A new agreement between Lynas Rare Earths and Japan Australia Rare Earths (JARE) has seen Lynas pocket $200 million in investments.
The agreement also forgoes a historic $US11.5 million interest loan.
The contribution will be made through a subscription of ordinary shares in Lynas and will strengthen the company’s balance sheet, supporting funding of capital projects designed to meet accelerating global demand for rare earths.
“Lynas has a huge appetite for growth and a large capital investment plan,” Lynas chief executive officer and managing director Amanda Lacaze said.
“This $200 million capital investment from the Japanese Government, through JARE, will boost our balance sheet and assist in assuring the delivery of our major growth projects.”
As part of the agreement, Lynas will update its existing priority supply rights to reflect continued growth in the Japanese rare earths market, prioritising Japan in its rare earth shipments.
For example, if Lynas’ annual production is less than 9600 tonnes per annum (tpa) of neodymium and praseodymium (NdPr), priority supply of up to 7200tpa will be delivered to Japan.
“JARE has been a valued and strategic partner to Lynas since 2011 and we welcome these new agreements which better reflect demand forecasts from the Japanese rare earths market. We also thank JARE for agreeing to forgo the historic interest payment of $US11.5 million from 2016,” Lacaze said.
“Today, Lynas is the market-leading supplier of NdPr to the Japanese rare earths industry and these new agreements demonstrate the deep commitment of JARE to the ongoing growth and success of our company.”
The agreements were signed at a signing ceremony in Tokyo attended by Lacaze, JOGMEC executive vice president Hiroshi Shimotori, and Sojitz senior managing executive officer Masaaki Bito.