US War Dept firms rare earths footing
- 15 March 2026
Australian rare earths producer Lynas Rare Earths’ latest “strategically important” deal with the US Department of War reinforces its position as a “core ex-China supplier to Western markets”, according to a US investment bank.
Morgan Stanley has flagged Lynas’ binding letter of intent signed with the US DoW to supply RE oxides as a strengthening of their existing relationship that lays the groundwork for future supply agreements, including for heavy rare earths. The current LOI has a US$96 million allocation for a mix of neodymium and praseodymium (NdPr) – light REs – and HEs, to be supplied over four years.
It has the same US$110/kg NdPr floor price Lynas agreed with Japanese partner, Japan Australia Rare Earths (JARE), in an updated supply pact announced earlier this month.
Morgan Stanley said the new LOI replaced Lynas’ previous DoW arrangement, linked to construction of its Seadrift rare earths plant in Texas, where permitting and wastewater management issues had created uncertainty around production timing. Lynas had flagged the risk and discussions about securing commercially acceptable offtake from existing operations in Western Australia and Malaysia, “which this LOI now formalises”.
Lynas CEO Amanda Lacaze said the company aimed to finalise a definitive agreement “in due course”. The “mutually beneficial arrangement” would ensure the US defence industrial base continued to have access to light and heavy rare earth oxides that were essential for modern manufacturing.
Lacaze said Lynas’ new offtake deal with JARE to supply 5000 tonnes per annum of NdPr for no less than $110/kg extended a 15-year alliance to at least 2038. It would “support both Japanese industry and the continued growth and development of Lynas”.
“This new agreement will ensure continued reliable supply of rare earth products that are strategically important to Japanese industry and its global market,” she said.
Lynas and Japan Organisation for Metals and Energy Security (JOGMEC) and Sojitz Corporation-backed JARE have also signed a memorandum of understanding to to create a framework for broader cooperation across the RE value chain, including at the exploration stage.
Lacaze said the MoU aligned with Lynas' “add resource and scale” objective in its Towards 2030 growth strategy, aimed at expanding resources at the Mt Weld carbonatite deposit in WA, opening up new exploration fronts at Mt Weld and sourcing new complementary feedstock.
“The MoU will bring together Lynas’ mineralogy and metallurgy expertise and world-class Mt Weld resource with the technical, financial and commercial expertise of our partners at JOGMEC and Sojitz Corporation,” Lacaze said.
