October 28, 2010 / 9:57 AM / 9 years ago

Japan's Nidec to make motors without rare earth metals

TOKYO (Reuters) - Japan’s Nidec Corp will begin making switched reluctance motors from 2012 as it reduces its reliance on rare earth materials used in the production of precision motors.

Japanese firms, which use the metals in hi-tech products, have been in a tight spot after China, which supplies about 97 percent of the world’s demand, slashed export quotas and reduced shipments to its neighbor following a territorial dispute.

Prices of the minerals have spiked and mining firms have begun rushing to develop sources outside China amid fears that Beijing will use its leverage as a political tool, something a Chinese government spokesman denied earlier on Thursday.

Nidec will start producing the switched reluctance motors, which do not use rare earth metals such as neodymium, for heavy machinery from 2012, for tractors from 2013, and eventually for motor vehicles, company spokesman Takehiro Osaka said.

The Kyoto-based firm acquired the technology when it bought two of U.S.-based Emerson Electric’s motors businesses earlier this year.

Prices of some rare earths on world markets have increased tenfold this year, reversing a long-trend toward lower prices caused largely by greater Chinese production over the past two decades.

Shares of Nidec settled 3.8 percent higher at 7,990 yen on Thursday.

Reporting by James Topham; Editing by Lincoln Feast

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