On Tuesday, Australia’s Lynas Rare Earths (ASX: LYC) announced a revised agreement with Japanese company JARE, securing the supply of 5,000 tonnes of neodymium-praseodymium (NdPr) annually at a $110-per-kg price floor until 2038. This deal also includes the purchase of 50% of Lynas’ heavy rare earths production, bolstering Lynas shares by 16% to A$20.59 and boosting the company’s market capitalization to A$20.7 billion (approximately $14.8 billion).
The agreement aims to insulate JARE from fluctuations in rare earth pricing linked to China, amidst Beijing’s ongoing export controls. Lynas, which became the first producer of separated heavy rare earth oxides outside China last May, has produced 10,908 tonnes of rare earth oxides as of 2024, with 5,655 tonnes being separated NdPr oxides.
Since implementing a similar offtake agreement in 2011, Japan has reduced its reliance on Chinese rare earths from 90% to 60-70%, highlighting the strategic importance of this new deal for both Japanese industry and Lynas’s growth.
