Companies seek to reduce reliance on Chinese rare earths

September 25, 2012


With tensions over the disputed Senkaku Islands showing no signs of abating, Japanese businesses are looking for ways to reduce their dependence on China for rare earth elements, a vital component in several areas of manufacturing.

China accounts for more than 90 percent of the global output of rare earth elements and is the main supplier for Japan. While a major trading house assured imports so far have not been affected by the territorial row, any disruption in trade is certain to affect production by Japanese enterprises.

Rare earths is a generic term for 17 elements that enhance heat resistance or increase magnetic forces when mixed with metals. Sometimes called the vitamins of industry, these elements are indispensable ingredients in the production of vehicles and electrical appliances, where they are used in motors and magnets.

Concerns over supply became critical in 2010, when Japan arrested the captain of a Chinese fishing boat that rammed two Japan Coast Guard patrol vessels off the disputed islands in the East China Sea, which China calls Diaoyu. As tensions over the incident rose, China stopped its rare earth exports to Japan and prices soared.

Following the disruption in imports, the Japanese government began subsidizing corporate development to reduce or eliminate the use of rare earths, and several companies have found success with alternative technologies.

Dysprosium is considered the rarest of all rare earth elements, and Japan continues to rely on imports from China for nearly 100 percent of its dysprosium imports, according to a senior official of an electronic parts manufacturer.

Dysprosium retains its magnetic properties even at high temperatures, and it is an indispensable component of high-output motors used in electric vehicles, hybrid vehicles and other products.

TDK Corp., which supplies magnets for motors, has developed a magnet where dysprosium is painted on its surface alone rather than being mixed into the entire magnet body, reducing dysprosium use by half. The company plans to start producing the magnet for automobiles in October.

In February, Panasonic Corp. introduced equipment to extract magnets made of neodymium, another rare earth element, from used home electric appliances at its home appliance recycling plant in Kato, Hyogo Prefecture. The neodymium will be reused in air conditioner compressors and in motors for drum washers and other products, Panasonic officials said.

Honda Motor Co. plans by year-end to start extracting rare earths from nickel-metal hydride (NiMH) batteries used in hybrid vehicles. The automaker's dealerships will collect NiMH batteries from disused hybrid vehicles, and a plant belonging to ferroalloy manufacturer Japan Metals and Chemicals Co. will dismantle them to extract rare earths. Honda will then use the collected material in new hybrid vehicles.

The industry ministry estimates domestic demand for rare earths dropped from 31,000 tons in 2010 to 23,000 tons in 2011.

Major trading houses are exploring procurement from other countries as another way to mitigate a possible supply cut-off from China. Toyota Tsusho Corp. will start rare earths imports from India as early as the end of this year, and Sumitomo Corp. will import dysprosium from Kazakhstan from next year.

Governments around the world are also taking action. In June, Japan, the United States, the European Union and other countries filed a complaint against China with the World Trade Organization over rare earth export regulations.

"China may find it more awkward than before to play the diplomatic card of imposing an embargo on rare earths," said an official of a major trading company.

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A separation pool at a rare earths mine in China's Jiangxi province in 2009 (Asahi Shimbun file photo)

A separation pool at a rare earths mine in China's Jiangxi province in 2009 (Asahi Shimbun file photo)

  • A separation pool at a rare earths mine in China's Jiangxi province in 2009 (Asahi Shimbun file photo)

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