Australia’s Lynas Rare Earths has agreed to acquire Meteoric Resources in an all-share deal valued at approximately A$968 million (US$672 million), gaining control of the Caldeira ionic clay rare earth project in Brazil and significantly expanding its resource base outside China.

Under the binding scheme implementation deed announced on Thursday, October 1, 2026, Meteoric shareholders will receive 0.0207 new Lynas shares for each Meteoric share held, implying a value of A$0.286 per Meteoric share — a 68.4% premium to Meteoric’s last closing price of A$0.170. Upon completion, Lynas shareholders will own approximately 94.1% of the combined entity, with Meteoric shareholders holding about 5.9%.

The acquisition brings into Lynas’s portfolio the Caldeira project in Minas Gerais, Brazil, described as the largest known ionic clay rare earths resource outside China. Caldeira boasts a mineral resource of 1,631 million tonnes at 2,317 parts per million total rare earth oxides (TREO) and an ore reserve of 151 million tonnes at 3,524 ppm TREO, with a projected 23-year mine life.

According to Meteoric’s July 2026 definitive feasibility study, Caldeira is expected to produce an average of 12,500 tonnes of rare earth oxides annually, including 3,862 tonnes of neodymium and praseodymium (NdPr) and 127 tonnes of the heavy rare earths dysprosium and terbium. Caldeira’s annual NdPr output equals about 53% of Lynas’s FY26 output of 7,260 tonnes.

On a pro forma basis, the deal would lift Lynas’s Measured and Indicated TREO resources by about 79% and its ore reserves by about 26%.

“Lynas is very pleased with the potential to bring together the Caldeira deposit — the largest known ionic clay rare earth Mineral Resource outside China — and Lynas’ high-grade Mt Weld deposit and leading rare earth operations,” said Prof John Humphrey, Lynas Rare Earths’ Board Chair. “This will deliver on our Towards 2030 growth objective of adding resource and scale.

Expanding our operations into a new country will help Lynas maintain its leading position in the global rare earths supply chain and meet increased customer demand for rare earth materials”.

Dr Andrew Tunks, Meteoric Executive Chair, said: “I am very proud that the work of our team has attracted a partner of Lynas Rare Earths’ calibre to Caldeira. This project has been progressed with an intensive focus on the fundamentals: drilling, geological understanding, metallurgical recoveries and test work, including from our own pilot plant”.

The all-scrip structure preserves Lynas’s cash balance of approximately A$1.2 billion, which will cover Caldeira’s capital expenditure of approximately US$498 million. Lynas will also provide an unsecured interim funding facility of up to A$110 million to support Meteoric’s operations during the transaction process, with an initial tranche of A$35 million available following execution of the deed.

Lynas reported revenue of A$977.9 million and net profit after tax of A$222.4 million for the financial year ending June 30, 2026.

Despite the strategic rationale, Lynas shares fell as much as 7.8% to A$12.75 in early trade on Thursday, reflecting investor concerns about execution risk in a new jurisdiction and the capital required to develop Caldeira. Ord Minnett described the acquisition as “a decent deal” for Lynas but maintained a “lighten” rating with a A$14.00 price target.

The transaction is subject to several conditions, including an independent expert’s conclusion that the scheme is in the best interests of Meteoric shareholders, approval from the Brazilian National Council for the Industrialisation of Critical and Strategic Minerals, court approval, and support from at least 75% of votes cast by Meteoric shareholders.

The Meteoric board, which holds 2.6% of shares, unanimously recommends the deal, subject to no superior proposal emerging.

The scheme booklet is expected to be dispatched to shareholders in December 2026, with the scheme meeting expected in late January 2027 and implementation targeted for March 2027.

Lynas is the largest rare earths producer outside China, which holds a near-monopoly on mining and processing of the critical minerals. The acquisition of Caldeira represents a significant step in diversifying global rare earth supply chains and reducing reliance on Chinese production, at a time of robust demand for rare earths used in electric vehicles, wind turbines, electronics and defence applications.