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Highlights
- Lynas has signed a contract with the US Department of Defense.
- Under the contract, Lynas will be establishing Heavy Rare Earths (HRE) separation facility in the US.
- In last five years, Lynas shares have gained more than 800%.
Shares of Lynas Rare Earths Limited (ASX:LYC) closed 0.466% on Tuesday (14 June), following the broader market trend. ASX200 closed 3.55% lower at 6,686.00. The benchmark index, ASX200 Materials (XMJ) slipped by 4.437% today.
Lynas shared today that it has signed a US$120 million contract with the U.S. Department of Defense (DoD). This contract assists Lynas in establishing an operating footprint across the United States.
The shares of Lynas closed at AU$8.530 today. With this, the share price of rare earth concentrates producers dipped by almost 10% in the last five trading sessions. The year-to-date fall is around 23%, and the prices tumbled by over 6% in six months.
In a year, the share price rose by 51%, and in five years, the share price has jumped by 817%.
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Details of the US$120M contract with the U.S. DoD
Via this ASX-announcement, Lynas today informed that Lynas USA LLC, a wholly owned subsidiary of Lynas, has inked a follow-on contract with the U.S. DoD for US$120 million. Under the arrangement, Lynas would establish Heavy Rare Earths (HRE) separation facility in the U.S.
Lynas would be able to establish an operating footprint in the U.S. On the other hand, the U.S. industry would gain access to heavy rare earth which are produced domestically. As per the announcement, the HRE cannot be sourced at the present time and is essential for developing a strong supply chain for industries like wind turbines, electric vehicles and electronics.
Image source: © Juliengrondin | Megapixl.com
Lynas said the facility is expected to be located on the Gulf Coast of the State of Texas (within the industrial area). Moreover, the facility is expected to be operational by the financial year 2025.
Reportedly, a mixed rare earth carbonate would be the feedstock. Lynas would work with third-party providers as well to source other feedstocks.
On the development, CEO and managing director of Lynas, Amanda Lacaze said,
About Lynas
Lynas is an ASX-listed company with expertise in rare earth ore exploration, extraction and processing across Malaysia and Australia. The company operates the biggest single rare earth processing unit in Malaysia. The produce at the Malaysian plant is exported to manufacturing markets in the U.S., Europe and Asia.
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