Yesterday afternoon, Lynas Rare Earths Ltd (ASX: LYC) announced a revised long-term supply agreement with Japanese industry, extending to 2038 and establishing a firm offtake for 5,000 tonnes of NdPr per year at a US$110/kg price floor.
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What did Lynas Rare Earths report?
- Updated agreement with JARE extends rare earths supply to Japanese industry until 2038
- New floor price of US$110/kg for NdPr oxide sales
- Firm annual offtake: 5,000 tonnes of NdPr and 50% of all Heavy Rare Earth (HRE) oxides produced
- Upside sharing arrangement for prices achieved above US$150/kg NdPr
- Annual review process ensures sustainability and funding effectiveness
What else do investors need to know?
The updated agreement gives Lynas both price certainty and market access, with a minimum floor for NdPr sales and the potential for extra upside if prices rise. Importantly, it cements Lynas' position as a cornerstone supplier of key materials for Japanese industry at a time when rare earth security remains a global focus.
The partnership covers both Light and Heavy Rare Earth oxides, reflecting Lynas' successful production of separated HRE oxides in 2025. Under the deal, JARE will commit to buy half of all HRE output, while Lynas and Sojitz continue to collaborate on downstream customer contracts.
What did Lynas Rare Earths management say?
CEO and Managing Director Amanda Lacaze said:
Lynas' partnership with JARE has served both organisations well over the past 15 years. It has created a strong foundation for the development of Lynas' business, supported investments in new processing capacity and new products, and delivered reliable supply of quality product to support Japanese industry growth.
We are delighted that the revised 12-year availability and supply agreement with JARE will support both Japanese industry and the continued growth and development of Lynas. This new agreement will ensure continued reliable supply of rare earth products that are strategically important to Japanese industry and its global market, and at the same time, the implementation of fair market pricing will reduce price volatility for Lynas and enable continued growth and investment in our operations.
We thank our JARE partners, JOGMEC and Sojitz, and our Japanese customers for their support over the past 15 years. We are confident this new agreement, alongside other policy initiatives from governments around the world, will contribute to improved rare earths market dynamics," added Ms Lacaze.
What's next for Lynas Rare Earths?
Lynas expects the revised agreement to provide stability in revenues and support ongoing investments in processing and product development. The 12-year horizon gives management confidence to pursue growth opportunities and strengthens relationships with Japanese customers.
The company will continue to work closely with JARE and Sojitz to ensure the sustainability of the agreement, monitor rare earth market trends, and review terms annually. This collaborative framework should help Lynas manage market volatility and remain a critical player in global supply chains.
Lynas Rare Earths share price snapshot
Over the past 12 months, the Lynas Rare Earths shares have risen 153%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 10% over the same period.
