March 16 (Reuters) - Australia's Lynas Rare Earths ( LYSCF )

said on Monday its unit Lynas USA LLC has signed a

binding letter of intent with the U.S. government to finalise a

rare earth oxide supply agreement.

Under the deal, the Pentagon will allocate about $96 million

to buy light and heavy rare earth oxide products from Lynas,

with a floor price of $110 per kg for NdPr oxide, the company

said.

Lynas said the letter of intent sets out a framework for a

four-year supply agreement supporting U.S. national security and

supply-chain resilience objectives.

The new offtake structure follows a mutual decision to

revise the companies' earlier agreement due to uncertainty over

whether the planned heavy rare earth processing facility in

Seadrift, Texas, would go ahead, it added.

"Through this agreement, the U.S. Defense Industrial Base

will continue to have access to Light and Heavy Rare Earth

oxides that are essential for modern manufacturing," Lynas CEO

Amanda Lacaze said.

Rare earths, and the magnets made from them, are embedded in

small but critical amounts across devices from iPhones and

washing machines to F-35 jets, and power everything from EVs to

military systems.

The deal comes at a time when the United States has been

pushing to secure critical minerals and reduce reliance on

China, which produces around 90% of the world's rare earth

magnets.

Lynas is the world's largest rare earth producer outside

China.