Lynas Corporation will implement a minimum price schedule for its rare earths (REO) products effective July 1.

In announcing this, Chief Executive Officer Eric Noyrez said the company believed that only prices which were sustainable for producers and customers would allow the REO market to grow to its full potential over the long-term.

"It is our responsibility as a REO producer to invest in the necessary environmental protection measures and encourage the development of sustainable practices that are safe for people, safe for the environment and secure for customers," he said in a statement today.

The company said the REO market had the potential to grow between five and six per cent annually over the medium-term. This growth is expected to come from key sectors such as permanent magnets, automotive catalytic converters and fluid cracking catalysts, it said.

However, these long-term growth rates required long-term pricing visibility to justify investment by customers and producers, the company said. Media reports had said recently that major industry participants in China acknowledged that recent REO price falls were not sustainable.

"Should this trend continue, the industry risks losing production and triggering a similar supply crisis to that of 2010 – 2011 when prices were driven up sharply to peak levels above US$100/kg, destroying demand in many market sectors," Lynas said.

Currently, the aggregate selling price of typical light rare earths is about US$16 to US$20 per kilogramme, around 25 per cent below the minimum sustainable level for producers.

Apart from that, the company also announced that the cracking and leaching unit of the Lynas Advanced Material Plant in Malaysia (LAMP) achieved 100 per cent of its 11,000 tonnes per annum Phase 1 nameplate production capacity.

It said production rates in the separation and product finishing units would be determined according to the rate of product approval by customers and market demand.