US Signals Price Floors for Rare Earths to Counter China's Grip
Reports of talks with Australia's Lynas follow a landmark deal with MP Materials, signaling a new Western strategy to de-risk the critical minerals supply chain.
A strategic shift in the global materials landscape is gaining momentum as the United States government signals deepening support for rare earth producers, a move aimed squarely at loosening China's long-held dominance over the critical minerals sector.
Australia’s Lynas Rare Earths, the world's largest producer outside of China, is reportedly in discussions with Washington to secure price floors for its materials, according to a Bloomberg report. While the talks are not yet public, the development follows a landmark public-private partnership established between the U.S. Department of Defense (DoD) and America’s leading producer, MP Materials (MP).
That deal with MP Materials, a company with a market capitalization of over $12 billion, established a crucial precedent. In mid-2025, the DoD guaranteed a price floor for its U.S.-sourced neodymium-praseodymium (NdPr) oxide, a key input for the powerful permanent magnets used in everything from electric vehicles to F-35 fighter jets. According to a report from Columbia University, the agreement inlcuded a 10-year price floor for NdPr oxide at $110 per kilogram, effectively de-risking the company's domestic processing investments.
This deliberate industrial policy underscores a growing recognition in Washington that market forces alone may be insufficient to build a secure, non-Chinese supply chain for minerals essential to national security and the green energy transition. For decades, China has used state subsidies and control over processing to dominate the market, making it difficult for Western firms to compete.
Government-backed price floors and offtake agreements provide the long-term revenue certainty needed to attract the massive private investment required for mining and refining projects. A potential agreement with Lynas would be a powerful second step, extending this security to a key international partner and further stabilizing the ex-China supply chain.
The U.S. government's strategy is part of a broader, multi-million dollar push to create a resilient "mine-to-magnet" domestic capability by 2027. The DoD has committed over $439 million since 2020 to bolster the sector. Lynas is already a beneficiary of this push, having secured a contract to construct a heavy rare earths processing facility in Texas.
Amanda Lacaze, CEO of Lynas, has previously acknowledged the significance of the U.S. support for MP Materials. In public comments, she has noted the challenges of competing in an "American-first" political environment while stressing the importance of sustainable prices for production outside of China.
The market implications are significant for the entire sector. Price stability mitigates the risk of Chinese price dumping, a tactic that has historically stifled investment in Western projects. For investors, it transforms the sector from a high-stakes bet on volatile commodity prices into a more predictable play on long-term industrial and geopolitical trends.
While the path to a fully independent Western supply chain remains long and capital-intensive, these moves represent a clear and decisive strategy. By establishing a financial safety net for cornerstone producers like MP Materials and potentially Lynas, the U.S. and its allies are methodically laying the foundation for a new era in critical minerals.