Many had anticipated a concrete announcement on the rare earth elements front by the end of the visit of Indian Prime Minister Narendra Modi to Japan, but lack of consensus over the pricing of the RE and the transfer of technology to allow industries to be set up in India were some of the contentious issues that continue to be discussed between both the nations, and a final nod on the partnership is now only expected next week.
Modi met with his Japanese counterpart Shinzo Abe earlier this week to discuss the contract further, according to media reports from Japan. Overall, India dubbed the visit a success with Modi returning home with development projects that promised to give US $35 billion to India over the next five years.
The Japanese are optimistic about securing a deal soon on the rare earth supplies front with India once consensus is arrived at on the pricing levels. A report by news agency Reuters said Japan’s aim was to secure at least 60 percent of its rare earth needs from outside China in the next four years. If the deal with India for four types of rare earth is secured, it will take care of about 15 percent of Japan’s total rare earth needs, as the country tries to wean away off its dependence on China, the world’s biggest producer of elements crucial in smartphones, computers and cars. China currently produces about 90 percent of the world’s rare earths.
The Indian project is being undertaken by Indian Rare Earths, a subsidiary of the Indian Department of Atomic Energy and Japanese trading house Toyota Tsusho Corp, and aims to produce light rare earths elements such as cerium. The Reuters report said the two firms were negotiating commercial terms and conditions, though the timing of an agreement has not been settled yet.
Among the other Japanese efforts, trading house Sumitomo Corp is also working with Kazakhstan’s state nuclear company to produce rare earth metals including dysprosium. Japan has also started exploring ocean beds for rare earths, with Deep Ocean Resources Development Co. and Japan Oil, Gas and Metals National Corp (JOGMEC) having taken up two of 24 contracts issued by the International Seabed Authority to explore international waters for metals and minerals.
On the India-Japan front, Indian Rare Earths will produce mixed rare earth materials from uranium and thorium ores, which Toyota Tsusho will then use to produce neodymium (used for electric and hybrid cars), and lanthanum, cerium and praseodymium.
Annual production is expected to be between 2,000 and 2,300 tons, which is equal to around 15 percent of Japan’s total demand, and about 2,000 tons a year could be exported to Japan starting in early 2015.
In 2012, Indian Rare Earths Ltd. had sought mining permission for rare earths from sand in the coastal stretch in Bramhagiri in Puri in India’s eastern State of Odisha after finding huge deposits of rare earths in that part of the country.