The Lynas Rare Earths Ltd (ASX: LYC) share price is under the spotlight after the ASX mining share revealed an agreement with the US government.
Lynas is one of the largest rare earth mining businesses in the world, with operations across the world.
Lynas reveals agreement with US government
The ASX rare earth share announced it had signed a binding letter of intent between Lynas and the US Department of War (DoW) to finalise a rare earth oxide supply agreement.
Under the deal, approximately US$96 million will be allocated to by the DoW for the purchase of light and heavy rare earth oxide products from Lynas. The floor price for the NdPr (Neodymium-Praseodymium) is US$110 per kilo.
Lynas said this letter of intent establishes a framework to finalise an agreement for the supply to support US national security and supply chain resilience objectives. The materials will be supplied by Lynas to the Department of War over a four-year period.
This offtake agreement follows the mutual decision to modify the original agreement between Lynas and the DoW based on significant uncertainty about whether the construction of the heavy rare earth processing facility at Seadrift, Texas, would proceed.
Lynas and the Department of War continue to discuss further supply arrangements including for heavy rare earth oxides.
Management comments
The Lynas Rare Earth CEO and Managing Director Amanda Lacaze said:
Lynas is pleased to sign this binding Letter of Intent with the U.S. Department of War. Through this agreement, the U.S. Defense Industrial Base will continue to have access to Light and Heavy Rare Earth oxides that are essential for modern manufacturing.
We thank the U.S. Government for working with Lynas to reach this mutually beneficial arrangement and look forward to finalising the definitive agreement in due course and continuing our productive engagement with the U.S. Government.
Final thoughts on the Lynas Rare Earth share price
The ASX mining share is an incredibly important business strategically because of all the technological uses of rare earths.
But, the Lynas share price is up around 70% in 2026 to date, so it’s certainly not as cheap as it was.
I’d be happy if I were a shareholder, but it doesn’t seem like great value today. Instead, I’d look at other ASX growth shares which could be better value.
