Published by Global Banking & Finance Review®
Posted on March 25, 2026
4 min readLast updated: March 25, 2026
Add as preferred source on GoogleAustralia’s Arafura Rare Earths warns that with the U.S. and Japan securing most non‑Chinese NdPr supply, Germany and South Korea remain vulnerable amid China’s export curbs. Arafura’s Nolans project targeting 4,440 t/y from late 2029 could cover ~4% of global needs.
By Melanie Burton
CANBERRA, March 25 (Reuters) - The U.S. and Japan are quickly locking up rare earths supply, leaving industrial powerhouses Germany and South Korea exposed, said the CEO of Australia's Arafura Rare Earths, which is negotiating final supply agreements.
Since the world's top rare earths producer China placed export restrictions on some of the minerals last year, roiling the automotive and defence industries, the U.S. has led a push to diversify global supply chains and secure new supply sources.
Of that non-Chinese supply, there are only two Western companies producing at scale, Australia's Lynas Rare Earths and MP Materials in the U.S., with its Mountain Pass deposit.
The U.S. government secured Mountain Pass supply as part of a deal with MP Materials last year.
"(That) doesn't meet all their needs, but meets a fair chunk of it," Arafura CEO Darryl Cuzzubbo said.
Meanwhile, Lynas Rare Earths this month agreed a long-term supply deal with Japan Australia Rare Earths through 2038 and a smaller, shorter-term deal with the Pentagon.
"So the EU and in particular, Germany, and Korea are quite exposed, right? Where are they going to get their supply from?" Cuzzubbo said.
Since Lynas' supply was locked up, Arafura has noticed more urgency from potential buyers, he added.
NOLANS PROJECT SUPPLY
Arafura plans to supply from its Nolans Project in the Northern Territory 4,440 metric tons a year of neodymium-praseodymium (NdPr) oxide, a key rare‑earth magnet material from the second half of 2029, representing around 4% of global supply.
It already has supply agreements with automakers Hyundai Motor and Kia as well as Siemens Gamesa Renewable Energy and commodity trader Traxys.
Arafura is seeking to place another 1,200 tons of NdPr oxide to bring secured supply to 80% of planned output as a condition required by its lenders, he said. Once that is achieved, Arafura will be able to make a final investment decision and begin constructing the project.
"We haven't put all of our eggs into one basket, so we're negotiating with multiple parties, and the one that gets there first on the right sort of pricing regime is the one we're going to go with," he said.
Arafura was looking for terms closer to those achieved by Lynas, he said.
In both deals, Lynas locked in a price of $110 per kilogram for NdPr, with additional terms around payments for higher prices. China-based prices are currently around $103 a kg.
CRITICAL MINERALS RESERVE
Arafura, which has backing from the Australian government, expects to supply rare earths to Australia's A$1.2 billion ($836 million) critical minerals reserve, which is expected to start operating in the second half of this year.
While details of how the reserve will work are still being hammered out, Cuzzubbo said he wanted to see a floor price tied to an independent international benchmark, like the one that is run by Benchmark Minerals Intelligence - and separate from China, which has dominated pricing.
"The market is broken, you need to create a functioning market," he said.
"A floor price will take uncertainty out of pricing, which has been very uncertain given China's control of pricing and that will help bring in investors," he said.
"The strategic reserve can help ... get projects up. But also ... it is a bit of a bargaining chip that the Australian government can use with its allies."
($1 = 1.4349 Australian dollars)
(Reporting by Melanie Burton; Editing by Jamie Freed and Thomas Derpinghaus)
The US and Japan have secured rare earths supplies, leaving Germany and South Korea with fewer options as China restricts exports.
Arafura's Nolans Project in Australia aims to produce 4,440 metric tons a year of NdPr oxide starting in 2029, making up 4% of global supply.
Hyundai Motor, Kia, Siemens Gamesa Renewable Energy, and Traxys have signed supply agreements with Arafura.
Recent deals, like Lynas', locked in a price of $110 per kilogram for NdPr with provisions for higher market rates.
Arafura must secure supply agreements for 80% of its planned output to satisfy its lenders and move forward with construction.
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