DoD Awards Key Contract for Domestic Heavy Rare Earth Separation Capability

September 19, 2023

The Department of Defense (DoD) awarded a multi-year contract to Lynas USA, LLC to build an industrial-scale domestic separation and processing facility for Heavy Rare Earth Elements (HREE). Once completed, the facility will house a commercially sustainable capability for separation of REEs in support of DoD, essential commercial, and clean energy products.

This collaboration, funded by the Industrial Base Analysis and Sustainment (IBAS) Program, will design, build, and bring into operation a facility for the separation and processing of REEs. Lynas USA, LLC, with support from its Australia-based parent company Lynas Rare Earths, Ltd., will establish a full-scale REE platform in the United States, complete with state-of-the-art waste-water recovery techniques, environmental controls, and materials handling processes. Consistent with other DoD awards supporting domestic REE supply chain resilience, this innovative and environmentally responsible facility will reduce reliance on the current foreign operations the United States depends on for REE-enabled end items.

Lynas CEO and Managing Director, Amanda Lacaze, stated, “Lynas is a proven producer of separated rare earth materials and this project will build on that experience to create the most cost efficient and environmentally responsible separation and processing supply chain for the U.S. defense and industrial base. The Lynas facility, which will be built on the Gulf Coast of Texas, will greatly improve the U.S. economy’s access to HREE and will give the defense industrial base and other critical commercial industries access to products that are sustainably produced and quality assured.”

This effort is a key component of the DoD’s rare earth supply chain resiliency initiative to enhance America’s rare earth supply chains and create mine-to-magnet capability using domestic and allied production. Each award is part of an integrated strategy to deliver sustainable and secure pathways to extract, separate, process, and produce REEs for the U.S. by partnering with multiple vendors and to establish confidence throughout the REE value chain. Recently the DoD awarded MP Materials a multi-year contract to deliver a wholly domestic REE separation and processing capability; the complementary awards will address an ever-growing demand for magnets, optics, and energy components for the U.S.

This award provides DoD with key capabilities to achieve the strategic aims of the 2022 National Defense Strategy and Executive Order (E.O.) 14017 “Securing America’s Supply Chains”. Additionally, the Lynas project demonstrates the type of investment the Biden-Harris Administration seeks to pursue with partner nations, such as Australia, under the Indo-Pacific Economic Framework (IPEF). It directly supports the IPEF objective of helping the United States and its allies build more resilient economies and aligns with the Framework’s four pillars of a connected, resilient, clean, and fair economy.

“HREEs are an increasingly important part of any economy, with applications in virtually every industry including both defense and commercial markets,” said the Deputy Assistant Secretary of Defense for Industrial Base Resilience, Ms. Halimah Najieb-Locke. “This effort is a cornerstone event in securing resilient supply chains by enabling the United States and its allies to gain an organic capability for critical minerals and materials and depart from foreign dependence as directed by President Biden’s E.O. 14017.”

For additional information on this and other MCEIP projects, please visit our website, or e-mail us.

About the Department of Defense's Office of the Assistant Secretary of Defense for Industrial Base Policy:

The Assistant Secretary of Defense for Industrial Base Policy is the principal advisor to the Under Secretary of Defense for Acquisition and Sustainment (USD(A&S)) for developing Department of Defense policies for the maintenance of the United States defense industrial base (DIB), executing small business programs and policy, and conducting geo-economic analyses and assessments. The office also provides the USD(A&S) with recommendations on budget matters related to the DIB, anticipates and closes gaps in manufacturing capabilities for defense systems, and assesses impacts related to mergers, acquisition, and divestitures. IBP monitors and assesses the impact of foreign investments in the United States and executes authorities under sections 2501 and 2505 U.S.C. Title 10.