Lynas Rare Earths and JARE have revised their supply agreement. The deal secures a long-term supply of rare earth materials and introduces a price floor.

Under the agreement, JARE will buy 5,000 tonnes of neodymium-praseodymium (NdPr) each year from Lynas. The contract runs until 2038, and the price floor is USD 110 per kg.

JARE will also purchase 50 per cent of Lynas’ heavy rare earth production. This includes dysprosium and terbium, commonly used in permanent magnets and advanced electronics. Lynas became the first producer of separated heavy rare earth oxides outside China in May 2025.

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Analyst Reg Spencer said the revised agreement reduces the influence of Chinese pricing on the rare earth market. The earlier USD 250 million offtake agreement signed in 2011 had been linked to Chinese price benchmarks. China’s export controls on dual-use technologies and Chinese-origin content may increase demand for rare earths sourced outside China. This could support higher prices for producers such as Lynas.

The agreement follows tensions between China and Japan over possible restrictions on rare earth exports. China dominates the global supply and processing of these materials, which are important for electronics, magnets, and defence technologies.

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After the announcement, Lynas shares rose 16 per cent to AUD 20.59 (USD 14.73) in Sydney. The company’s market value reached about AUD 20.7 billion (USD 14.7 billion). Over the past year, the stock traded between AUD 6.77 (USD 4.82) and AUD 21.96 (USD 15.65). 

Chief executive Amanda Lacaze said the agreement will support a stable supply for the Japanese industry and reduce price volatility. In her words, “This new agreement will ensure continued reliable supply of rare earth products that are strategically important to Japanese industry… and the implementation of fair market pricing will reduce price volatility for Lynas and enable continued growth and investment in our operations.”

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Lynas is the largest rare earth producer outside China. In 2024, the company produced 10,908 tonnes of rare earth oxides, including 5,655 tonnes of separated NdPr oxides. Mining takes place at the Mount Weld site in Western Australia, and processing is carried out at a facility in Malaysia.

The 2011 supply agreement between Lynas, Sojitz, and Jogmec helped Japan reduce reliance on Chinese rare earths. Dependence fell to about 60 to 70 per cent today, compared with about 90 per cent in 2010.

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