Japan feeling the REE squeezeRussia Governor Says Sumitomo, Mitsui Discuss Rare Earths Amid China Curbs
By Ilya Arkhipov -Feb 11, 2011 1:20 PM CT
Mitsui & Co. and Sumitomo Corp. areinterested in Siberian rare-earth deposits that weren’t expectedto be mined until 2030 as Russia tries to fill the gap left whenChina slashed exports, Yakutia Governor Yegor Borisov said.
Tokyo-based Mitsui and Sumitomo, Japan’s second- and third-biggest trading companies, have held talks with regionalofficials about niobium and scandium resources in Yakutia, anarea of northeastern Russia the size of India, Borisov saidyesterday in an interview.
Prices for rare earths, a group of elements used inproducts ranging from electric cars and laptops to guidedmissiles and satellites, have soared since July, when China cutsecond-half export quotas by more than 70 percent. Chinaaccounted for 97 percent of rare-earth output in 2009 and morethan half of consumption, U.S. government data show.
South Korea and Japan have begun to go hungry,” Borisovsaid in the Ural Mountains city of Ufa, where he attended ameeting with President Dmitry Medvedev. “Now there’s goodreason to reconsider our position on rare-earth deposits inYakutia that were scheduled for development after 2030.”
Mitsui and Sumitomo officials in Moscow and Tokyo declinedto comment when contacted by Bloomberg. They declined to beidentified, citing company policies.
Russia has the largest reserves of rare-earth mineralsafter China, though production is minimal, according to U.S.government data. The world holds about 99 million metric tons ofcommercially viable rare earths, with China and Russiaaccounting for 36 percent and 19 percent, respectively, theInterior Department said in a report last year.
‘Strategic Deposits’
“Our counteragents are taking a broad look at this andaren’t counting on something today,” Borisov said. “They knowthat we won’t let them have direct access to strategicdeposits.’
Japan, the world’s largest consumer of rare earths, hassought alternative suppliers. Foreign Minister Seiji Maehara metwith his Russian counterpart, Sergei Lavrov, in Moscow yesterdayamid renewed tensions in a 65-year dispute over four islands offthe northern tip of Japan.
Yakutia, which has fewer than 1 million people, probablyholds “many more” rare-earth deposits than most analystsestimate, Borisov said, declining to be more specific.
Yakutia’s Tontorskoye deposit, which primarily containsniobium, is “many times bigger in volume and quality than Brazil’s famous deposits,” Borisov said.
Outstripping Demand
Brazil is home to the world’s largest deposit of themineral, used in alloys such as stainless steel for oil and gaspipelines. The Brazilian deposit has enough niobium to meetcurrent world demand for 500 years, according to the Brussels-based Tantalum-Niobium International Study Center.
Global consumption of rare earths last year was about124,000 tons, 10,000 tons less than production, a differencecovered by stockpiles, the U.S. Congressional Research Servicesaid in a Sept. 30 report. Demand will probably reach 180,000tons next year.
China’s commerce ministry said Jan. 18 that it and otheragencies were still considering the full-year export quota. Theministry set the first-half quota at 14,446 tons, a 35 percentdecline from the same period last year.
With China continuing to restrict exports, Borisov saidhe’s in talks with the Federal Subsoil Agency in Moscow aboutstarting auctions for deposits as early as 2014. The agency’spress service declined to comment.
“We’re reconsidering our position,” Borisov said. “We’retrying to determine how much we have now. We’re in the earlystages.”