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US approves Australian company to operate rare earths facility

(ATF) The Pentagon said on February 1 it had awarded $30.4 million to an Australian company to build a Texas facility for processing rare earths used to make weapons, electronics and other goods. It was one of two deals the US military sealed Down Under this week.

China is the world’s largest producer of rare earth minerals and has threatened to stop their export to the United States, fuelling a push inside the US government to seek alternative suppliers and boost domestic production.

Lynas Rare Earths, based in Western Australia, will process so-called light rare earths, the commonest type often found in consumer goods such as cellular phones for the US Department of Defense.

Amanda Lacaze, Lynas’ chief executive, said the company was pleased to have been selected, adding the plant “will ensure the US has a secure domestic source of high-quality separated light rare earth materials.

This is the second award Lynas has received from the Pentagon. Last year, the company and Texas-based Blue Line Corp received funding for production of so-called heavy rare earths, a less-common type of the mineral elements used in weaponry.

Last year, Lynas Corp secured US government funding to design a $36 million processing plant, which was held up after Congress members argued such a strategic contract should be awarded only to domestic companies. But fear of a Chinese stranglehold on rare earth processing forced them to relent.


Both facilities are planned for Hondo, about 70km west of San Antonio. Lynas aims to ship rare earths from its mine in Mt Weld, Western Australia, for final processing in Texas. The company said it will produce a quarter of the globe’s demand for rare earths when the facilities are operational.

The Mt Weld central lanthanide deposit is one of the highest grade rare earth deposits in the world, the company said. The area also has deposits of niobium, tantalum, titanium, zirconium and phosphate.

Lynas shares rose nearly 2% in trading on February 2 to A$4.915.

It is the second victory at the Pentagon for Australian companies this week. The US Department of Defense also awarded a contract worth $230 million to Brisbane-based biotech firm Ellume to ramp up production of its Covid-19 home testing kits.

The tests detect fragments of the virus from a nasal swab that can be performed in 15 minutes with results reported via a smartphone app. It can be purchased without a prescription in the US.

Ellume founder and chief executive Sean Parsons said the company would construct a US manufacturing plant and deliver 8.5 million tests for federal use.

With reporting by Reuters


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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.


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