Breaking news: Hitachi succumbs to China REE power

Another Japanese domino has fallen in the face of China’s rare earth power. Hitachi Metals will begin manufacturing neodymium-based magnets in China from 2013, according to the Nikkei news service. The move is being portrayed as Hitachi having to work within China’s export restrictions on REE, including neodymium.

This follows the decision by Japanese giant Showa Denko, reported on June 30, that it was shifting some of its rare earth alloy production to China. Showa Denko had until then resisted moving production of high-performance magnetic alloys (used in hybrid vehicle motors) outside of Japan in order to protect its technology data. Showa Denko had been trying to get around the Chinese restrictions on exports of neodymium and dysprosium by importing a blend of iron and REE to avoid the export bans, but China closed that loophole, too.

The same intellectual property concern applies to Hitachi: it has been making these magnets for use in electric and hybrid vehicles only in Japan out of the same motive, that is to protect its technology. Now it will join forces with an unnamed mining company to build a neodymium magnet plant in southern China near the source of the neodymium. As in the case of Showa Denko, this will involve about 20 per cent of its production moving across the East China Sea.

Hitachi is the world’s largest producer of neodymium magnets. Its brand Neomax (neodymium, iron ore and boron) are claimed to be the world’s strongest and highest-performance magnets. The company was a pioneer in the field of magnet technology and Neomax is, according to the Hitachi website, “not only the world’s best-selling rare earth magnet, but is also viewed by scientists and researchers around the world as having limitless potential applications“.

Back in December, Hitachi Metals and Molycorp announced a deal for a joint venture for the production of rare earth alloys and magnets in the U.S. Also that month, the Japanese industrial giant said it had developed machinery to harvest rare earth metals from discarded hard- disk drives and compressors as electronics makers seek to reduce their reliance on Chinese supply. The machine can extract 100 rare earth magnets from hard disk drives per hour, about eight times faster than manual labor, Tokyo-based Hitachi said in a statement. The company plans to get 10 per cent of its rare-earth needs through recycling when the business begins operating in fiscal 2013.