Toyota Forms Task Force on Rare Earth Metals Amid China Export Ban Reports
Toyota Motor Corp. has set up a task force on rare earth minerals used in hybrid cars amid reports of China’s ban on exports of the materials to Japan.
The carmaker, the world’s largest producer of gasoline- electric vehicles, said it formed the committee, confirming a report in the Nikkan Kogyo newspaper today. Japanese companies are looking to diversify supply with Lynas Corp., a Sydney-based miner of rare earth metals, saying it had signed a contract with an unnamed Japanese customer.
Rare earth minerals such as neodymium and dysprosium are used in electric-motor magnets in hybrid cars, including Toyota’s Prius and Honda Motor Co.’s Insight, and in mobile phones and rechargeable batteries. China, which controls more than 90 percent of the global market for the metals, imposed a “de facto” ban last week on exports to Japan of the materials, a group of 17 metals used in weapons, hybrid vehicles and laptop computers, Japanese Economy Minister Banri Kaieda said yesterday.
“The Chinese won’t hesitate to change the rules to improve their situation,” Peter Strachan, a Perth-based analyst for independent advisory firm StockAnalysis, said in a phone interview today. “China has restricted rare earths sales to everyone, not just Japan.”
Chen Rongkai, a spokesman for China’s Ministry of Commerce, reiterated yesterday that the nation hasn’t imposed an export ban.
Toyota rose 0.5 percent in Tokyo to 3,090 yen as of the 11 a.m. trading break, while the benchmark Nikkei 225 Stock Average gained 0.6 percent.
Japan’s Ministry of Economy, Trade and Industry said it will investigate China’s export policy on rare earth metals. The government will check with about 30 domestic companies including manufacturers and trading houses to confirm whether China has banned the shipments, Tsutomu Murasaki, director of the ministry’s non-ferrous metals division, told reporters at a briefing in Tokyo on Sept. 28.
Restrictions disproportionately affect Japan because it accounts for 65 percent of Chinese rare earth metal exports, according to a Sept. 24 report by Macquarie Group Ltd.
Prices for rare earth metals have risen this year with surging demand and cuts to China’s export quotas, affecting automakers such as Toyota, Honda and Nissan Motor Co., which require the elements for vehicle development, Macquarie said.
Toyota spokesman Paul Nolasco confirmed the company has set up such a task force. 31
The automaker began exploring alternative sources before the recent reports on export restrictions, Nolasco said.
Toyota Tsusho Corp., a trading company affiliated with the carmaker, has formed a joint venture with Sojitz Corp. and a Vietnamese state-run mining company to export rare earth metals to Japan from 2012, spokesman Katsutoshi Yokoi said. The company acquired Tokyo-based rare earth metal importer Wako Bussan Co. in December 2008, which will import materials from India from next year, Yokoi said.
Lynas., building a A$550 million ($532 million) rare earth minerals project in Australia, said today it had agreed to supply a Japanese customer and that it is also in talks with potential customers in Europe, Japan and the U.S.
“Lynas is extremely pleased to sign this contract with one of the leading companies in their specific market,” Executive Chairman Nicholas Curtis said, without naming the buyer. The rare earth materials will be supplied from the company’s Mt. Weld project and produced at its plant in Kuantan, Malaysia, when it starts up next year.
Shiori Hashimoto, a Tokyo-based spokeswoman for Toyota, declined to say whether Toyota is the customer, adding that the carmaker indirectly procures rare metals through parts suppliers.
The automaker has said it plans to sell 1 million hybrid cars a year during the early part of this decade and offer hybrid versions of all of its models by 2020.
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