March 10 (Reuters) - Australia's Lynas Rare Earths has revamped its supply agreement with Japan Australia Rare Earths, securing a firm annual commitment for 5,000 tonnes of neodymium‑praseodymium, a key rare‑earth magnet material.
Lynas, world's largest rare earth producers outside China, will set aside 75% of its heavy rare earth oxide output for Japanese industry, with Japan Australia Rare Earths committing to buy half of the firm's total heavy rare earth production.
JARE, co-owned by state-run Japan
Organisation for Metals and Energy Security and Sojitz Corp, had provided Lynas with A$200 million in 2023 to boost production of light and heavy rare earth materials.
CEO Amanda Lacaze said the deal will provide the Japanese industry with a "reliable supply" of rare earth products.
The deal keeps Lynas' total supply capacity at up to 7,200 tonnes per year through 2038, but locks in a $110 per kilogram floor price for the 5,000 tonne annual commitment. If prices rise above $150 per kg, JARE gets 30% of the gain capped at $10 million per year.
"Sales above this minimum volume will be by mutual agreement and at no opportunity loss to Lynas," the company said in a statement.
Rare earths, and the magnets made from them, are embedded in small but critical amounts across devices from iPhones and washing machines to F‑35 jets, and power everything from EVs to military systems.
The deal comes at a time when Washington has been pushing to secure critical minerals and reduce reliance on China, which produces around 90% of the world's rare earth magnets.
(Reporting by Kumar Tanishk in Bengaluru; Editing by Mrigank Dhaniwala)
