Media Release: Clayton Utz advises JARE on A$200 million capital investment and priority supply agreement with Lynas Rare Earths Ltd

16 Mar 2023
Time to read: 1 minutes

A Clayton Utz team has advised Japan Australia Rare Earths B.V. (JARE) in relation to further strengthening its partnership with Lynas Rare Earths Australia (Lynas), including an injection of A$200 million to support the funding of capital projects aimed at meeting global demand for rare earth materials. The new agreements between the two parties were formally signed on 7 March.

Co-Head of our Japan practice, Hiroyuki Kano, led our team, which included special counsel Shigeki Yamaura, and from the Energy and Resources team, partner Stuart MacGregor and senior associate Jon Prentice. Hiroyuki and Shigeki advised JARE on the capital investment to Lynas while Stuart and Jon advised on the new supply arrangement.

Under the new agreements, the Japanese market will receive certain priority supply rights over Lynas’ growth capacity until 2038. JARE (a special purpose company established by Japan Organization for Metals and Energy Security and Sojitz Corporation) will, in addition to the $200 million capital contribution, also forego the historic US$11.5 million interest due under the Loan Facility with Lynas.

In a statement released to the market on 7 March, Lynas CEO & Managing Director Amanda Lacaze welcomed the new agreements as demonstrating "the deep commitment of JARE to the ongoing growth and success of our company".

Commenting on our role, Hiroyuki said:

We congratulate JARE on its continued vital partnership with Lynas, which will provide an ongoing stable supply of rare earth to Japan into the future and is vital to support its advanced manufacturing industry. We are very honoured that JARE chose our firm to advise on this transaction and look forward to helping it further expand its strategic partnership with Lynas.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.