ANOTHER major Asian economy has moved to shore up supplies of rare earths elements.
This, with South Korea revealing yesterday that it would develop rare earths in Vietnam, Australia, Kyrgyzstan and South Africa this year.
Asia’s fourth-largest economy also revealed it would co-operate with Japan for overseas development of the minerals, mostly used in electronic products.
The move comes after China last month cut quotas on exports for the first half of this year by about 35 per cent.
Earlier, China had cut export quotas for the second half of 2010 by 72 per cent.
The country supplies more than 90 per cent of the world’s rare earths.
While the moves are part of Beijing’s efforts to guard against volatility in the future supply of rare earths, they are a boom for emerging local producers.
Shares in emerging rare earths producer Lynas Corporation rose 11.6 per cent to $2.30 yesterday, adding to the double-digit gains of last week following news of the Chinese cutbacks.
Lynas, which will welcome former Telstra chief executive Dr Ziggy Switkowski to its board next month, claims its Mount Weld resource in Western Australia is the richest known deposit of rare earths outside of China.
The company is planning to be in production in the third quarter of next year. Lynas last month signed a supply deal with Japanese conglomerate Sojitz, giving the latter exclusive import rights for 9000 tonnes of Lynas’s rare-earth metals a year.
In return, the Japanese company will seek up to $US250 million ($246.7m) in funding from Japan to develop the project.
Yesterday’s move from South Korea comes after it said in December that it would seek to nearly quadruple combined self-sufficiency rates of rare earths and lithium to 26 per cent by 2019 from 7.3 per cent in 2009 as part of a broader move to improve self-sufficiency.
It plans to double combined self-sufficiency rates for rare earths and other strategic minerals to 10 per cent this year from 5.5 per cent last year.
Japan has also accelerated its search for new suppliers around the world.
Its annual demand for rare earths is more than 30,000 tonnes and it depends on China for about 90 per cent of its supply.
Toyota Tsusho Corp announced last month that it would start developing rare earths in India from 2011 and in Vietnam from 2013.
The Nikkei business daily reported yesterday that Japan would also step up its search for undersea mineral reserves in the Pacific with fully fledged surveys near Minamitorishima, an isolated island 2000km southeast of Tokyo.
Japan believes rare-earth metals and minerals such as manganese, cobalt, nickel, platinum and neodymium lie beneath the seabed near the island.