Amid years of price stagnation and market volatility in the global rare earth industry, Australian rare earth giant Lynas Rare Earths has achieved counter-cyclical growth through production expansion and policy benefits.
Lynas chief executive officer Amanda Lacaze disclosed in the latest financial report meeting that this year’s revenue grew by eight per cent year-on-year to $254.3 million, with praseodymium and neodymium (PrNd) production and sales surging by 22 per cent and 23 per cent, respectively.
Lacaze also noted that Chinese rare earth companies have long suppressed international competition with a pricing strategy below market average, and the recent draft of China’s rare earth industry reforms could become a key turning point in reshaping the global landscape – short-term price hikes in the international market and long-term acceleration of Australia’s independent supply chain system.
Lynas financial results stand out
The financial report shows that Lynas’ PrNd production reached 2969 tonnes, setting a new record. The capacity optimisation of its Malaysian refinery and the expansion plan at its Mount Weld mine in Western Australia have proven effective.
However, Lacaze emphasized that despite the sharp increase in sales, China’s “non-market low pricing” still poses a constraint on Lynas’ revenue growth.
“China has long dominated praseodymium and neodymium pricing with its scale advantage, resulting in systematic compression of global producers’ profit margins,” Lacaze said.
This statement directly addresses the long-standing controversy surrounding China’s rare earth industry. As the global leader in the rare earth supply chain, China controls approximately 60 per cent of rare earth mining and 90 per cent of refining capacity, with its price fluctuations directly affecting the international market’s profit and loss balance.
Over the past three years, affected by the global economic downturn, overcapacity in China, and the risk of technological substitution, PrNd prices have dropped by more than 40 per cent, forcing many European and American rare earth companies to reduce production or seek government subsidies.
China’s new rare earth policy
A turning point came in 2025 when China’s Ministry of Industry and Information Technology issued the Regulations on the Total Amount Control and Management of Rare Earth Mining and Smelting Separation (Draft for Comments), which explicitly requires that domestic rare earth production be led by central enterprises and state-owned enterprises, and that unified national production control targets be implemented.
The core goal of the policy is interpreted as “ending disorderly competition in the industry and strengthening national control over strategic resources”.
The market responded quickly. After the draft was released, international praseodymium and neodymium prices surged 15 per cent within two weeks, reaching a new high for the year.
Analysis firm Adamas Intelligence pointed out that China’s administrative production cuts will lead to a global PrNd supply gap of 8000 tonnes, and prices may continue to break higher.
“China is shifting from ‘low-price dumping’ to ‘controlling volume and maintaining prices’, and non-Chinese companies will have their first sustainable pricing window,” the firm stated.
Lacaze admitted that Lynas has already felt the market shift:
“The price increase has directly improved our cash flow, enabling us to accelerate the construction of our heavy rare earth separation plant in Texas, US, and increase our research and development (R&D) investment in Australia,” she said.
Currently, Lynas has signed several long-term supply agreements with the US Department of Defense and Japanese heavy industry groups, all using a “cost plus premium” pricing model to avoid the risk of price fluctuations.
Long-term strategy
In addition to the short-term price benefits, China’s new policy may indirectly drive Australia to build a more closed rare earth investment review system.
In 2022, Australia’s Foreign Investment Review Board (FIRB) forced the Chinese Yunnan Tin Company to sell its shares in Northern Minerals on national security grounds, which led to tensions in the economic and trade relations between the two countries.
Lacaze said that after China’s state-owned enterprises take the lead in rare earth production, the “resource nationalism” trend could intensify, and Australia must strengthen its foreign investment regulation while attracting foreign investment to protect its economic interests and resource security.
At the same time, Australia should rethink its policy on rare earth exports to China, clarify policy requirements, and speed up the construction of its domestic rare earth supply chain to reduce dependence on China and enhance its own industrial competitiveness.
Currently, the Australian Federal Government has listed rare earths as the top item on its critical minerals list, formed the Mineral Security Partnership (MSP) with the US and Japan, and provided tax incentives to attract downstream processing companies to settle in Australia.
Analysts: Global rare earths polarisation accelerates
Industry observers point out that China’s policy shift may mark the beginning of the era of global rare earths.
“In the future, there will be two major camps: the China closed loop, which relies on administrative control to maintain market share, and the Western system, which ensures supply security through government subsidies and cooperation with allies,” UBS Group mining resources analyst Mark Levin said.
Against this backdrop, although Western companies like Lynas benefit in the short term from price recovery, they still need to break through refining technology barriers and capital expenditure pressures to truly compete with Chinese giants.
In response to the changes, Lacaze revealed that Lynas plans to increase its PrNd production capacity to 7000 tonnes per year over the next five years and partner with customers from South Korea and the EU to expand into magnet manufacturing.
“China’s policy has given us a breathing space, but the real challenge is to build a resilient supply chain that does not rely on any single market,” she said.
