Edward Conard

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AI Summary. Rare-earths producer Lynas has begun making samarium oxide at its Malaysian refinery, a mineral used in heat-resistant magnets for fighter jets and missiles that had been refined almost exclusively in China. A U.S. Geological Survey report identified samarium as the highest-risk mineral for supply disruption.

Jon Emont Wall Street Journal
Date Posted:

Lynas, an Australian miner, has started processing heavy rare-earth elements. In March, Lynas announced a preliminary $96mm deal in which the USG would directly purchase Lynas’s rare earths, suggesting China’s rare-earth controls are a wasting asset.

Can a new refinery outside China supply military-grade rare earths?

Core argument: Lynas produces samarium oxide at its Kuantan, Malaysia complex, a rare earth used in heat-resistant magnets for jet fighters and missiles that had been refined almost exclusively in China.

For more than a decade, Lynas has had a refinery in Kuantan, a Malaysian chemical-industry center. But it only produced light rare earths, which tend to be more common, while it sold heavy rare earths to China for processing. Last year, as the U.S.-China trade war was at its peak, Lynas finished a new heavy rare-earths processor in Kuantan. Last month, Lynas began producing samarium oxide, a difficult-to-source rare earth in high military demand that is used in heat-resistant magnets for jet fighters and missiles. The mineral had been refined almost exclusively in China, causing a scramble among defense suppliers last year when China cut off exports in April. A report from the U.S. Geological Survey last year found samarium was the highest-risk mineral for disruption, with shortages potentially costing U.S. industry billions of dollars.

Takeaways by Macro Roundup® AI

  1. Lynas produces samarium oxide at its Kuantan, Malaysia complex, a rare earth used in heat-resistant magnets for jet fighters and missiles that had been refined almost exclusively in China.
  2. A U.S. Geological Survey report found samarium was the highest-risk mineral for supply disruption, with shortages potentially costing U.S. industry billions of dollars.
  3. Lynas completed a new heavy rare-earths processor in Kuantan after more than a decade of producing only light rare earths there and selling heavy rare earths to China for processing.

Related Articles:

  • Mad Libs: Just Fill In The Blanks — China expanded its rare earth export controls to require licenses for any product containing more than 0.1% by value of Chinese rare earths or made with equipment containing them, with a presumption of denial for military uses and scrutiny of advanced semiconductor uses. Aggressive enforcement would affect industries from chips and autos to aerospace, defense and medical equipment.
  • China Hatches Plan to Keep U.S. Military From Getting Its Rare-Earth Magnets — China is designing a "validated end-user" system that would fast-track rare-earth and other restricted material export approvals for U.S. firms while excluding companies tied to the U.S. military. The arrangement would let China ease export flows while keeping the materials away from U.S. military suppliers.
  • How Japan Built a Rare-Earth Supply Chain Without China — Japan has reduced its reliance on Chinese rare earths, with industry estimates putting China's share of Japanese rare-earth imports at roughly 60% to 70%, down from 90% or more. Japan's alternative chain runs from an Australian open-pit mine through a separation plant in Malaysia to Japanese magnet makers supplying automakers.
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