An Australian firm has achieved a significant global milestone by producing heavy rare earth elements outside of China—a move analysts say is crucial for diversifying a supply chain long dominated by Beijing.
Lynas Rare Earths announced the successful commercial separation of dysprosium oxide at its Malaysian facility, marking the first time this element has been processed outside of China. The company also plans to begin refining terbium, another heavy rare earth, at the same site in the coming weeks.
Experts see this achievement as an important step, though they caution it also underscores the difficulties of establishing a reliable alternative supply chain for materials essential to electric vehicles and renewable energy technologies.
Rare earth elements (REEs), comprising 17 metals, are used in numerous high-tech and defense applications, including smartphones, LED lights, EV motors, and guided missiles. Dysprosium and neodymium are especially vital for manufacturing strong permanent magnets used in EV batteries and wind turbines.
While rare earths are not truly rare in the Earth’s crust, economically viable concentrations are hard to find—particularly for heavy rare earths like dysprosium and terbium, which are scarcer and more valuable than light rare earths.
China remains the dominant force in this sector, responsible for over 60% of global mining output and 92% of refined production, according to the International Energy Agency. With its latest development, Lynas becomes the only commercial producer of separated heavy rare earths outside China, though it has not disclosed the amount of dysprosium refined.
Neha Mukherjee, a senior analyst at Benchmark Mineral Intelligence, called it “a major milestone” and a timely shift, though she emphasized that more global diversification is still necessary.
The announcement comes as tensions rise between China and the U.S., with export controls and permit delays increasing volatility in the rare earth market.
Jon Hykawy, president of Stormcrow Capital, urged caution in interpreting the achievement. He noted that Lynas’s ore contains low quantities of heavy rare earths, limiting potential output. While the company can produce terbium and dysprosium, the quantities are not enough to meet broader demand.
China’s rare earth dominance stems from long-term industrial strategies that include low-cost, environmentally damaging extraction techniques—approaches that are difficult to replicate in countries with stricter environmental standards.
“Higher production costs mean companies outside China need stronger prices to see real profit,” said Hykawy.
Mukherjee echoed that sentiment, pointing to persistent low prices as a major barrier: “Prices haven’t supported new project development for over a year, making it hard for non-Chinese projects to be viable.”
Lynas has added new capacity at its Malaysian plant, which could produce up to 1,500 tonnes of heavy rare earths annually. If focused on dysprosium and terbium, that output could equal about a third of the global supply.
The company is also developing a processing facility in Texas, though rising costs have cast doubt on its long-term feasibility.
