Japanese trading house Sojitz and state-controlled energy agency Jogmec have secured further heavy rare earths (HRE) supplies by additional investment in Australia-based Lynas Rare Earths.
Sojitz and Jogmec have made an additional A$200mn ($132mn) investment through their co-funded Japan Australia Rare Earth (Jare) in return for Lynas supplying up to 65pc of the dysprosium and terbium it produces. Jare in September 2022 invested $9mn in Lynas' expansion project to increase its Mount Weld mining capacity in Western Australia to 12,000 t/yr from 7,000 t/yr by 2024 to meet growing demand.
The actual offtake volume in the latest deal was undisclosed but the combined amount accounts for around 30pc of Japan's domestic HRE demand, a Sojitz representative told Argus. Japan's HRE demand data are not publicly available because "we don't want to let China know that", a representative of Japan's trade and industry ministry told Argus.
Dysprosium and terbium enhance the heat resistance of magnets used in such products as motors and wind turbines. The supply agreement with Lynas can reduce Japan's high dependence on China, according to Sojitz and Jogmec. Japan has been working to diversify its rare earths supplies as its imports have climbed in line with rising output of electric vehicles, wind turbines and other products that use permanent magnets.
Lynas may consider selling more than the 65pc of rare earths it produces to Jare, "subject to any agreement with the US government and to the extent there is no opportunity loss to Lynas", it said.
Jare also extended an existing supply agreement with Lynas on neodymium-praseodymium (NdPr). The Japanese consortium can purchase up to 7,200 t/yr of NdPr when Lynas produces less than 9,600 t/yr. If production exceeds this level it will consult "in good faith to agree the terms of availability for the Japanese market", Lynas said. It produced 1,508t of NdPr during October-December 2022.
