Japan, India reach rare earth deal

May 2, 2012 (Source: Jakarta Post) — Japan and India reached a basic agreement Monday to jointly develop rare earths, which are indispensable for many high-tech products, and supply Japan with about 14 percent of its rare earth needs.

Japan also was to agree Tuesday with Kazakhstan to cooperate in the development of rare earths and other resources.

These moves will diversify Japan’s supplies of the important minerals, and reduce its dependency on China in this field.

Indian Rare Earth Ltd., a company affiliated with India’s Atomic Energy Department, and Toyota Tsusho Corp. will complete a plant in Orissa, India, by the end of June to extract rare earths from uranium residue and start production of the minerals in August.

At the nations’ first ministerial-level economic dialogue in New Delhi, officials from both countries agreed to ensure the deal can be officially confirmed by the Indian government. Economy, Trade and Industry Minister Yukio Edano was among the attendees.

Rare earths to be produced include lanthanum, which is used for hydrogen battery electrodes; cerium, used in catalytic converters on gasoline engine exhaust systems; and neodymium, used in hybrid car motor electrodes.

Full-scale production at the plant will supply about 4,000 tons of rare earths each year to Japan, enough to meet 14 per cent of the nation’s annual consumption.

According to Japan Oil, Gas and Metals National Corporation, India has 1.1 million tons of rare earths, the world’s fifth-largest reserves. However, its annual production is no more than 2,700 tons. Japan’s technology is expected to promote rare earth production in resource-rich India and improve its recovery efficiency.

On Tuesday, Edano visited Kazakhstan and was to sign an agreement with Kazakh Industry and New Technologies Minister Aset Isekeshev to cooperate on the development of rare earths and other important minerals.

In line with these talks, JOGMEC, Sumitomo Corp. and Kazakhstan’s state-owned resource company Kazatomprom JSC are set to agree to jointly develop dysprosium, which is essential mainly for electric vehicle motors, and other resources.

The firms plan to recover the mineral from uranium residue and export 20 tons to 30 tons of dysprosium to Japan this year and 60 tons next year.

Japan has relied on China for almost its entire annual dysprosium imports of about 500 tons to 600 tons.

Japanese Foreign Minister Koichiro Gemba and Indian External Affairs Minister S. M. Krishna agreed during talks Monday to build new framework for dialogue on marine and cybersecurity issues.

During their bilateral strategic dialogue at a New Delhi hotel, they also agreed to closely cooperate on the use of space and to promote talks for the conclusion of a Japan-India nuclear treaty.

How Will Japan’s Rare Earth Deal with India Impact the Rare Earth Market?

Japan’s rare earth market¬†will likely be influenced by the new deal with India. This partnership has the potential to shake up the rare earth market, affecting global supply and demand. As Japan seeks to diversify its sources, this deal can lead to significant changes in the industry.

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