Australian rare earths producer Lynas Rare Earths announced plans to increase heavy rare earth processing capacity at its Malaysian facility to meet growing market demand. The company will invest MYR500 million (approx. US$120 million) to construct a new plant capable of processing 5,000 tons of heavy rare earth feedstock annually.
The feedstock for the new facility will come from Lynas's Mount Weld mine in Western Australia and other developing mineral deposits. The project, reported by Bloomberg and The Edge Malaysia, still awaits approval from Malaysian authorities, though the company has already received purchase interest from multiple enterprises.
Lynas CEO Amanda Lacaze emphasized the high demand in the heavy rare earth market, stating that the company can set its own prices for rare earth oxides and prefers to engage with customers offering better terms, such as those in the electronics sector.
Lynas's unique position outside China
China currently dominates rare earth processing technology, while Lynas claims to be the only company outside China capable of producing both heavy and light rare earth elements. Presently, Lynas produces terbium and dysprosium and plans to scale up production of samarium. The company operates processing plants in Western Australia and Kuantan, Pahang, Malaysia, and is developing a new plant in Texas, US.
Recent geopolitical developments have heightened the strategic importance of diversified rare earth supply chains. China introduced tightened export controls on rare earths in early October, aiming to leverage these materials in trade negotiations. In response, the US has signed key mineral and rare earth agreements or memorandums with Australia, Malaysia, Thailand, and Japan to reduce dependence on Chinese supply chains.
Malaysia's position and trade implications
The Malaysian government acknowledges its rare earth resources but highlights a lack of domestic processing technology, encouraging foreign investment, especially in mid- and downstream supply chain segments. The government has banned the export of unprocessed rare earth materials to foster local value addition.
Under the Malaysia-US trade agreement, Malaysia is prohibited from restricting rare earth exports to the US or imposing quota systems. Malaysian officials clarified that this obligation does not conflict with existing local regulations. The expanding Lynas facility aligns with Malaysia's efforts to develop its rare earth processing capabilities amid shifting global market dynamics.
Article translated by Jingyue Hsiao and edited by Jack Wu
