New government regulations in the United States and European Union are beginning to change purchasing behaviour in the rare earth supply chain, pushing buyers toward non-Chinese suppliers as compliance requirements make sourcing from China increasingly difficult for companies selling into regulated markets, the chief executive of Lynas Rare Earths has said.
Speaking at an event in Canberra, Lynas CEO Amanda Lacaze said the US is introducing procurement regulations next year that include restrictions on the acquisition of certain magnets, tantalum and tungsten, while the EU is bringing in sourcing restrictions under its critical raw materials framework. “In both cases, we are observing changed purchasing decisions so that consumers can comply with the regulations,” she said.
The shift comes after years in which convincing international customers to pay more for non-Chinese rare earths proved difficult, despite China’s dominance as the world’s largest and lowest-cost producer of the metals and magnets used across automotive, defence and technology industries. Beijing’s decision to restrict exports of seven rare earth elements last year in response to US tariffs exposed global manufacturers to supply risk and accelerated government-level action to develop alternative supply chains.
Washington has pledged to support higher prices for domestic and allied rare earth producers to stimulate non-Chinese supply, but regulatory mandates are proving a more immediate catalyst for changed procurement decisions than price signals alone. Lacaze called for governments beyond the US and Japan to go further, advocating for floor prices to be set as a tool to make non-Chinese rare earth production commercially viable at scale. Australia is revising its strategic reserve policies and its resources minister confirmed in March that the reserve will include a floor price element.
Perth-headquartered Lynas, which operates a processing facility in Malaysia, is the world’s largest rare earth producer outside China and stands to benefit directly from the regulatory-driven shift in buying patterns.
