Kuantan, Malaysia, April 27, 2026, 03:11 MYT
The Pentagon’s hunt for scarce heavy rare earths now runs through Lynas Rare Earths Limited’s Malaysian plant, where the Australian miner has begun processing materials such as samarium, terbium and dysprosium, The Wall Street Journal reported. The elements, used in high-temperature magnets for defence and industrial systems, have long been refined largely in China.
The timing matters. China’s export restrictions on rare earths exposed how thin the supply chain is outside China, pushing Washington, Japan and manufacturers to lock in non-Chinese sources before another disruption hits factories or weapons suppliers.
Rare earths are a group of 17 elements used in powerful magnets, chips, batteries and military gear. “Heavy” rare earths, including dysprosium and terbium, are a smaller but more strategic subset because they help magnets work under high heat. Reuters
Lynas said in its March-quarter report that samarium oxide production began in March, one month ahead of schedule, and that the first step should deliver annual output of about 400 tonnes once capacity is in place. Samarium is used in samarium-cobalt magnets, known as SmCo magnets, which can operate in hotter conditions than many common magnet types.
That has turned a once-niche miner into a policy asset. Lynas is the world’s largest rare earth producer outside China and, Reuters reported, the only commercial producer of both light and heavy rare earth oxides outside China.
The company also has a preliminary four-year U.S. government supply pact. Under the arrangement, about $96 million previously allocated for a heavy rare earth facility in Texas would be used to buy light and heavy rare earth oxides from Lynas’ existing facilities, with a $110-per-kg floor price for NdPr oxide, a neodymium-praseodymium material used in permanent magnets.
Lynas CEO Amanda Lacaze framed the deal in security terms. “Through this agreement, the U.S. Defense Industrial Base will continue to have access” to rare earth oxides, Reuters quoted her as saying in March. Reuters
Recent numbers gave the strategic story a commercial base. Lynas’ gross sales revenue more than doubled to A$265 million in the quarter ended March 31 from A$123 million a year earlier, helped by stronger prices and a better product mix, while total rare earth oxide production rose more than 69% to 3,233 metric tons.
The U.S. is not relying on Lynas alone. MP Materials remains part of Washington’s domestic push, while USA Rare Earth said last week it agreed to buy Brazil’s Serra Verde Group for about $2.8 billion, adding a mine and processing plant that can supply magnetic rare earths outside Asia.
Japan is moving in the same direction. Lynas has revamped a supply deal with Japan Australia Rare Earths, setting aside 75% of its heavy rare earth oxide output for Japanese industry and locking in a firm annual commitment for 5,000 tonnes of NdPr.
There is a catch. Lynas has warned of higher material costs, and TIME reported that the company still sees uncertainty over whether its planned Texas plant proceeds without more public funding. Rare earth projects also carry environmental and permitting risk, a point Malaysia’s 10-year licence renewal underscored by requiring Lynas to stop producing radioactive waste after five years or neutralise residues through approved methods.
Even the supply argument is not simple. Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies, told TIME that “China overplayed their hand,” but Julie Klinger of the University of Delaware warned that if scarcity were the real issue, existing operators could reprocess waste rather than build entirely new mines. TIME
For Lynas, the immediate question is execution in Malaysia, not slogans in Washington. Lacaze told TIME the company shows that “with the right assets” and determination, a producer can succeed in rare earths; the market will now test whether that still holds when China, subsidies and costs all move at once. TIME
