Lynas Rare Earths (ASX:LYC) has formalised a framework agreement with South Korean firm LS Eco Energy to develop a new rare earths metallisation facility in Vietnam.
The partnership aims to transform Lynas’ rare earth oxides into high-value metals, directly addressing the soaring international demand for non-Chinese sources of critical minerals.
Under the terms of the agreement, LS Eco Energy—a subsidiary of LS Cable & System—will oversee the construction of the facility.
The plant is designed to process a variety of Lynas products, with an initial focus on samarium metal production before scaling to include neodymium-praseodymium and heavy rare earths like dysprosium and terbium.
The materials are vital components in the permanent magnets used for electric vehicles, wind turbines, and advanced electronics.
The deal is underpinned by a financial commitment, featuring a cross-subscription of convertible instruments valued at approximately $30 million from each party.
The mutual investment underscores the long-term nature of the collaboration as both firms seek to capitalise on Vietnam’s emerging role as a regional processing hub.
"LS Eco Energy brings significant manufacturing expertise to the partnership, whilst Lynas has deep experience in the rare earths market," stated Lynas CEO Amanda Lacaze.
"This framework agreement demonstrates our joint commitment to continuing to grow industry capability and deliver success for both businesses."
At the time of reporting, Lynas Rare Earths' share price was $19.85.