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Commodities

Pentagon to fund rare-earth refinery by Australia's Lynas

Washington seeks to reduce reliance on China

A Lynas mine in Western Australia: Rare-earth elements are mined worldwide, but refining is largely handled in China. (Photo courtesy of Lynas)

SYDNEY -- Australian rare-earth miner Lynas will receive funding from the U.S. Defense Department for a planned processing plant in Texas, a project that Washington hopes will lessen its reliance on China for strategically important materials.

The funding will let Lynas and American partner Blue Line "complete a detailed market and strategy study plus detailed planning and design work for the construction," the Australian company said Monday. The amount was not disclosed, though Lynas has estimated the cost of this initial stage at 2 million Australian dollars to AU$3 million ($1.42 million to $2.13 million).

Rare-earth metals are used in motors for electric vehicles and appliances, as well as radar and other defense equipment. Though they are mined around the world, including at Lynas facilities in Australia, the work of separating and refining the 17 types of rare-earth elements is largely handled in China.

Lynas produces light rare earths, which include praseodymium and neodymium, at a plant in Malaysia. The Texas refinery will handle heavy rare earths such as dysprosium. Once completed, the plant is expected to be the first facility of its kind outside China.

Heavy rare earths are used in magnets for high-performance motors, among other applications, and are in demand in the defense industry. As tensions escalate between China and the U.S., Washington seeks to source what it can from elsewhere.

The U.S. relies on China for 80% of its imports of rare earths. President Donald Trump's administration has announced plans to support domestic rare-earths mines and processing facilities.

Other buyers, such as Japan, also could benefit from lower geopolitical risk in their supply chains. Lynas supplies about 30% of the rare earths used in Japan.

Through its Mount Weld mine in Western Australia, Lynas controls one of the world's most concentrated deposits of rare earths. As the U.S. and China butt heads over a variety of issues, Lynas has become a key alternative supplier of rare earths.

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