Lynas-Japan deal offers ‘insulation’ from China rare earth pricing

Blair McBride | March 11, 2026 | 2:44 pm Critical Minerals Markets Asia Australia Rare Earth

Australia fast-tracks critical minerals stockpile

Australia’s Lynas is the only major producer of separated rare earths outside China. (Image courtesy of Lynas Rare Earths.)

A revised deal between Australia’s Lynas Rare Earths (ASX: LYC) and Japanese customer JARE firms up supplies of heavy rare earths and creates a price floor as a hedge against China. Lynas shares soared to a nearly four-month high.

The agreement commits JARE, a company formed from Japan’s Jogmec and Sojitz, to buy 5,000 tonnes of neodymium-praseodymium (NdPr) annually from Lynas at a $110-per-kg floor until 2038, Lynas reported Tuesday. JARE is to also purchase 50% of Lynas’ heavy rare earths production, such as the elements dysprosium and terbium, used for permanent magnets and advanced electronics.

Lynas became the first producer of separated heavy rare earth oxides outside China last May.

Lessens price influence

“The revised offtake [provides] insulation from any influence of China on rare earth pricing,” Canaccord Genuity Capital Markets analyst Reg Spencer said in a note on Wednesday, citing the initial $250 million offtake with Lynas in 2011 that was linked to Chinese pricing benchmarks.

With Chinese export controls on dual-use applications and Chinese-origin content restrictions, the revised deal should support pricing premiums on rare earths sourced outside of China and help with pricing outcomes for Lynas, Spencer added.

Alternate supply chain

The updated agreement comes just over two months after China threatened to restrict rare earth exports to Japan amid a dispute over comments made last November by Japanese Prime Minister Sanae Takaichi about Japan’s potential involvement in a conflict over Taiwan.

Beijing’s export controls on rare earths-containing dual-use technologies exposed Japan’s dependence on China for the important elements, whose supply and processing China dominates.

Lynas shares jumped 16% to A$20.59 apiece on Wednesday in Sydney, for a market capitalization of A$20.7 billion ($14.8 billion).

Lynas invests in new Malaysian heavy rare earth facility to meet rising demand

The new availability and supply deal will support Japanese industry and the growth and development of Lynas, CEO Amanda Lacaze said in a release.

“This new agreement will ensure continued reliable supply of rare earth products that are strategically important to Japanese industry and its global market, and at the same time, the implementation of fair market pricing will reduce price volatility for Lynas and enable continued growth and investment in our operations,” she said.

Top Western producer

Lynas, the top producer of rare earths outside China, produced 10,908 tonnes of rare earth oxides in 2024, for 5,655 tonnes of separated neodymium-praseodymium (NdPr) oxides, according to company figures. The company mines rare earths at its Mount Weld site in Western Australia and processes and separates the concentrate at a facility in Malaysia.

Lynas’ 2011 offtake agreement with Sojitz and government mineral agency Jogmec – along with other supply chain arrangements – has helped Japan reduce its reliance on Chinese rare earths to 60-70% today from 90% in 2010, according to Jogmec data cited by The New York Times.