Lynas Rare Earths Ltd. (LYSDY.US) has signed a binding letter of intent to supply rare earth oxides to the U.S. Pentagon over a four-year period. The company stated in a Monday announcement that the agreement is valued at $96 million and covers both heavy and light rare earth products. This letter of intent "establishes a framework for finalizing the supply agreement." These critical minerals are widely used in wind turbines, electric vehicle motors, and even advanced military equipment, playing a vital role in ensuring national security and supply chain resilience. The announcement also specified a minimum price of $110 per kilogram for neodymium-praseodymium oxide in this cooperation. Lynas CEO Amanda Lacaze stated, "Through this agreement, the U.S. defense industrial base will have continued access to light and heavy rare earth oxides essential for modern manufacturing." China holds a near-monopoly position in the global rare earth supply chain, while Lynas is one of only two major rare earth miners outside of China. Currently, the company operates a mine and associated processing plant in Western Australia and also has a production facility in Malaysia. Lynas mentioned in its statement that it plans to build a heavy rare earth processing plant in Seadrift, Texas, but noted there remains "significant uncertainty" regarding the project's commencement. Notably, this agreement comes just one week after Lynas signed an offtake agreement with Japan Australia Rare Earths BV, which represents Japanese companies in business negotiations. That agreement, valid until 2038, stipulates an annual supply of at least 5,000 tons of neodymium-praseodymium oxide, also with a minimum price of $110 per kilogram.
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