PERTH – Refining rare earths for the green energy transition is hard. Just ask MP Materials and Lynas.
Plans for Australia’s Lynas to build a United States’ rare earths refinery with a Texas-based partner have collapsed, according to two sources familiar with the matter. Lynas has said it is trying to finish a rare earths refinery in Western Australia that has faced hurdles and is building its own plant elsewhere in Texas.
MP, whose second-largest shareholder is China’s Shenghe Resources, declined to comment ahead of its results.“The rare earths refining process can be very finicky,” said Mr Kray Luxbacker, who heads the University of Arizona’s mining and geological engineering department and is unaffiliated with MP or its peers. “There are just so many complex steps.”
To extract neodymium and praseodymium to build EV – electric vehicle – magnets, for example, MP must first remove the less-desirable lanthanum and cerium that compose about 83 per cent of its California deposit in a process that relies on an intricate cocktail of acids, bases and other chemicals that are tailored to the mine’s geology.
By strategically focusing on industries that use the magnets – built with rare earths refined in China at profit margins purposefully kept low – Beijing can boost its booming EV industry, Mr Castilloux added.China’s model came into sharp relief in July when rare earths prices sank to their lowest level in nearly three years, due in part to rising Chinese supply. China also offers a 13 per cent export rebate to magnet manufacturers using its material, furthering its dominance.
In 2019, the pair agreed to build refining facilities near San Antonio, Texas, and discussed with Trump administration officials their plans to be “the only large-scale producer of separated in the world outside of China”, according to e-mails obtained by Reuters.