Lynas, Blue Line plan US RE separation project

Australia's Lynas has agreed to an initial deal with Texas-based Blue Line aimed at developing a rare earths separation facility in the US state.

The joint venture to set up a facility at Hondo in Texas will initially focus on heavy rare earths separation, such as dysprosium and terbium. A later focus will include lighter rare earths such as neodymium, praseodymium and lanthanum.

Rare earths separation capacity has been absent in the US for several years since Molycorp went into bankruptcy and the Mountain Pass mine was sold to a consortium of new owners, including China's Shenghe Rare Earths. The Lynas-Blue Line joint venture aims to fill this gap.

The joint venture will allow US companies to have continued access to rare earths products by providing a US-based source. The project, which is expected to be majority owned by Blue Line, will be the only large-scale producer of separated medium and heavy rare earths outside of China.

Rare earths have applications in the automotive, electronic, wind turbine and oil and gas refining industries with uses including permanents magnets, catalytic converters, batteries, electronic components, polishing powders and water treatment chemicals.

Lynas has a mine at Mount Weld in Western Australia and separation and processing facilities in Malaysia. Rare earth oxide output of 5,444t during January-March was 23.1pc higher than in the previous quarter, while sales of 5,030t resulted in revenue growing by 26.8pc to A$101.3mn. Lynas earlier this year rejected a A$1.5bn ($1.06bn) cash takeover offer from Australian industrial conglomerate Wesfarmers.

Blue Line is a processor and supplier of rare earths products and materials in the US. Several items for the development of separation facility at the Hondo site have already been installed, including tunnel furnaces.