London, June 12th (Argus) - Amanda Lacaze, the CEO and Managing Director of Lynas Rare Earths, stated at the annual meeting of the Frankfurt Rare Earth Industry Association (REIA) on June 11th that more attention must be paid to the demand side of the rare earth value chain outside China in order to accelerate project development and reduce reliance on imports from China. She particularly pointed out that the industry currently places too much emphasis on the supply side, and expressed regret over this.
She said, "You can never fix a market solely through the supply side. Many policies and industries outside of China currently focus too much on the supply side rather than the demand side. Unless you address the issues on the demand side, the market cannot be fundamentally repaired."
Over the past year, following China's implementation of export controls on various heavy rare earths in April 2025, overseas investment in and government support for early rare earth mining and separation projects have accelerated.
Although the export control of rare earths may disrupt the trillion-dollar global industry and push rare earths onto the priority list of various governments, reigniting people's interest in developing non-Chinese projects, the progress has been slow. Lacaze warns that if past lessons are not learned, there is a risk of history repeating itself.
Lacaze said: "It seems that we have forgotten that what happened last year has happened before, and not just once. " She pointed out, "Many of the problems we are dealing with now are the same as those we encountered when we first started, because we have never properly resolved these issues."
So far, among the non-Chinese markets for rare earths, the only sector that has significantly changed its procurement methods is the US defense sector. Lacaze mentioned the US's "Defense Production Act" and "Defense Industrial Strategy", stating that this transformation was mainly achieved through policies.
In other fields, especially in the procurement behavior of automotive original equipment manufacturers (OEMs), it remains a pain point for the supply side. Suppliers hope to see OEMs be more willing to achieve diversified procurement and engage in closer cooperation in terms of upstream financing and pricing mechanisms.
Lacaze commented that if car manufacturers are unwilling to pay a slightly higher price for rare earth magnetic materials outside China and choose to maintain the status quo and the vulnerability of their supply chain, "then I think these car manufacturers have made many mistakes." She pointed out that the amount of rare earth contained in vehicles varies, but it is never more than a few kilograms, so although they are crucial, they only account for a very small part of the overall input cost.
Apart from the procurement activities, other participants emphasized the need to safeguard the existence of key rare earth demand segments outside China, in order to enhance the confidence of the supply side and its investors in expanding production. Lama Itani, the business development manager of Solvay's rare earth business, pointed out during the group discussion at the meeting that Europe needs to provide subsidies for the manufacturing of magnetic materials to "encourage and protect" these operations and "ensure the existence of the market".
Lacaze suggests that governments of various countries consider offering tax credits to buyers who purchase non-Chinese-made rare earth magnets. In industries where the jurisdiction of a supplier often differs from that of the buyer, tax credits can be a tricky proposal. However, she stated that providing them to international OEMs might be an effective workaround.
Lacaze stated that policy development is indeed the key to unlocking the demand for rare earths outside of China. She believes that the most influential measure so far was the setting of a price floor of $110 per kilogram (approximately 790 yuan) for praseodymium-neodymium (NdPr) by the US Department of Defense in a broader agreement with MP Materials last year. A few months later, Lynas also reached a similar price floor agreement with the Japanese-Australian Rare Earth Company (JARE).
She went on to say: "If the price floor mechanism works, no government will need to issue cheques (provide direct subsidies)." She emphasized that emerging rare earth producers have the responsibility to ensure their own competitiveness - that is, to operate at a price of $110 per kilogram for NdPr - rather than relying on government subsidies.
