Wed, Nov 24, 2010 - Page 10 News List

Australia commits to rare earths supply to Japan

Reuters and Bloomberg, CANBERRA

Australia promised yesterday to be a future long-tem supplier of rare earths to Japan, after China suspended shipments of the minerals to its neighbor.

After Japanese Foreign Minister Seiji Maehara raised the issue during strategic and trade talks in Canberra, Australian Foreign Minister Kevin Rudd hinted rare earths would likely form part of a free trade pact being negotiated with Tokyo.

“The Australian government understands the significance of rare earths globally. Australia stands ready to be a long term, secure, reliable supplier of rare earths to the Japanese economy,” Rudd told reporters in a new conference with Maehara.

For the past two months, China had suspended shipments to Japan of rare earths, crucial minerals for many high-tech products, due to a spat over disputed islands in the East China Sea.

China’s General Administration of Customs said in an e-mail that rare earth exports from China declined 77 percent to 830 tonnes last month from 3,660 tonnes a month earlier after the government reduced shipment quotas for the second half.

Total exports were 32,990 tonnes in the first 10 months, according to the e-mail, which was sent on Monday.

Japan, the world’s fourth biggest user of the minerals, and Vietnam signed a deal to cooperate on rare earths, according to a statement last month from Japan’s trade ministry, which didn’t give details. Mongolian President Tsakhia Elbegdorj earlier this month called for Japanese companies to invest in rare earths in his country.

Maehara, on his first bilateral visit overseas, said he was making Japanese access to rare earths, and security of resource supplies generally, one of his top foreign policy priorities.

The issue overshadowed discussions on security concerns like North Korea, but the meeting took place before reports of North Korea firing dozens of artillery shells at a South Korean island.

“We will be looking to collaborate on the area of rare earths and I believe this is a particularly excellent outcome in terms of the agreements we have reached on this occasion,” Maehara said. “We are very pleased that Australia is also able to give us a long-term commitment to rare earths.”

Australia is endowed with an abundance of rare earths, but it will be 2013 before the first of two mines under construction is completed. The second mine is scheduled to start up in 2014 and Chinese companies have been anxious to secure stakes in Australian mines.

However, Australia’s government last year blocked plans by China Non-Ferrous Metal Mining Co (中國有色礦業) to invest A$252 million (US$247 million) in Australian rare earths miner Lynas Corp. Both Australia and Japan agreed yesterday to hold fresh negotiations on a free trade pact in January.

Australia and Japan started free trade negotiations in April 2007, hoping to expand the US$58 billion two-way trade relationship, but the talks have become bogged down over agricultural market access.

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