Australia is re-emerging as a key supplier of rare earths, agreeing a ten-year supply deal with Japan that averts a potential supply crisis.
Foreign minister Kevin Rudd announced an agreement with his Japanese counterpart Seiji Maehara following a meeting in the Australian capital yesterday that will reduce Japan’s reliance on Chinese-sourced elements, WSJ.com reported.
Japanese trading house Sojitz Corp said it would pay around $300 million (€224 million) for 8,500 tons of rare earth metals annually from Australian mining firm Lynas for the next ten years, Reuters reported – equivalent to 30% of Japan’s annual demand.
China is the world’s largest supplier of rare earths – elements used in mobile phones and other electronic equipment -, but has sparked fears of a supply crisis in recent months after reportedly halting supplies to Japan and other countries, and cutting export quotas for 2H10.
Rudd took the chance to talk up Australia’s position as a stable supplier of the elements, the Journal said, as he seeks to re-establish the country as an alternative source.
Rare element prices soared yesterday after figures revealed China’s exports dropped 77% month-on-month to 830 tons in October, Bloomberg reported.
Japan reached a similar supply deal with Vietnam in October, the news site said, as it looks to lessen its reliance on China.
Earlier this month Chen Jian, vice minister at China’s ministry of commerce, said quotas will be cut further in 2011, but promised no significant drops.