Australian rare earth miners look to EuropeAustralian miners...

Australian rare earth miners look to Europe
Australian miners look to help meet European demand for rare earths in wake of Japan crisis

Mike Corder, Associated Press, On Wednesday December 1, 2010, 8:57 am

THE HAGUE, Netherlands (AP) -- Australian miners of rare earth metals said Wednesday they believe the recent freeze of sales from China to Japan will give their fledgling industry a boost.

Miners were using a rare earths conference in The Hague to discuss cooperation with Europe in the aftermath of the two-month ban on Chinese exports of the valuable metals to Japan's high-tech industries.

China produces more than 90 percent of the global output of rare earths, used in products ranging from cell phones to hybrid car batteries. Beijing imposed a ban in September on sales to resource-poor Japan after a diplomatic spat.

Richard Brescianini of Arafura Resources Ltd. said the crisis "heightened anxiety" about supply alternatives and led to an increase in interest in his company's mining plans.

A number of companies in North America -- notably Molycorp Inc. in the U.S. and Thompson Creek Metals Co. in Canada -- are also hurrying to open or reopen rare earth mines in response to a surge in the prices of many of the minerals.

Arafura is one of two Australian companies getting close to mining rare earths. Brescianini said the company's Nolans Bore mine north of the central city of Alice Springs will likely begin production in late 2013.

Lynas Corporation Ltd.'s executive chairman Nick Curtis said his company's Mount Weld mine in Western Australia's gold mining region is on track to begin production in 2011.

"We will produce a mixed suite of rare earths at 11,000 tons per annum this time next year and at 22,000 tons per annum about a year later," he told The Associated Press on the sidelines of the conference at the Dutch foreign ministry.

Curtis said a major supply deal his company signed last week with Japanese conglomerate Sojitz Corp. may have been helped by uncertainty about Chinese supply.

The deal gave Sojitz exclusive import rights for 9,000 tons a year of Lynas' rare earth metals. Sojitz also agreed to seek up to $250 million in funding from Japan to develop the project.

"We think that's part of the response of the Japanese to the vacuum which China has left in terms of the supply of rare earths to the non-China market," Curtis said. "We think that's positive."

Jaakko Kooroshy, a policy analyst at the Hague Centre for Strategic Studies which helped organize the conference, said it would help forge links between Europe and Australia.

"Europe is looking at diversifying its supply and for that Australia is important, but policy makers have not been dealing with this issue so far," he said, adding that the one-day event would get delegates thinking "how Europeans can help Australians develop resources, how Australians can help Europeans ensure security of supply."

Refining rare earth metals produces toxic waste, and relatively lax environmental regulations in China were one reason the country came to dominate production.

Brescianini said that is changing, and Australia's tough mining and environmental regulations would now give the nation a competitive advantage marketing its rare earths.

"It's a bit like the blood diamond situation ... suddenly it wasn't the right thing to be taking diamonds from particular organizations, particular countries," he said, referring to a backlash against diamonds mined in conflict zones. "Because of the use of rare earth elements in green technologies, people will like a nice clean supply chain."

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