US Government Funds Rare-Earth Metal Processing Plant

A Partnership with Australia-Based Lynas Corp.

The US Department of Defense and Lynas Corp. (LYC:AU), an Australia-based mining company, have partnered to build a rare-earth element processing facility in Texas.

Lawmakers decided to contribute $36 million for the initial phase of building the plant after some disagreement. In April, plans to fund the project were put on hold because members of Congress argued that only US-based companies should receive government funding—but eventually a deal was reached at the start of this week. Lynas shares rose 11% on the news.

Rare-earth metals are important for building strong magnets used in high-tech products—everything from smartphones, to electric vehicles, to missiles. Lynas’ mine in Western Australia will ship these materials to Texas for processing.

Bringing Rare-Earth Metal Processing Closer to Home

The US government is making plans for three new domestic rare-earth processing plants, including the Lynas facility. When these projects are completed, the US will have the capability to process about 10,000 tons of rare-earth metals.

This amount of rare-earth metals would not meet the nation’s commercial needs. However, it would provide the US military with all the rare-earth metals it requires.

Reducing Dependence on China

China currently supplies about 80% of the rare-earth metals used in the US. At the moment, the US has no domestic rare-earth processing plants.

Last month, China threatened to impose sanctions on Lockheed Martin, a US-based arms supplier. This sounded alarm bells for lawmakers, who worried that China could use its control of rare-earth metal supply chains to put pressure on arms makers in the US. Through the new partnership with Lynas, the US government hopes to become less dependent on China for crucial rare-earth materials.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS072902