Sydney, March 16th (Argus) - Australian producer Lynas Rare Earths and the US Department of Defense (DoD) have signed a binding letter of intent to reach a supply agreement for light and heavy rare earth oxides.
Lynas stated on March 16th that the company may sell light and heavy rare earth oxides worth $96 million to the DoD within four years. The base price for praseodymium and neodymium sales is $110 per kilogram.
The company said that Lynas and the DoD will finalize a transaction based on the letter of intent and discuss further agreements for the supply of heavy rare earth oxides.
Less than a week ago, Lynas expanded its rare earth supply agreement with the Japanese joint venture Jare. Australian producer Lynas stated on March 10th that by 2038, Jare would purchase at least 5,000 tons of oxide praseodymium-neodymium at a minimum price of $110 per kilogram, accounting for 50% of Lynas' heavy rare earth production.
Lynas' recent price floor matches the 10-year minimum praseodymium-neodymium price commitment made by the US producer MP Materials to the DoD in July 2025.
From July 2025 to December 2025, the average price of Lynas' rare earth sales rose to $68.40 per kilogram (or $48.72 per pound) compared to $44.60 per kilogram in the previous year.
The DoD previously agreed to help Lynas build a heavy rare earth processing plant in Texas through a spending-based contract in 2023. However, due to wastewater permit issues, Lynas is unlikely to proceed with the project.
Lynas expanded its heavy rare earth processing capacity by expanding its refinery in Malaysia last year. The company built a neodymium and terbium separation facility in January to March 2025 and began production of these heavy rare earths in May and June respectively.
Lynas plans to further expand its heavy rare earth production capacity in Malaysia by 5,000 tons per year over the next two years. Its targets are to produce separated samarium in April, gadolinium, yttrium, and lutetium by 2028.
