Lynas and JARE Lock In Rare Earths Supply Deal Through 2038
Lynas Rare Earths and Japan Australia Rare Earths B.V. have extended their supply agreement to 2038, securing firm commitments for critical rare earths with a pricing floor and upside sharing mechanism.
- Long-term supply agreement extended to 2038
- Firm offtake of 5,000 tonnes per annum of NdPr for Japanese industry
- 50% of all heavy rare earth oxides produced committed to Japan
- US$110/kg NdPr price floor with upside sharing above US$150/kg
- Agreement supports stable supply and investment in Lynas operations
A Renewed Commitment to Rare Earths Supply
Lynas Rare Earths Ltd has announced a significant update to its longstanding commercial partnership with Japan Australia Rare Earths B.V. (JARE), extending their supply agreement through to 2038. This move not only secures a stable supply of critical rare earth elements to Japanese industry but also reflects the evolving dynamics of the global rare earths market.
The updated agreement commits JARE to a firm offtake of 5,000 tonnes per annum of neodymium-praseodymium (NdPr), essential components in magnets and high-tech applications. Additionally, JARE will purchase 50% of all heavy rare earth (HRE) oxides produced by Lynas, underscoring the strategic importance of these materials to Japan’s industrial ecosystem.
Pricing Mechanisms to Balance Stability and Growth
To provide pricing certainty and reduce volatility, the deal introduces a floor price of US$110 per kilogram for NdPr supplied to Japanese customers. This baseline ensures Lynas can maintain steady revenue streams to support ongoing investments in production capacity and innovation.
Moreover, the agreement includes an upside sharing arrangement for prices exceeding US$150 per kilogram. Under this mechanism, 30% of the price increase above this threshold, capped at US$10 million annually, will be shared with JARE. This structure aligns incentives and reflects a mature partnership balancing risk and reward.
Strategic Implications and Industry Confidence
The partnership, which has spanned over 15 years, has been pivotal in establishing Lynas as a reliable supplier of both light and heavy rare earth oxides. The successful first production of separated heavy rare earth oxides in 2025 marked a milestone that underpins this renewed agreement.
Lynas CEO Amanda Lacaze highlighted the importance of this collaboration, noting it provides a strong foundation for supporting Japanese industry growth and sustainable global supply chains. The agreement also signals confidence from JARE, backed by the Japan Organization for Metals and Energy Security (JOGMEC) and Sojitz Corporation, in Lynas’ operational capabilities and market position.
Looking ahead, the annual review process embedded in the agreement will ensure its sustainability and responsiveness to market conditions, further strengthening the partnership’s resilience.
Bottom Line?
This extended agreement cements Lynas’ role in the rare earths supply chain while introducing pricing stability that could shape market dynamics for years to come.
Questions in the middle?
- How will Lynas manage production to meet firm and potential additional offtake volumes?
- What impact will the price floor and upside sharing have on Lynas’ profitability amid market fluctuations?
- Could this agreement influence other rare earth suppliers or geopolitical supply chain strategies?
