DOD Announces Rare Earth Element Award to Strengthen Domestic Industrial Base

 Feb. 1, 2021

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Lynas Rare Earths Ltd, the largest rare earth element mining and processing company outside of China, has been awarded a Defense Production Act (DPA) Title III technology investment agreement to establish domestic processing capabilities for light rare earth elements (LREE).  LREEs are critical to numerous defense and commercial applications, including petroleum refining, glass additives, and magnets used in electric vehicle drivetrain motors and precision-guided munitions.  Upon completion of this project, if successful, Lynas will produce approximately 25 perfect of the worlds’ supply of rare earth element oxides. 

Through its wholly-owned subsidiary Lynas USA LLC, Lynas will establish LREE separation capacity in Hondo, Texas. Under the technology investment agreement, the Department of Defense is contributing $30.4 million to the project. The Hondo, Texas facility will complement Lynas’ existing Australian and Malaysian operations and is expected to be co-located with the proposed Heavy Rare Earths separation facility. 

This award aligns with the U.S. government’s strategy to ensure secure and reliable supplies of critical minerals under Executive Order 13817 and follows a series of rare earth element actions the Department of Defense has taken in recent years to ensure supply and strengthen defense supply chains. Specific actions include stockpiling, implementing Defense Federal Acquisition Regulations Supplement (DFARS) rules to transition defense supply chains to non-Chinese sources of rare earth element magnets, launching engineering studies with the Industrial Base Analysis and Sustainment program focused on re-establishing domestic heavy rare earth element processing, partnering with industry to re-establish domestic neodymium-iron-boron magnet production, and leveraging Small Business Innovation and Research and Rapid Innovation Funds to accelerate the development of new rare earth element processing technologies.  The award to Lynas follows three previous DPA Title III awards to rare earth element producers announced in November of 2020.