Recently, an Australian rare earth company announced that it has successfully produced the key heavy rare earth element Dysprosium (Dy) for the first time in its Malaysian factory. This achievement makes the company the first outside of China to achieve commercial refinement of heavy rare earth elements, a strategic breakthrough in decentralizing the global rare earth supply chain and marking an important milestone in “de-Sinicization”.
Lynas Rare Earths Ltd, based in Australia, issued a statement on May 16 confirming the successful production of Dysprosium Oxide at its Malaysian factory.
Amanda Lacaze, the CEO and Managing Director of Lynas, announced in the statement that the production of Dysprosium met specifications, marking an important step in enhancing the resilience of the supply chain and providing customers with an alternative source of rare earth products outside of China.
Dysprosium is a key material for manufacturing high-performance magnets, widely used in high-tech products such as electric vehicles, wind turbines, optical disk drives, nuclear reactors, and specific medical equipment.
Lacaze emphasized, “Lynas is currently the only producer commercializing heavy rare earth products outside of China.” She stated that Lynas is now “in contact with customers in Japan, the United States, and Europe regarding heavy rare earth supply.”
According to reports, Lynas has been processing rare earth ores mined in Australia in Malaysia since 2012. The successful start of commercial refining of rare earth elements at the Malaysian processing plant is a critical development in Lynas’ global rare earth strategy.
Economic scholar David Huang stated to reporters that Lynas’ success in separating Dysprosium signifies a “strategic breakthrough” for the global rare earth supply chain.
He mentioned, “Lynas’ breakthrough means that China’s monopoly in the essential final stage of rare earth supply has been broken for the first time. This is not only a technical issue but also a matter of dominance in the supply chain.”
Sun Guoxiang, a professor in International Affairs and Business at National Hua University in Taiwan, described Lynas’ successful production of Dysprosium as a “milestone of technological and industrial autonomy,” breaking some of China’s monopolies on rare earth elements.
He indicated that this marks the first time there has been commercial capacity for separating heavy rare earth outside of China, providing a genuine alternative source for global users.
Currently, China produces about 70% of the world’s rare earth elements, with Chinese companies controlling 90% of the capacity for rare earth separation and processing.
Huang mentioned that countries like the United States, Japan, and Europe can establish strategic reserves for rare earth materials that are not fully dependent on China in the future. Investments will flow towards refineries and mineral bases outside of China, potentially diminishing China’s bargaining power in the rare earth market.
He believed that Lynas’ breakthrough symbolizes a significant challenge for Beijing’s resource strategic thinking. He also emphasized the impact on industrial investments, policy initiatives, and long-term strategic positioning.
Huang also mentioned that as China uses rare earths as a “quasi-weapon,” other countries will seek to disengage. He described it as a “reverse catalytic effect.”
Lynas has received support from the U.S. Department of Defense to break China’s monopoly on critical rare earth minerals. In 2023, Lynas received a $258 million grant to establish a heavy rare earth processing plant in Texas, expected to be operational by 2026.
It is speculated that China may retaliate against Australia due to Australian companies taking the lead in “de-Sinicizing” the rare earth supply chain.
In response, Huang stated, “Beijing’s economic retaliation against Australia is shrinking, with past pressure on Australian minerals, wine, and coal potentially backfiring.”
He believed that China’s geostrategic advantage in rare earths would diminish, leading more Western countries to turn to Australia, Canada, Greenland, and even Africa for alternative cooperation. He stated that “Beijing will face a continuous reaction of rare earth outsourced production. Simply put, this is not just a supply chain restructuring but a symbol of the transfer of strategic dominance in rare earths from Southeast Asia to the Southern Hemisphere.”
Sun Guoxiang also added, “Lynas’ technological breakthrough represents a structural turning point in the global rare earth supply chain. This will weaken China’s monopoly and strategic leverage, promote diversification of global industrial chains and policy coordination with Western countries, gradually challenging Beijing’s influence in the rare earth sector.”