US DoD rare earth plant initiative stalled: Update

Includes industry reaction and Lynas light rare earth production

Australian rare earth producer Lynas — which won a US Department of Defense (DoD) tender to design a heavy rare earth separation plant — said today that the award is on hold while US domestic political issues are addressed.

Lynas, the only large producer and separator of rare earths outside China, won a US DoD tender on 22 April for phase 1 early design work for a project to build the first heavy rare earth separation plant outside China in decades, in conjunction with Texas-based separation firm Blue Line.

Without disclosing further details as to why the tender was on hold, Lynas referred to a political debate within the US "on the merits of supply from the US, US allies, and other sources".

US-based MP Materials — owner of the Mountain Pass light rare earth mine in California that currently supplies light rare earth ore concentrate to China — was also awarded the tender in April, creating two prospective early stage projects in the US, which are both now suspended.

"There is no question that positive steps have been taken by many governments including the US and Australia to develop alternative supply chains to China. But time is of the essence and we are not moving quickly enough," chief executive of Northern Minerals — owner of the Browns Range heavy rare earth mine in Australia — George Bauk said.

Browns Range started production at its pilot plant in 2018 but the mine is in care and maintenance as a result of Covid-19 restrictions and has faced problems with funding.

"Roughly right is better than exactly wrong," Bauk added, referring to the complex task facing policymakers as they attempt to build a supply chain from the ground up. The US has no capacity to process and separate rare earths nor to commercially manufacture the rare earth permanent magnets that are critical to the automotive, defence and electronics industry.

China makes 80pc of the world's magnets with Japan supplying most of the remainder using light rare earth oxides supplied by Lynas from its Mount Weld mine in Australia and light rare earth processing plant in Malaysia.

Lynas produced 5,608t of of light rare earth praseodymium and neodymium oxide last year and accounts for as much as a fifth of global demand. But there is no production capacity outside China to make the separated heavy rare earth oxides, without which the magnets do not work. Lynas plans to continue to work on developing capacity to separate heavy rare earths.

By Caroline Messecar