Lynas Rare Earths announced that its U.S. subsidiary, Lynas USA LLC, has signed a binding letter of intent (LOI) with the U.S. government to finalize a rare earth oxide supply agreement.
Under the terms described by the company, the Pentagon will allocate about $96 million to purchase light and heavy rare earth oxide products from Lynas. The arrangement includes a floor price for neodymium-praseodymium (NdPr) oxide set at $110 per kilogram. According to Lynas, the LOI establishes the structure for a four-year supply agreement intended to support U.S. national security and supply-chain resilience objectives.
The revised offtake structure follows a mutual decision to amend the parties' earlier agreement. Lynas said the change came amid uncertainty over whether a planned heavy rare earth processing facility in Seadrift, Texas, would proceed as originally expected.
Commenting on the agreement, Lynas CEO Amanda Lacaze said: "Through this agreement, the U.S. Defense Industrial Base will continue to have access to Light and Heavy Rare Earth oxides that are essential for modern manufacturing."
The company highlighted the role of rare earths and the magnets made from them, noting that they are used in small but critical quantities across a broad range of products. "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," Lynas said.
The announcement arrives amid U.S. efforts to secure supplies of critical minerals and reduce dependence on China, which the company noted produces around 90% of the world’s rare earth magnets. Lynas identified itself as the largest rare earth producer outside China.
The LOI is presented as a framework to be finalized into a multi-year supply agreement. The company did not provide additional financial details beyond the Pentagon allocation and the stated NdPr floor price in its initial disclosure.
Background
The new offtake framework replaces elements of an earlier pact after both parties agreed to revise terms because of uncertainty around the Seadrift processing facility. The LOI is positioned to align the supply arrangement with U.S. defense and supply-chain priorities over the next four years.
What remains to be finalized
The LOI itself sets out a framework rather than a completed long-term contract; finalization of the supply agreement remains subject to the parties completing the terms outlined in the letter of intent.