Australia

CEO Amanda Lacaze said the deal will provide the Japanese industry with a “reliable supply” ⁠of rare earth products.

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Australia’s Lynas Rare Earths has revamped its supply agreement with Japan Australia Rare Earths, securing a firm annual commitment for 5,000 tonnes of neodymium-praseodymium, a key rare-earth magnet material.

Lynas, world’s largest rare earth producers outside China, will set aside ‌75 per cent of ⁠its ⁠heavy rare earth oxide output for Japanese industry, with Japan Australia Rare Earths committing to buy half of the firm’s total heavy rare earth production.

JARE, co-owned by state-run Japan Organisation for Metals and Energy Security and Sojitz Corp, had provided Lynas with A$200 million in 2023 to boost production of ⁠light and heavy ‌rare earth materials. CEO Amanda Lacaze said the deal will provide the Japanese industry with a “reliable supply” ⁠of rare earth products.

The deal keeps Lynas’ total supply capacity at up to 7,200 tonnes per year through 2038, but locks in a $110 per kilogram floor price for the 5,000 tonne annual commitment. If prices rise above $150 per kg, JARE gets 30 per cent of the gain capped at $10 million per year.

“Sales above this minimum ‌volume will be by mutual agreement and at no opportunity loss to Lynas,” the company said in a statement.

Rare earths, and the ⁠magnets made from them, are embedded in small but critical amounts across devices from iPhones and washing machines to F-35 jets, and power everything from EVs to military systems.

The deal comes at a time when Washington has been pushing to secure critical minerals and reduce reliance on China, which produces around 90 per cent of the world’s rare earth magnets.