Lynas Rare Earths has signed a long-term partnership agreement with South Korean magnet manufacturer JS Link to establish a rare earth permanent magnet factory in Kuantan, Malaysia, with an operating capacity of 3000 tonnes per annum of NdFeB sintered magnets. Lynas will invest approximately A$50 million in ordinary equity of JS Link to support construction of the facility, representing approximately 4.58 percent of JS Link on a fully diluted basis. The agreement follows an earlier memorandum of understanding signed in July 2025 and represents a significant step in Lynas’ strategy to expand beyond rare earth processing into downstream magnet manufacturing.
The partnership addresses a critical gap in the rare earths supply chain outside China. By combining Lynas’ rare earths processing expertise with JS Link’s magnet manufacturing capability, the two companies aim to create a stable, Western-controlled supply chain for permanent magnets used in automotive, wind energy, and electronics applications. Lynas will supply rare earth materials to both JS Link’s existing South Korean facility and the new Malaysian factory at commercial prices under an exclusive supply arrangement extending to January 2038. This long-term commitment provides revenue visibility and demonstrates confidence in the partnership’s viability.
The Malaysian location offers strategic advantages beyond cost considerations. Kuantan already hosts Lynas’ advanced materials processing plant, enabling operational synergies and reduced logistics costs. The factory is expected to create approximately 400 new jobs in Malaysia, contributing to economic development while serving key regional markets in Korea, Malaysia, and beyond. The project aligns with Lynas’ Towards 2030 growth objectives, which emphasise expanding the non-China metal and magnet supply chain at a time when Western manufacturers increasingly seek supply chain diversification away from Chinese dominance.
For investors, the 4.58 percent equity stake in JS Link provides exposure to the magnet manufacturing upside while the escrow period of three years limits immediate liquidity. More importantly, the long-term supply agreement through January 2038 locks in revenue from magnet production, creating predictable cash flows from a higher-value-add business segment. The arrangement reduces Lynas’ reliance on commodity-priced rare earth concentrates and positions the company within the higher-margin magnet manufacturing industry.
Key developments to monitor include timelines for Malaysian factory construction and the progression of JS Link’s existing South Korean facility from sampling toward full commercial production. Investor attention should also focus on pricing mechanisms within the long-term supply agreement and any updates on customer commitments for magnet supply. The partnership’s success depends on JS Link’s ability to secure automotive and renewable energy customers in competitive global markets. This announcement is price sensitive and has been flagged as material information by the ASX.
View the full ASX announcement (PDF)
About Lynas Rare Earths Limited (ASX: LYC)
Lynas Rare Earths Limited engages in the exploration, development, mining, extraction, and processing of rare earth minerals in Australia and Malaysia. The company operates the Mt Weld rare earths mine in Western Australia, a processing facility in Kalgoorlie, and an advanced materials plant in Gebeng, Malaysia. It produces light rare earths including lanthanum, cerium, praseodymium, and neodymium, as well as heavy rare earths, making it the largest producer of separated rare earths outside China.
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