Home Americas US boosting rare earth element processing capacity with $30M contract

US boosting rare earth element processing capacity with $30M contract

Pentagon building
Photo: US defense ministry

The US defense department has awarded Lynas Rare Earths Ltd, the largest rare earth element mining and processing company outside of China, a $30.4 million contract to set up a light rare earth elements (LREE) separation facility in Hondo, Texas.

The agreement aims to establish domestic processing capabilities for LREEs, which 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.

The contract award is the latest in a series of measures taken to reduce the US dependence on China for heavy rare earths.

Upon completion of this project, if successful, Lynas will produce approximately 25 percent of the worlds’ supply of rare earth element oxides.

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 US 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 defense department has taken in recent years to ensure supply and strengthen defense supply chains. The award to Lynas follows three previous DPA Title III awards to rare earth element producers announced in November of 2020.