DOD Awards $30.4 Million for Rare Earth Minerals Facility in Texas

The U.S. Department of Defense (DOD) and Lynas Rare Earths Ltd. are moving forward to establish a rare earths processing facility in Hondo, west of San Antonio.

The DOD announced an award of $30.4 million under a Defense Production Act (DPA) Title III investment, citing a 2017 executive order from then-President Trump that prioritized the domestic production and processing of critical minerals.

Lynas, a rare earths mining company with major operations in Australia and Malaysia, announced that under the agreement with the U.S. government, the company would also be expected to contribute $30 million toward the project.

China leads the world in exports of rare earths, which are used in many modern technologies ranging from military equipment to electric vehicle motors, like those that will be used by Tesla at a new factory near Austin.

“As the only non-Chinese commercial producer of separated Rare Earths products to the global marketplace, Lynas is delighted by the opportunity to develop a Light Rare Earth separation facility in the United States,” said Lynas CEO Amanda Lacaze. “The Texas plant will ensure the U.S. has a secure domestic source of high quality separated Rare Earth materials.”

The Hondo facility will be established by Lynas’ U.S. subsidiary and will be used to process light rare earth elements, which have lower atomic numbers than heavy rare earths.

Lynas says the facilities “will serve both the Defense Industrial Base (DIB) and the growing commercial market, including electric vehicles and green technologies made in the U.S. as well as in global markets.”

The company says that the new plant is expected to “produce approximately 5,000 tonnes per annum of Rare Earths products, including approximately 1,250 tonnes per annum of NdPr.”

NdPr, a combination of neodymium (Nd) and praseodymium (Pr), account for two of the most common rare earths and are used in the manufacturing of a wide range of products from computer parts to electric vehicle motors, 

In July 2020, Lynas signed a contract with the DOD to begin “Phase 1” work on a heavy rare earths separation facility in the United States.

According to the company, if the contract proceeds to the next phase, the Hondo facility will be used for both light and heavy rare earths separation.

Lynas is not the only rare earths company with operations in Texas.

Two years ago, Lynas announced a partnership with Blue Line Corporation, a Texas-based company, to expand a processing facility in Hondo.

Last year in July, the DOD signed another agreement for a DPA incentive of $28.8 million for Urban Mining Company in central Texas to “assist in developing a domestic source for Neodymium Iron Boron (NdFeB) rare earth permanent magnets,” and they agreed to another $860,000 with Urban Mining in November.

And in West Texas, USA Rare Earth and Texas Mineral Resources Corporation operate the Round Top Mountain mining project, which contains 16 of the 17 rare earth minerals.

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