To Develop Rare Earths, US, Australia Will Partner with Japan

To invest in smelting plants for rare earths, the Japan Oil, Gas and Metals National Corporation (JOGMEC) will revise the "Independent Administrative Corporation's Petroleum, Natural Gas, Metal Mineral Resources Agency Act", and develop the plants in the US and Australia and other countries, according to "Nihon Keizai Shimbun" reported on February 19.

JOGMEC will find investment targets for smelting plants in the United States and Australia. Japan's Ministry of Economy, Trade and Industry is negotiating cooperation with the US and Australian governments.

The United States, Australia, and Japan are strengthening cooperation in the field of rare earths, trying to get rid of dependence on China's rare earth resources. So far, MP Materials is the only rare earth producer in the United States.

As a powerful support target, large-scale rare earth company Lynas will start its production in the mid-2020s at the Texas plant. Presently, 58% of Japan's rare earth imports are from China, and the country plans to reduce the ratio to less than 50% by 2025.

It is reported that 80% of the rare earths used in the United States come from China. Rare earth is indispensable for the US military's missile and other weapons manufacturing. The Donald Trump administration sees rare earth dependence on China as an issue and is discussing subsidies for rare earth mines and smelters in the country.

The US government announced in November 2019 that it would cooperate with the Australian government in ensuring a stable supply of rare earths. The Australian government plans to support its mining and smelting businesses through export finance.

Amid the most intense trade friction between China and the US, Chinese President inspected China's rare earth plants. The United States thought that China may use rare earth elements as a card for trade negotiations.

The report also pointed out that if affected by the novel coronavirus pneumonia epidemic, the production of smelting plants for rare earths will stagnate, which will affect Japan, the US, and Australia, as well as other countries’ supply network of pure electric vehicles and smartphones. The risk of rare earth concentration in China probably will emerge once again.

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