Kuantan, Malaysia, April 27, 2026, 03:11 MYT
The Pentagon is now looking to Lynas Rare Earths Limited’s facility in Malaysia for its supply of heavy rare earths, as reported by The Wall Street Journal. The Australian company has started processing materials like samarium, terbium, and dysprosium there—elements vital for high-temperature magnets in defense and industrial equipment. Traditionally, refining these minerals has been concentrated in China.
Timing is critical here. China’s rare earth export curbs revealed just how fragile the supply chain can be beyond its borders, spurring Washington, Japan, and global manufacturers to scramble for non-Chinese suppliers before the next shock disrupts factories or defense production.
There are 17 rare earth elements, the backbone for high-performance magnets, semiconductors, batteries and defense hardware. The so-called “heavy” rare earths—think dysprosium and terbium—matter even more strategically, since they’re critical for magnets that must operate at elevated temperatures. Reuters
Lynas kicked off samarium oxide production in March—one month sooner than planned, according to its March-quarter report. The initial phase is expected to reach about 400 tonnes per year once everything is running at full capacity. Samarium goes into samarium-cobalt (SmCo) magnets, which hold up in higher temperatures than most typical magnet types.
Now, what started as a relatively obscure mining company is being treated as a policy lever. Lynas stands as the largest rare earths producer outside China, and according to Reuters, it’s also the only commercial source for both light and heavy rare earth oxides beyond China’s borders.
The company holds a tentative four-year supply agreement with the U.S. government. Instead of funding a heavy rare earth facility in Texas, roughly $96 million earmarked for that project would now go toward purchasing both light and heavy rare earth oxides from Lynas’ current operations. The deal sets a floor price of $110 per kilogram for NdPr oxide, the neodymium-praseodymium compound essential in permanent magnets.
Lynas chief executive Amanda Lacaze cast the deal as a matter of security. “Through this agreement, the U.S. Defense Industrial Base will continue to have access” to rare earth oxides, she told Reuters in March. Reuters
The numbers are in, and they back up the strategy. Lynas posted gross sales revenue of A$265 million for the March quarter—more than double the A$123 million it brought in a year earlier. That jump came on the back of stronger pricing and an improved product mix. Total rare earth oxide production wasn’t far behind, climbing 69% to 3,233 metric tons.
The U.S. approach stretches well beyond Lynas. MP Materials still features in Washington’s plans, and just last week, USA Rare Earth announced it would acquire Brazil’s Serra Verde Group in a roughly $2.8 billion deal—securing a mine and a processing facility to produce magnetic rare earths outside of Asia.
Japan’s stepping up too. Lynas has reworked its supply agreement with Japan Australia Rare Earths, earmarking 75% of heavy rare earth oxide production for Japanese buyers. The deal also secures a yearly minimum of 5,000 tonnes of NdPr for Japanese industry.
There’s a snag. Lynas flagged rising material costs, and according to TIME, the company isn’t sure its Texas project will move forward without extra government support. Environmental and permitting risks also loom over rare earth ventures; Malaysia’s decision to renew Lynas’s license for a decade came with a string attached: within five years, the company must either stop producing radioactive waste or find an approved way to neutralise it.
The supply side isn’t straightforward. Gracelin Baskaran, who leads the Critical Minerals Security Program at the Center for Strategic and International Studies, put it bluntly to TIME: “China overplayed their hand.” But Julie Klinger at the University of Delaware pointed out that if scarcity were the real driver, companies would focus on reprocessing waste before turning to new mining projects. TIME
For Lynas, what matters now is pulling off operations in Malaysia—not rhetoric flying around Washington. Lacaze put it to TIME this way: the firm proves that “with the right assets” and enough grit, rare earths production can work. The market’s about to see if that logic stands up this time, as China, subsidies, and costs all shift together. TIME
