Lynas Rare Earths (ASX: LYC) has solidified its position as a leading producer of heavy rare earths, being the only non-Chinese company to commercially produce dysprosium oxide. As global trade tensions encourage diversification in rare earth supply chains, Lynas stands out to meet this demand with its facility in Malaysia and expansion plans globally.
The company produces dysprosium oxide at its Lynas Malaysia plant located in the Gebeng Industrial Estate, which commenced operations in 2012. This facility holds the unique position of being the sole commercial producer of dysprosium oxide outside of China. Lynas Malaysia’s heavy rare earths separation circuit began operations in the March quarter, marking a significant milestone for the company.
CEO and Managing Director Amanda Lacaze emphasised that the Lynas Malaysia production offers supply chain resilience, giving customers the option to source from outside China. The company currently engages with customers across Japan, the US, and Europe, making its presence felt in major markets.
The plant successfully produced its first dysprosium on schedule, and terbium output is anticipated by June. Lynas predicts that the pricing for its rare earths will align with demand outside of China rather than the Chinese market index, reflecting a shift in market dynamics.
With new global tariff environments and recent Chinese export controls on seven rare earths, announced on April 4, Lynas expects further market volatility. These geopolitical factors could impact global supply dynamics, highlighting the importance of non-Chinese production sources like Lynas.
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To expand its production capacity and meet growing demand, Lynas is constructing a processing facility in Kalgoorlie, Western Australia, and a new facility in Texas, US. These developments aim to bolster Lynas’s role in the global rare earths market.
Developments as far as global trade have largely been seen as a negative, although there are those that will likely benefit by being able to plug gaps in supply. Lynas’ share price has increased by 16.39% since the start of the year, propelling LYC to new highs as recently as last month.
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