“Discussions between the Pentagon and the Australian company were delayed by the US government shutdown last quarter,” CEO Amanda Lacaze said in an interview.
“Price support is a key focus of the negotiations,” she said.
“Our objective would be that no government ever actually has to sign a check, but that simply the government policy provides an environment in which the market becomes a properly functioning market,” Lacaze said.
The Pentagon and some private investors struck a deal with US rare earths producer MP Materials Corp last year – in the wake of Chinese export curbs – that offered a guaranteed price floor for its product, giving the firm protection against any market slumps driven by surges in cheaper Chinese supply.
It also included a direct equity investment and an offtake arrangement.
Lynas is the only other major non-Chinese supplier besides MP Materials, and is seen as particularly important as it ramps up production of so-called heavy rare earths.
Those are critical for defence applications, and are subject to Beijing’s export controls enforced last year.
That’s led to some investors asking why Lynas hasn’t quickly secured a similar deal.
“The simple answer is because we’re not American,” Lacaze said, whose 12-year tenure as CEO at Lynas will end with her retirement this year.
“No, we can’t get a deal like MP because we are not an American firm, notwithstanding that we are an ally,” Lacaze said.
The Trump administration struck a deal with Australia last year that will see the US help finance some rare earths projects, not including Lynas.
Lacaze said Lynas isn’t looking for funding.
“What we want is a functioning market into which we can sell, because we know we can produce reliably on-spec material, and we know that technically we are many years ahead of anyone who might aspire to compete with us,” she said.
Lynas said output of heavy rare earths from its processing plants in Malaysia reached 26 tonnes last quarter.
Some of that was delivered to its long-standing customers in Japan, where manufacturers are watching for any interference to flows from China amid heightened tensions between the two nations.
“So far, there haven’t been any signs of major disruptions to Chinese exports after Beijing warned earlier this month there’d be greater scrutiny over applications,” Lacaze said.