Malaysian Rare Earths firm Lynas will design materials separation facility in Texas for U.S. Defense Department
  • Lynas, which earned a Gold Medal from green ratings firm EcoVadis, will design a rare earths facility in Texas as U.S. moves to decouple from China
  • The facility will help break a reliance on China for materials used in high-tech products from phones to MRI machines, potentially opening the market for new opportunities.
  • The choice of Lynas to design the facility may pressure future rare earths processing plants to commit to sustainable development.

The U.S. effort to reduce its dependence on China for heavy rare earths needed for high-tech products ranging from cell phones to missile systems is moving forward with a promise toward sustainable development. 

The Department of Defense chose Lynas Corp. to design a separation facility that will process the materials, which will be sourced from the company’s mine in Western Australia. Lynas, the only major rare earths producer outside China, received a gold medal CSR rating from sustainability ratings provider EcoVadis, ranking in the top 5% of companies evaluated.

“Lynas applies the same approach to sustainability and high environmental standards across all of its operations,” a Lynas spokesperson wrote in emailed comments to Karma. “Manufacturers worldwide need to trust that their raw material supply and supplier is sustainable, and this is especially important when they are making procurement decisions for eco-friendly and digital-age products.”

While decoupling from China has gained momentum this year because of the coronavirus pandemic, the plant is part of an effort started by President Donald Trump in 2017 to reduce the country’s dependency on imports needed for products including electric vehicles and consumer technology. China supplies about 80% of America’s rare earths imports, according to the U.S. Geological Survey.

The 17 minerals known as rare earth elements are misnamed in a sense. They are fairly common in nature, but are very difficult to mine because they usually aren’t found in concentrations high enough for economical extraction. Demand has exploded in the past few decades because of their use in tech products now found in homes around the world.  Neodymium, for instance, is commonly used in lasers, smartphones, and hard drives.

Zion Market Research, in a report before the pandemic, estimated that the global rare earths market would climb to $14.4 billion by 2025 from $8.1 billion in 2018. The growth would be fueled by demand for magnets in the renewable energy sector, the research firm said. Magnets from neodymium are widely used in wind turbines.

There are no rare earths processing plants operating in the U.S., though three — including the Lynas one — are in development. The facilities would add about 10,000 tons of processing capacity, BNEF analyst Sophie Lu told Bloomberg.

The amount of funding involved in the Pentagon contract wasn’t announced, but Bloomberg reported that the initial phase of design and planning was likely to cost about $30 million.

Lynas ships the ore it mines in Western Australia to its processing plant in Malaysia, but the facility doesn’t have the capacity to separate heavy rare earths materials.

Lynas, a signatory of the United Nations Global Compact committing companies to sustainable development, released its first sustainability report last year. The report details the company’s efforts at proper environmental management while committing to human rights that include diversity and non-discrimination. For instance, Lynas said recycled or reused water increased to 26% of the company’s process water in FY2019 from 14% a year earlier.