Australia's Lynas inks US rare earth oxide supply deal

March 16 (Reuters) - Australia's ‌Lynas Rare Earths ​said ​on Monday its unit Lynas USA LLC has signed a binding letter of intent with ‌the U.S. government to finalise a rare earth ⁠oxide supply agreement.

Under the deal, the Pentagon will allocate about $96 million ‌to buy light and heavy ‌rare earth oxide products from Lynas, with a floor price of $110 per kg for NdPr oxide, the company ​said.

Lynas said the letter of intent sets out a framework for a four‑year supply agreement supporting U.S. ⁠national security and supply‑chain resilience objectives.

The new offtake structure follows a mutual decision ​to revise the companies' earlier agreement due to uncertainty over whether the planned heavy rare ​earth processing facility in Seadrift, Texas, ‌would go ahead, it added.

"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," Lynas CEO Amanda Lacaze said.

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.

The deal ‌comes at a time when the United States has been pushing to secure critical ‌minerals and reduce reliance on China, which produces around 90% ⁠of the world's rare ‌earth magnets.

Lynas is ​the world's largest rare earth producer outside China.

(Reporting by Rajasik Mukherjee; editing by Diane Craft and Will ‌Dunham)

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