Continued from Part One.
The Japanese moves come after China had held back some shipments of rare earth elements over a year ago following tension between the two neighbors over the disputed ownership of a string of small islands in the East China Sea.
Besides India, Japan was also planning to import 400 tons from Kazakhstan and 9,000 tons from Australia in 2013, according to a Japanese Trade Ministry official.
MetalMiner has been tracking the new bonhomie between Japan and India on the rare earth front since July this year. In October, MetalMiner had reported the news that Japan and India were actively thinking of striking up a new relationship on the rare earth minerals supply front. The November MoU was the formal step taken in that direction.
For both Japan and India, this new cooperation has opened up a new “front” against China.
For India especially, it will not only mean “cocking a snook” at its one-time adversary and now active trade partner, China, it will also mean re-booting an industry which it had once led from the front ranks.
Despite having lesser reserves than the US and other nations, India has always been a far larger producer of rare earths. Almost all the leading rare earth mineral-producing countries including India were, however, done in because of cheap imports from China.
India had also lost out because of the protectionist environment that had forced its critical industries to depend on high-technology imports. This new MoU will also give a new life to the Indian Rare Earths Limited (IREL), a Public Sector Undertaking, set up in the early 1950s.
In a related development, agency reports here said the Inner Mongolia Baotou Steel Rare Earth Group Hi-Tech, China’s largest producer of light rare earths, had announced it would suspend production for a month to try to stabilize falling prices.
The move is similar to the one made by the company in October last year for the same reason.
Sohrab Darabshaw contributes an Indian perspective to MetalMiner.