Japan loosens China's grip on rare earths supplies

http://www.cnbc.com/id/101973608

Hopefully the Japanese come to table with some more bags of cash to ensure that they get their 8500 tons in 2018..

Japan loosens China's grip on rare earths supplies



Japan is pushing to secure at least 60 percent of its rare earth needs from outside China within four years, as it bolsters efforts to curb its dependence on the world's biggest producer of elements crucial in smart phones, computers and cars.
Japan aims to sign a deal as early as this month that would give it four types of light rare earths from India, and has helped fund an Australian rare earths mine and Malaysian processing plant built by Australia'sLynas.
Its search for supply security has also led to a joint venture in Kazakhstan, recycling rare earths from batteries and motor magnets, and even exploring for rare earths in the Pacific Ocean seabed. China currently produces about 90 percent of the world's rare earths.
Japan, which sources virtually all its rare earths from China, either directly or indirectly, has been trying to find new sources of supply since its neighbor held back shipments in 2010 during a row over disputed islands and then curbed global exports to preserve its own resources.

"It is critically important for Japan to secure sources of rare earths outside of China," said Akira Terakawa, deputy director at mineral and natural resources division of Ministry of Economy, Trade and Industry.
The Indian deal would provide 15 percent of Japan's needs. If Lynas is able to ramp up production as agreed, Japan could be sourcing more than 60 percent of its expected rare earths demand from outside China by 2018, based on Reuters calculations from Japanese demand data and growth figures provided by a trading house which deals with rare earths.
Japanese demand is expected to be about 18,000 tons a year in 2018, with Lynas supplying 8,500 tonnes a year to Sojitz and India providing 2,500 tons.
The Indian project, being undertaken by a subsidiary of the Indian Department of Atomic Energy and Japanese trading house Toyota Tsusho, aims to produce light rare earths elements such as cerium, a Toyota Tsusho spokesman said.

The two firms are negotiating commercial conditions, but the timing of an agreement has not been settled, he said.
Urban mining, seabed drilling
Japanese manufacturers like Panasonic, Toshiba and TDK all use rare earths in their products, while car makers like Toyota Motor and Honda Motor Co rely on rare earths for motor magnets that drive automated seats and windows, and for batteries used in hybrid vehicles.

Toyota, the world's best-selling car maker, has been trying to cut its use of rare earths metals and at the same time has been working to recycle the metals from nickel-metal hydride hybrid batteries to use in new batteries.
However recycling - dubbed urban mining - is seen only as a long-term solution, as there won't be enough used hybrid vehicles to tap for material until after 2025, according to Japan's government-backed research body New Energy and Industrial Technology Development Organization (NEDO).

Japan is particularly focused on alternative sources of the heavy rare earth element dysprosium, used in hybrid cars and energy saving appliances, for which supply is much tighter than for light rare earths elements like lanthanum and cerium.
"We are continuing our efforts to develop alternatives for dysprosium as there is a supply risk for the metal as it still heavily depends on China," said an official in the electronics, materials technology and nanotechnology department of NEDO.
Another Japanese trading house Sumitomo is working with Kazakhstan's state nuclear company to produce rare earth metals including dysprosium, and the joint venture sent a trial shipment to Russia in June, according to Sumitomo.
Sumitomo has said it aims to produce 1,500 tons of rare earths a year from the venture but has given no time frame.

Japan is not stopping at land-based sources of rare earths, with Deep Ocean Resources Development Co and Japan Oil, Gas and Metals National (JOGMEC) having snapped up two of 24 contracts issued by the International Seabed Authority to explore international waters for metals and minerals.
JOGMEC began a three-year program last year, drilling around 40 sites near Minamitorishima island in southern Japan to assess reserves.
"Our research is at an early stage and we still don't know how much rare earths there are in the deep seabed," a JOGMEC spokesman said.