Rare earth producer Lynas (ASX:LYC,OTC Pink:LYSCF) has its eye on the Australian city of Kalgoorlie-Boulder as a potential site for the company’s new cracking and leaching plant.

The critical metals miner has penned a memorandum of understanding (MoU) with the city to undergo a due diligence review that would examine land availability, water, gas, electricity, access roads and other infrastructure needs.

The construction of a new processing plant will help Lynas continue in asserting itself as a major player in the rare earth sector and the only large scale miner and refiner outside of China.

The signing of the MoU comes less than five months after Lynas announced plans to relocate its current cracking and leeching plant in Malaysia to Western Australia as part of the company’s ambitious Lynas 2025 growth strategy.

“We are very pleased to announce this MoU with the City of Kalgoorlie-Boulder. Kalgoorlie has a rich mining history and continues to work with industry to develop the region and its communities,” explained Amanda Lacaze, CEO and managing director of Lynas.

Access to a skilled labor force was one of the selling points of Kalgoorlie-Boulder. According to Lynas, the city has agreed to actively work to build a local workforce for the plant.

City of Kalgoorlie-Boulder CEO John Walker welcomed the critical metals miner to the area and said his city will make a great locale for a downstream processing hub.

“We are looking forward to working with Lynas as they develop their interests in Kalgoorlie-Boulder and the Goldfields region, and obviously there are a number of ways we can assist them moving forward,” he said.

Kalgoorlie is known as the gold capital of Australia, although in recent years there has been growth in the nickel sector as well as the lithium and cobalt sectors in the region.

In addition to considering Kalgoorlie, Lynas has shortlisted Mount Weld — where Lynas currently mines for rare earth — as a potential plant location.

“The local councils in both of our preferred locations have welcomed the opportunity to host our Western Australian cracking and leaching facility and we look forward to updating the market on further developments,” added Lacaze.

This latest announcement from Lynas comes a few weeks after the US Department of Defense confirmed it was in talks with Australian officials regarding creating a rare earth supply chain between the two nations.

The sourcing of rare earths for green energy applications has been front and center lately as China and the US continue to grapple over trade.

As the leading producer of rare earth, China has on numerous occasions hinted at or imposed export limits on the technology metals, causing global concern of a shortage. As a result, the US has been looking into expanding its own domestic sector while finding friendly jurisdictions to import the metal from.

Shares of Lynas sat flat on Tuesday (September 10), trading at AU$2.43.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.