Japan, US, EU discuss rare earth supply security

Mar 28, 2012 By ELAINE KURTENBACH , AP Business Writer

(AP) -- Officials from the United States, the European Union and Japan are pledging to work closer together on ways to ensure secure supplies of strategically vital rare earths and other critical materials.

U.S. Energy Secretary told a conference Wednesday in Tokyo that improving processing and recycling of the materials, used in many high-tech products, is vital in the medium term. He said that in the near term, they must be "used as sparingly you can."

China holds about a third of the world's rare earth reserves but supplies about 90 percent of what is consumed. In the past two years it has imposed limits on its exports, citing a need to impose order on an unruly domestic market and to reduce environmental damage.

That has raised protests from countries relying on supplies from China for many industries, including automaking and electronics.

The U.S., Japan and EU recently filed complaints with the over Chinese limits on exports of rare earths.

"It is important the consuming countries and supplying countries ... develop a so that we are not dependent on one source," said Japan's trade minister, Yukio Edano.

Looking to the long term, attention has now shifted toward supply-chain security, said Hans Dietmar Schweistgut, the EU ambassador to Japan.

The officials repeatedly stressed the need to work closely with other producing nations such as Australia and Canada.

Rare earths are used to make goods including hybrid cars, weapons, flat-screen TVs, mobile phones, mercury-vapor lights, and camera lenses.

Japan's need for such materials only increased with last year's earthquake and tsunami and resulting , which has led to the suspension of almost all atomic power production. Such materials are required for and other , Edano said.

"If we cannot access these resources, it will slow the transition to renewables. This is not acceptable," he said.

The U.S. has stepped up research on batteries, building materials and high-performance computers as part of the effort to find substitutes for some rare earths, while Japan and the EU are launching joint research this summer.

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