Japan and India sign rare earth deal to reduce dependency on China

Japan and India have reached a basic agreement to jointly develop rare earths, used in the production of several high-tech goods from weapons to cell phones, and supply Tokyo with about 14% of its rare earth needs, reports The Mainichi.

The treaty follows Japan pact with Kazakhstan, signed last week, to cooperate in the development of rare earths and other resources.

Both agreements are considered strategic, as it will diversify Japan's sources of rare earth, reducing its dependency on China’s exports of the elements.

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.

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

Currently, more than 90% of rare earths metals are processed in China, country that has increased export restrictions on these elements as, it claims, needs to guarantee supplies for the internal market and protect the environment. The policy has generated protests from foreign manufacturers who rely on Chinese rare earths. They argue China’s restrictions aim to raise rare earth prices artificially to give its own producers higher profits.