India Inches into the Rare Earth Market

Details: Category: Rare Earth News; Published on Wednesday, 03 September 2014 14:20

To say China is the main player in the rare earth element (REE) space is, of course, an understatement. The country lost an appeal regarding a World Trade Organization (WTO) ruling on its REE export restrictions last month, but it still controls the lion’s share of the market; that means any indication that another entity might take a share of the market, however small, is definitely worth some attention.

According to Reuters, India is commissioning a plant that will produce as much as 5,000 tonnes of REEs annually. S. Surya Kumar, head of state-owned Indian Rare Earths’ Rare Earths Division, has not given a timeline for the plant’s development, but did say that it will be located in Odisha and will produce rare earth oxides by processing monazite from beach sand.

Once the plant is up and running, India could stand to contribute approximately 5 percent of global supply.

Japan, like the rest of the world, relies heavily on China for REEs. However, the resource is even more important for the island nation as REEs are necessary for the production of the electronics and computerized systems that make up a substantial portion of Japan’s exports.

It isn’t surprising then, that a subsidiary of Japan’s Toyota Tsusho (TSE:8015) has a hand in the newly commissioned Indian plant. Indeed, it’s already entered an agreement for half of its anticipated production. The partnership between the two looks to be going well so far, as International Business Times reported that Indian Prime Minister Narendra Modi met with Japan’s Shinzo Abe this week to discuss the contract further. Japan has also committed to doubling its overall direct investment in India over the next five years.

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