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Rare earths problem brought to ground

It’s one scare after another in these nervy times. If it’s not the China cyber threat that has us worried, it’s another DDoS attack or the latest poisoned search scam.

But at least one crisis is being quickly resolved.

Remember rare earths? China cut off supply to Japanese traders during their East China Sea squabble two months back.

China, which supplies 97% of the world’s rare earths, denied that it had halted supply, which would breach WTO rules, claiming it was merely cutting quotas.

But Japanese traders were unable to obtain the elements, which are essential for the manufacture of precision instruments, hybrid cars, missiles, mobile phones and networks.

Rare earths aren’t particularly rare. They’re just dirty and dangerous to get at, and China dominates supply because of its willingness to expose workers to radiation and other hazards.

Clearly it’s a problem for manufacturers if the main supplier is unreliable.

But in the last month we’ve seen a series of Japanese announcements involving fresh rare earth sources.

The biggest is a government-brokered deal between trading house Sojitz and Australian mining firm Lynas. The 8,500-tonne contract will meet up to 30% of Japan’s demand over the next ten years.

Another Japanese trading house, Toyota Tsusho, plans to build a plant for rare earth minerals processing in Orissa, India.

Like the Australian deal, this also followed an agreement between the two governments. The new plant is expected to supply up to 4,000 tonnes a year from 2012, AFP reports.

Then, with a nice green approach to the problem, Hitachi has begun extracting rare earth magnets from discarded batteries and other products.

It has developed a machine capable of extracting 100 magnets per hour, eight times the current rate, and believes it can boost its use of recycled rare earth materials to 10% by 2013.

Nothing like a security flap to scare up new sources. We are sure to see fresh Australian and North American mines come onstream in the next few years. The competition will do everyone good.