Australian rare earths company Lynas Rare Earths (ASX: LYC) has achieved a significant milestone, becoming the first producer of heavy rare earths outside of China, with the successful commercial production of dysprosium at its Malaysian refinery.
Dysprosium is a critical element used in the manufacture of high-performance magnets essential to electric vehicles, wind turbines, and various defense technologies. Its strategic importance has placed it at the center of geopolitical concerns, particularly after China imposed export restrictions on several key rare earths, including dysprosium.
On Friday, Lynas confirmed it had produced its first batch of dysprosium oxides at the Lynas Malaysia facility, which has operated since 2012 and was previously focused on processing “light” rare earths used in electronics and defense systems. While the company did not disclose the volume produced, the development marks the first commercial-scale production of a heavy rare earth by a company outside of China—a breakthrough in global efforts to diversify the rare earth supply chain.
China currently accounts for about 70% of rare earth mining and nearly all rare earth processing, making Lynas’ entry into the heavy rare earth market a notable advancement in reducing dependence on Chinese supply.
The ore processed at Lynas Malaysia is sourced from the company’s Mt Weld mine in Western Australia, one of the world’s richest rare earth deposits, with estimated reserves of 2 million tonnes of total rare earth oxides.
“This achievement is a critical step in building a more resilient global supply chain,” said Amanda Lacaze, CEO of Lynas Rare Earths. “It offers our customers—particularly in Japan, the US, and Europe—a credible alternative source of heavy rare earths outside of China.”
Lynas also confirmed that production of terbium, another key heavy rare earth, is scheduled to begin in June. The recently commissioned heavy rare earth separation circuit at the Malaysia plant can process up to 1,500 tonnes per year, making it one of the most advanced facilities of its kind outside China.
In its latest quarterly update, the company noted that pricing for its heavy rare earth products is expected to command a premium over Chinese benchmark prices, reflecting strong demand from Western markets seeking more secure and sustainable supply sources.
Meanwhile, Lynas is also constructing a new refinery in Texas, USA, and has signaled that additional government support may be required to complete the project, amid rising competition and tightening global supply chains.
Following the announcement, shares in Lynas Rare Earths rose 2.7%, closing with a market capitalization of A$7.2 billion, underscoring investor confidence in the company’s expanding role in the global energy transition.