Lynas Rare Earths has strengthened its long-standing supply partnership with Japan Australia Rare Earths (JARE), extending the agreement to 2038 and reinforcing rare earth supply to Japanese industry.
Under the revised arrangement, JARE will commit to purchasing 5000 tonnes per annum of neodymium-praseodymium (NdPr) from Lynas, supported by a market-linked floor price of $US110 per kg. The agreement also introduces an upside sharing mechanism if prices rise above $US150 per kg.
The companies reaffirmed their existing marketing agreement, which allows Lynas to supply up to 7200 tonnes per annum of NdPr to Japanese industry through to 2038, provided there is no opportunity loss to Lynas.
“Lynas’ partnership with JARE has served both organisations well over the past 15 years,” Lynas chief executive officer and managing director Amanda Lacaze said.
“It has created a strong foundation for the development of Lynas’ business, supported investments in new processing capacity and new products, and delivered reliable supply of quality product to support Japanese industry growth.”
Heavy rare earths will also play a larger role in the updated deal. A total of 75 per cent of heavy rare earth oxide production from Lynas will be made available to Japanese industry, with JARE committing to purchase the equivalent of 50 per cent of all heavy rare earth oxides produced.
Sales above the minimum NdPr commitment will be determined by mutual agreement between the parties and customers.
JARE is a special purpose company established by Japan Organisation for Metals and Energy Security (JOGMEC) and Sojitz Corporation and has partnered with Lynas for more than 15 years.
“We are delighted that the revised 12-year availability and supply agreement with JARE will support both Japanese industry and the continued growth and development of Lynas,” Lacaze said.
“This new agreement will ensure continued reliable supply of rare earth products that are strategically important to Japanese industry and its global market, and at the same time, the implementation of fair market pricing will reduce price volatility for Lynas and enable continued growth and investment in our operations.”
