Japan, Kazakhstan to develop rare earth metals: media

TOKYO Sun Apr 29, 2012 1:32am EDT

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TOKYO (Reuters) - Japan and Kazakhstan plan to sign an agreement to jointly develop rare earth metals critical to electronics and auto makers, aiming to lower dependence on China, the Asahi Shimbun daily said on Sunday.

Japan's Trade Minister Yukio Edano will meet Kazakh government officials, including President Nursultan Nazarbayev, to sign the agreement in early May, making way for Sumitomo Corp (8053.T), Japan Oil, Gas and Metals National Corp and Kazatoprom to partner in rare earth extraction, the paper said.

Higher prices of rare earths from China are squeezing Japanese manufacturers of batteries and electronics, forcing them to cut usage and seek alternatives.

Japan and Kazakhstan will build a plant in Stepnogorsk, northern Kazakhstan and use technology developed by Shin-Etsu Chemical Co (4063.T) to isolate dysprosium, used in motors for electric and hybrid cars, from soil processed for uranium, the paper said.

The plant will go onstream as early as this summer and ship 30 tonnes of the material to Japan this year, with shipments to rise to more than 50 tonnes next year, the paper said. Japan's annual demand for the element is roughly 500 tonnes.

Japan's Trade Ministry, Sumitomo and JOGMEC officials were unavailable to comment.

The European Union, the United States and Japan have asked the World Trade Organization to settle a dispute with China over Beijing's restriction on rare earth metal exports.

(Reporting by Mayumi Negishi, Editing by Jonathan Thatcher)

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