Lynas Texas rare earth processing plant faces wastewater permitting hurdles

Lynas Texas Rare Earth

The Lynas Texas rare earth processing plant now looks unlikely to proceed. Lynas Rare Earths flagged wastewater-related permitting barriers that have not eased. However, chairman John Humphrey said progress has stalled in recent months. Therefore, the Lynas Texas rare earth processing plant has shifted from growth option to execution risk.

The Lynas Texas rare earth processing plant targeted both heavy and light rare earth separation capacity. The plan covered 2,500–3,000 tonnes per year of heavy rare earths and 5,000 tonnes per year of light rare earths. Meanwhile, water treatment complexity pushed cost risk higher earlier in the year. As a result, management signaled deeper uncertainty around the project in October.

DoD support sharpens the strategic stakes for rare earth processing

US policy makers want faster rare earth processing capacity outside China. United States Department of Defense agreed in 2023 to provide up to $258mn in support for the proposed project. However, Lynas expects to pursue commercial offtake arrangements using material from Malaysia operations. Meanwhile, MP Materials received a NdPr price floor that can stabilize domestic magnet inputs. Therefore, permitting becomes a central constraint on supply chain security goals.

Operational outages add near-term uncertainty to feedstock flows

Lynas also faces operational headwinds beyond permitting. Power outages at Kalgoorlie disrupted feedstock production that supports downstream output. Meanwhile, the company expects to lose about one month of rare earth production at its Malaysian plant. However, it cannot yet quantify the full production impact. As a result, delivery planning and customer confidence may depend on clearer recovery timelines.

The Metalnomist Commentary

This case shows how wastewater permitting can reshape critical minerals timelines faster than capital support. However, DoD-backed demand signals still favor separated oxides and NdPr outside China. Therefore, execution will hinge on permitting solutions and resilient feedstock operations.