News: LYC INSIGHT-American quandary: How to secure weapons-grade minerals without China, page-15

Supply chain security continues to drive the rare earths story

23.4.2020

Supply chain security remains at the centre of the rare earths narrative as highlighted by Lynas Corporation (ASX:LYC) being awarded the phase-one contract for a heavy rare earth separation facility by the US Department of Defense this week.

Funding for phase one will allow Lynas and its partner Blue Line to complete detailed planning and design work for the construction of the facility in the US, which will help avoid the supply chain vulnerability that has been clearly exposed over the past year.

Concerns about the fragility of supply chains, particularly the Chinese dominated rare earths sector, have been around for some time and was undoubtably responsible for Australia and the US reaching a deal late last year to co-operate on developing their critical mineral assets.

Fuelled in large part by the trade war with China, US President Donald Trump has issued executive orders to secure critical minerals, especially rare earth, supplies outside of China while Australia set up its Critical Minerals Facilitation Office at the beginning of this year.

However, it is the COVID-19 pandemic that has really underlined how critical securing supply chains really is.

Not only did the outbreak halt production from China, which is still coming back online, it has also forced non-Chinese producers like Lynas to halt their operations due to movement controls designed to limit the spread of the virus

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