Lynas heavy rare earth plant anchors non-China supply shift

Lynas

Lynas heavy rare earth plant expansion marks a major step in diversifying global magnet material supply chains. The new Lynas heavy rare earth plant at Lynas Malaysia will raise separated output in several phases. As a result, the Lynas heavy rare earth plant will strengthen non-China options for samarium, yttrium, dysprosium and terbium.

Lynas heavy rare earth plant targets samarium and yttrium demand

Lynas will build a 5,000 t/yr heavy rare earth separation plant at its Lynas Malaysia complex. The company plans phased commissioning, with initial samarium output targeted from April 2026. Over the following two years, Lynas will add gadolinium, dysprosium, terbium, yttrium and lutetium. This phased ramp-up will match downstream qualification cycles and market absorption.

The Lynas heavy rare earth plant will focus capacity on separated yttrium and samarium. Around 44pc of the expanded plant output will be dedicated to these two elements. These materials serve multiple industrial uses, from electronics to specialised ceramics and lighting. Lynas will prioritise higher value segments, especially electronics, where pricing remains more attractive. The company plans to sell heavy rare earths under offtake contracts with price floors. That structure should reduce downside price risk and support investment returns.

Lynas will self-fund the A$180mn project using part of its recent A$750mn capital raise. This funding structure avoids immediate dependence on external lenders. It also signals management confidence in future heavy rare earth margins. The Lynas heavy rare earth plant builds on recent milestones in Malaysia. Lynas became the first producer of separated heavy rare earths outside China this year. It started separated dysprosium production in May and terbium in June, using new 1,500 t/yr circuits.

China export controls lift strategic value of Lynas heavy rare earth plant

China imposed export controls in April on the six heavy rare earth elements Lynas plans to produce in Malaysia. These measures tighten available supply for many downstream users, especially in magnets and advanced electronics. Against that backdrop, the Lynas heavy rare earth plant gains significant strategic weight for governments and OEMs. Non-China sources of dysprosium and terbium are essential for resilient magnet supply chains.

Lynas is also extending its footprint beyond Malaysia. The company is developing a US heavy rare earth and light rare earth plant in Texas. Planned capacity is 2,500–3,000 t/yr of heavy rare earths and 5,000 t/yr of light rare earths. US government backing underlines the national security dimension of rare earth diversification. Combined, the Malaysian and Texas projects create a more integrated mine-to-separation network outside China. This network directly supports EV motors, wind turbines and defence applications.

The Metalnomist Commentary

Lynas is methodically positioning itself as the core heavy rare earth supplier outside China. The company links phased capacity, price-floor offtakes and geographic diversification into one strategy. For OEMs, the real question now is how fast they can re-qualify non-China material and lock in long-term supply before the next policy shock.