Jack Lifton, an independent consultant, speaker and author on rare earths, says Japan has the most to fear from Chinese import restrictions. When it comes to high-tech goods, “anything that’s not made in China is made in Japan,” said the Michigan-based Lifton, who has advised the Japanese government on the issue.

 

On Friday, Tokyo released a set of “comprehensive rare earth measures” to ensure a stable supply for Japanese industry. The Ministry of Economy, Trade and Industry outlined five main areas of focus, including speeding development of rare earth alternatives, turning Japan into a major global center for rare earths recycling and helping manufacturers install equipment to reduce rare earths consumption. The government will also support Japanese companies in acquiring concession rights to rare earths mines outside of China and study the possibility of stockpiling rare earths reserves.

Japan announced a new accord with Mongolia the following day. At a meeting between Prime Minister Naoto Kan and Mongolian Prime Minister Sukhbaatar Batbold, the two countries agreed to cooperate in developing rare earths mines in Mongolia.

The new partnership comes on top of ongoing projects launched recently by major Japanese companies seeking to diversify their rare earths sources (“Japan develops vehicle motor free of rare Earth elements,” 1 October 2010 HSNW).

Toyota Motor Corp. said last week it set up a rare earth task force. An affiliated trading company, Toyota Tsusho Corp., established a rare earths mining joint venture in Vietnam two years ago. “There are many risks in depending on one nation,” company spokesman Morimasa Konishi said.

 

The company expects the Vietnam mine to begin supplying minerals to Japan in 2012, he said. Toyota Tsusho has also invested in a similar project in India, which should begin operating next year.

Toshiba Corp. and Sumitomo Corp. have each launched rare earth joint ventures in Kazakhstan over the past year. Australia’s Lynas Corp. said last week that it had signed a deal to supply a major Japanese company with rare earths from its Mount Weld project in western Australia. Lynas did not name the company and said it was in talks with other firms in the United States, Japan, and Europe.

South Korea — home of tech giants Samsung Electronics Co. and LG Electronics Inc. — has taken notice of its neighbors’ dispute. It plans to spend 17 billion won ($15 million) by 2016 as part of a long-term plan that seeks to secure 1,200 metric tons in rare earths reserves, the Ministry of Knowledge Economy said in a statement.

Seoul expects prices to climb and supplies to become increasingly unstable, as its main supplier China consistently decreases exports, the statement said.

 

The policy plan, titled “Plans for Stable Procurement of Rare Metals,” will be finalized in mid-October, after further consultations, the ministry said.

The plan will include strategies on developing domestic mines and investing into research for alternative materials and recycling technologies.

In the United States, legislation to jump start domestic rare earth production appears to be gaining momentum. At a Senate subcommittee hearing last week, lawmakers expressed concern that the United States was so reliant on China. David Sandalow, assistant secretary of energy for policy and international affairs, told the hearing there were “potentially very serious implications” if the United States lost access to rare earths. “It could interrupt the development of clean energy technologies,” Sandalow said. “It could interrupt commerce.”

Lifton, the consultant from Michigan, believes the rare earths issue represents “the tip of the iceberg” as China’s ambitions and economy grow rapidly. Similar supply worries could emerge about other high-tech metals that China sends to the world. “The Chinese are pretty set on moving manufacturing to their country,” he said. “They don’t think that’s sinister. That’s just doing business.”