Lynas Rare Earths has inked new agreements with Japan Australia Rare Earths (JARE) that will further strengthen its balance sheet and support funding of capital projects designed to meet accelerating global demand for rare earth materials.
JARE is a special purpose company established by state-owned Japan Organization for Metals and Energy Security and the Sojitz Corporation. Lynas and JARE are parties to a long-term senior loan facility.
Under the new agreements, JARE will provide a contribution of A$200 million through a subscription for ordinary shares in Lynas and forego the US$11.5 million interest due under the loan facility for the period from 1 January 2016 to 31 December 2016, which was previously deferred by JARE.
JARE’s contribution will support Lynas’ ambitious growth agenda, and may include current and planned projects designed to increase production of light rare earth and heavy rare earth materials. As market demand increases, the funding will assist Lynas to meet its objective to grow with the market.
“Lynas has a huge appetite for growth and a large capital investment plan. This $200 million capital investment from the Japanese government, through JARE, will boost our balance sheet and assist in assuring the delivery of our major growth projects,” said Lynas CEO and Managing Director Amanda Lacaze.
“JARE has been a valued and strategic partner to Lynas since 2011 and we welcome these new agreements which better reflect demand forecasts from the Japanese rare earths market.”
Lynas Rare Earths is the only significant producer of separated rare earths outside of China.
Source: Lynas Rare Earths