Highlights

• Noveon Magnetics and Lynas Rare Earths sign a Memorandum of Understanding to create a traceable 'mine-to-magnet' pathway for critical US industries.
• The partnership aims to support US Department of Defense supply chain mandates by developing domestic rare earth magnet production.
• The collaboration seeks to reduce dependence on Chinese rare earth suppliers and strengthen US industrial independence.

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In a move signaling renewed momentum for U.S. industrial independence, Noveon Magnetics—according to the company, the nation’s only producer of sintered rare earth magnets—and Australia’s Lynas Rare Earths have signed a nonbinding Memorandum of Understanding (MoU) to establish a domestic supply chain for rare earth permanent magnets. The collaboration aims to deliver a fully traceable “mine-to-magnet” pathway for U.S. defense, automotive, and industrial sectors.

Lynas, the world’s largest producer of separated light and heavy rare earths outside China, will supply both LRE (NdPr) and HRE (DyTb) oxides to Noveon’s magnet manufacturing base in San Marcos, Texas, which already leverages its patented EcoFlux™ process using recycled magnet feedstock. Together, the two plan to scale magnet alloy and finished magnet output for critical end-users, addressing the Pentagon’s urgent demand for non-Chinese rare-earth supply.

Strategic Significance

The partnership directly supports the U.S. Department of Defense’s magnet supply chain mandates under the Inflation Reduction Act and Defense Production Act Title III. While the MoU remains preliminary, it underscores a coordinated effort to localize refining and magnet-making—industries long dominated by China’s vertically integrated giants like JL Mag and Ningbo Yunsheng.

If executed, the alliance could finally connect two critical missing links: reliable oxide separation (Lynas) and domestic sintered magnet production (Noveon). Yet questions remain—particularly whether U.S.-based capital markets, policy incentives, and defense contracting timelines will move fast enough to make this viable.

What’s Missing—and What’s Next

Key unknowns include the location of alloying operations, the capital intensity of Noveon’s expansion, and the realistic volume that can be displaced from imports from Asia. Investors should also note the nonbinding nature of the MoU; definitive agreements will determine how much near-term production capacity actually materializes.

Market Lens: Fundamentals and Technicals

Lynas Rare Earths (ASX: LYC) trades near A$6.10, up modestly after the announcement but still 35% off 2023 highs. Its fundamentals remain strong, with FY25 cash reserves over A$700M and stable NdPr output from Malaysia and Mt Weld. Noveon, a privately held company, could see valuation upside if the partnership attracts U.S. government grants or DoD contracting.

From a technical standpoint, Lynas appears to be consolidating in a broad range, suggesting investor caution but long-term resilience as U.S. supply ambitions deepen.

This deal, while early, validates the thesis driving Rare Earth Exchanges coverage all year: America can’t reindustrialize without magnets—and magnets can’t exist without partnerships like this.

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