Japan’s Sony Corp said that China’s move to reduce export quotas for rare earths was a barrier to free trade and that it would work to reduce its confidence on the minerals critical to producing high-tech goods.
Sony’s comments is after China’s announcement that it will efficiently lower its export quotas for rare earth minerals by 35 percent in the first half of 2011, increasing concerns of a supply scarcity and superior prices.
Company spokeswoman Mr. Ayano Iguchi said that although Sony does not bring in or buy rare earths directly, the minerals are vital for the production of components used in its finished products. These contain magnets, condensers, and abrasives for polishing LCD glass.
China accounts for 97 percent of the planet’s production of rare earths and Japan which is home to many of the biggest auto and high-tech producers, counts on China for the bulk of its supplies.
Japanese firms have been scrambling to expand alternative technologies and secure new sources of rare earths after China cut quotas this year and shipments momentarily.
Among some of the current deals, Sumitomo Corp said it would put in $130 million in Molycorp Inc, which owns a rare earth mine in California, and another trading house, Sojitz Corp, signed a procurement contract with Australia’s Lynas Corp.
Japan’s trade minister, Mr. Akihiro Ohata, told reporters on Tuesday that he believed Japan would still be able to secure sufficient rare earth supplies in 2011 even after China’s quota cuts, but also said that the situation would need additional study. A spokeswoman for the ministry said that Ohata’s comment was based on the hypothesis that the estimated amount of imports in the first half of 2011 would be approximately equal to the average of imports for the first and second halves of 2010,.
But Sojitz, in accordance with the Nikkei newspaper, has expected that if China were to hold quotas to 30,000 tonnes for all of 2011, around double the projected amount for the first half supplies to Japan would fall short of its yearly needs by about 11,000 tones.