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Highlights

  • Lynas and MB Inc. sign non-binding MoU to explore rare earths carbonate supply from Kelantan, Malaysia.
  • Agreement outlines framework for future feedstock supply to Lynas Malaysia’s Kuantan facility.
  • Collaboration focuses on leveraging Malaysia’s ionic clay deposits rich in heavy rare earth elements.

Lynas Rare Earths Ltd (ASX:LYC) is an Australia-based company focused on the mining and processing of rare earth elements, with operations in Western Australia and Malaysia.

The company has entered a Memorandum of Understanding (MoU) with Menteri Besar (MB) Inc., the strategic investment entity of the Kelantan State Government in Malaysia. The non-binding agreement outlines a potential collaboration for the supply of mixed rare earths carbonate (MREC) from rare earth resources located in the state.

LYC shares were trading 0.90% higher at AUD 7.85 per share at the time of writing on 30 May 2025. On a YTD basis, the share price has increased by over 20%.

Details of the MoU

The MoU sets the stage for MB Inc. and Lynas to negotiate definitive agreements, pending further discussions. The proposed supply of MREC would provide feedstock for processing at the Lynas Malaysia advanced materials plant in Kuantan once production at the Kelantan site begins.

The rare earth development project in Kelantan is a priority initiative for MB Inc., and the MoU seeks to establish a framework for cooperation between the state entity and Lynas in advancing Malaysia’s rare earths industry. Both parties intend to align efforts to support the growth of the sector through domestic resource utilization and potential downstream processing. Lynas Malaysia has operated in the country for over a decade and processes rare earth elements for use in electronics, electric vehicles, and other technology applications. The Kuantan-based facility is one of the few significant non-Chinese operations involved in the rare earths supply chain.

According to Lynas CEO and Managing Director Amanda Lacaze, the agreement with MB Inc. represents a collaborative approach to tapping into Malaysia’s ionic clay deposits, which are known for their high concentration of heavy rare earth elements. These elements are considered important for several high-tech industries due to their magnetic, optical, and catalytic properties.

Lacaze noted that the MREC to be produced under the potential agreement would need to meet strict environmental and technical standards in line with Lynas’s operational requirements and customer expectations in both Malaysian and international markets. While the MoU remains non-binding and subject to the outcome of further negotiations, it marks an initial step in exploring localised rare earth feedstock sources within Malaysia. The potential sourcing of heavy rare earth elements from Kelantan’s ionic clays is viewed as a move to enhance regional participation in the global rare earth supply network.