Lynas Rare Earths has extended its long-term supply agreement with Japan Australia Rare Earths (JARE) to 2038. The agreement secures the offtake of crucial rare earth materials used in Japan. Lynas Rare Earths is an Australian company specialising in the mining and processing of rare earth minerals. The company operates a fully integrated supply chain from its mine in Western Australia to its processing plant in Malaysia.
Under the revised deal, JARE has committed to purchasing 5000 tonnes annually of neodymium-praseodymium (NdPr) from Lynas. The purchase price will be linked to market rates but will include a floor price of $US110 per kilogram. Lynas will allocate up to 7200 tonnes of NdPr annually for Japanese customers, with additional sales contingent on mutual agreement, ensuring no financial losses for the company.
The agreement also encompasses heavy rare earth oxides. Lynas will make 75 per cent of its heavy rare earth oxides production available to Japan, with JARE committing to purchase the equivalent of 50 per cent of this output.
An upside-sharing mechanism will be implemented when NdPr prices surpass $US150 per kilogram. Under this mechanism, JARE will receive 30 per cent of the price above that level, capped at $US10 million annually.
