Lynas sees higher rare earths prices after US backs MP Materials

Business Times

24-07-2025

[MELBOURNE] Prices of rare earths could rally further given growing demand for Western material, reflected in a recent deal by the US that has shown its resolve to rebuild the sector outside China, the CEO of top producer Lynas rare earths said.
The US Department of Defense this month agreed to a multi-billion US dollar deal to become the largest shareholder in the Australian company's peer, MP Materials, the sole US miner of the magnetic metals used in electronics, electric vehicles and aircraft engines.
As part of the deal, it offered a floor price of US$110 per kilogramme for the two most popular rare earths, a price nearly twice the current Chinese market level.
Lynas CEO Amanda Lacaze, who heads the world's largest rare earths producer outside China, said the MP Materials deal reflected the US government's determination to break Beijing's dominance and to drive investment in its own industry.
'Can (prices) go above US$110? Yes and I think the recent detail of the deal is that there would be an expectation for the government that that is likely to happen, because they have negotiated exposure to upside,' she said.
After Beijing curbed exports earlier this year, automakers panicked over a rare earths supply bottleneck, though those concerns have started to dissipate as Chinese rare earths magnets began to flow again.
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Japanese magnet makers had 'significantly increased' their output over the past quarter due to the Chinese supply shortages, and Lynas was working with them to develop automotive customers outside their home country, Lacaze said.
Lynas beat estimates for fourth-quarter revenue by 10 per cent, driven by higher selling prices across all rare earths products, and entered into a magnet manufacturing deal with South Korea's JS Link.
It received an average selling price of A$60.20 per kg, the highest since the July 2022 quarter, compared with A$42.30 per kg a year earlier.
Shares climbed as much as 4.2 per cent to A$10.57, the highest level since April 5, 2022, compared to a 0.3 per cent decline in the broader Australian mining index.
Lynas posted sales revenue of A$170.2 million (S$143.6 million) for the quarter ending Jun 30, beating a Visible Alpha consensus estimate of A$155 million by about 10 per cent according to Barrenjoey, and up from A$136.6 million a year earlier.
The company's total rare-earth oxide (REO) output for the fourth quarter was at 3,212 REO tonnes, compared with 2,188 REO tonnes reported a year ago.
Lynas also disclosed a deal with South Korean permanent magnet manufacturer JS Link to develop a permanent magnet value chain in Malaysia and said it sees the country as a key market for industry growth.
The collaboration includes plans for a 3,000-tonne neodymium magnet manufacturing facility near Lynas' advanced materials plant in Kuantan, Malaysia, it said.
Lynas will supply light and heavy rare earth materials to support production, although the non-binding agreement remains subject to finalisation. REUTERS