An official with the Japan Agency for Marine-Earth Science and Technology has said that researchers are preparing to start a new survey for valuable deposits of rare earth minerals in the country’s Pacific seabed. The search is scheduled to begin on January 21st, and will see them probing roughly 2,000 kilometers (1,250 miles) southeast of Tokyo, near the small island of Minamitorishima. A successful find of minerals will help Japan to reduce its reliance on China within the high-tech manufacturing industries.

This will actually be the second survey of the area, following last summer’s findings of a 6.8 million ton deposit of rare earths by University of Tokyo professor Yasuhiro Kato. Should that turn out to be accurate, it would be enough minerals to supply Japan’s consumer electronics and hybrid car engine needs for more than 220 years. This deposit is the first to be found within Japan’s exclusive economic zone, a huge benefit for the island nation that currently can only rely in imports.

As over 90% of the world’s supply of rare earths comes from China, the push for Japan to reduce its reliance stems greatly from the ongoing diplomatic tensions over a group of disputed islands. Politics have often gotten in the way of Japan’s supply from China, most notably in 2010 when the Beijing government briefly suspended all shipments. Similar action was threatened again shortly after the eruption of anti-Japanese protests in China in mid-September.

While China claims it has increased its restrictions on rare earth exports, not just to Japan, but to the international community as well, because of environmental concerns. Tired of the tight squeeze, Japan has been joined by the U.S. and European Union in filing a complaint over unfair practices with the World Trade Organization (WTO). Several other countries which are believed to have their own mineral deposits, including Vietnam, are eager to cooperate with Japan, which supplies the financing and processing technology, so both can benefit without having to deal with China.

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Last July, the WTO opened an investigation into whether China is unfairly restricting the export of rare earth metals - the substances vital not only to your iPod and smartphone, but also to so many other important things, from missiles to cars to wind turbines to light bulbs.

So how has China responded?

In the quiet of the Western world’s Christmas holiday, it blew a raspberry, tightening export restrictions once again.

“China, the world’s biggest rare earths supplier, cut the first-batch export quota for next year by 27 percent as overseas demand for the elements waned,” Bloomberg News reported in the Taipei Times on Dec. 29.

China’s Ministry of Commerce sets rare earth export limits twice a year. It pegged the first allotment for 2013 at 15,501 tonnes, down from 21,226 tonnes for 2012’s first setting.

To be fair, China had loosened restrictions last August, soon after the WTO began its investigation after the U.S., European Union and Japan complained about Chinese limits and tariffs on the metals. The 9,700 tonnes that China allowed in 2012’s second half brought the full-year limit to a three-year high of 30,996 tonnes, Bloomberg noted.

RARE DOMINANCE

For historical reasons including a disregard for environmental concerns in toxic rare earth mining and processing procedures, China controls about 95 percent of the world’s rare earth market.

Change is afoot in the industry. As Bloomberg noted, one of the reasons China curtailed exports is that worldwide demand has dropped off. You can probably attribute that to the sluggish global economy. Also, companies in Japan and elsewhere are finding ways to reduce their reliance on rare earths. And Western companies like Molycorp in the U.S. have started up rare earth operations, although Molycorp has faced criticism for selling to China rather than to the U.S.

With demand down, prices have fallen. China is not only limiting exports, but it has also limited production - all of which should choke supply and in the rules of supply and demand, help lift prices.

China has also started a massive consolidation of its rare earth industry, led by Baotou Steel Rare-Earth. It says it is doing this for among other reasons, to assert more control over cleaner industrial practices. With China’s central planning prowess, it should also give it greater ability to control the global market that it already dominates.

This year will be a busy one for rare earth developments in China and internationally. Rare earths are of double importance to the economy, not only for their direct use in products, but also because they occur in minerals that  contain thorium and uranium, two nuclear fuels that could help move the world off of CO2- emitting hydrocarbons.

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The US Department of Energy has funded a $120m research center to address shortages in rare earth metals and other materials critical for US energy security.

Ames Laboratory in Iowa will lead a team of researchers at the new Critical Materials Institute (CMI).

“Rare earth metals and other critical materials are essential to manufacturing wind turbines, electric vehicles, advanced batteries and a host of other products that are essential to America’s energy and national security,” said assistant secretary for energy efficiency and renewable energy David Danielson.

“The Critical Materials Institute will bring together the best and brightest research minds from universities, national laboratories and the private sector to find innovative technology solutions that will help us avoid a supply shortage that would threaten our clean energy industry as well as our security interests.

The department’s 2011 Critical Materials Strategy reported that supply challenges for five rare earth metals (dysprosium, terbium, europium, neodymium, and yttrium) may affect clean energy technology deployment in the coming years.

In recent years, DOE and others have scaled up work to address these challenges. Among the recent investments, DOE’s Advanced Research Projects Agency–Energy and Office of Energy Efficiency and Renewable Energy have supported more than $40m in magnet, motor and generator research.

Other national labs partnering with Ames include Idaho National Laboratory, Lawrence Livermore National Laborator, and Oak Ridge National Laboratory. University and research partners include Brown University, the Colorado School of Mines, Purdue University, Rutgers University, University of California-Davis, Iowa State University and Florida Industrial and Phosphate Research Institute.

Industry partners that have joined to help advance CMI developed technologies include General Electric, OLI Systems, SpinTek Filtration, Advanced Recovery, Cytec, Molycorp and Simbol Materials.

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Its reported that Lynas expects to return to  commercial rare earth product production within a few weeks at its Malaysian plant, which has been emeshed in ongoing environmental and safety disputes with area residents.

The process has achieved recovery rates of more than 90 percent of contained rare earth oxides through the cracking units, which are now ready for production of individual rare earth products, the company said.

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