply chain challenges and Lynas looks forward to collaborating with the DoD, the State of Texas and U.S. manufacturers as we progress our plans for the facility,” said Ms. Lacaze.