Hitachi Metals Rare-Earth Magnet Complaint to Be Probed by U.S.

Hitachi Metals Ltd.’s (5486) complaint seeking to block U.S. imports of competitors’ rare-earth magnets used in electronics, golf ball markers and power tools will be investigated by the International Trade Commission.

The commission today said it started a probe into the case filed Aug. 17 by the Japanese maker of specialty-metal products against more than two dozen companies. Notice of the decision was posted on the agency’s website.

The dispute is over patented inventions related to the manufacture of sintered rare-earth magnets, which are light and powerful compounds used in batteries, magnets and computer hard drives. Hitachi is seeking to block products that are using rare-earth metals from China, where 95 percent of all such materials are mined and processed.

Hitachi Metals, based in Tokyo, said in the complaint it has an agreement to make the magnets with Molycorp Inc., (MCP) the owner of the only rare-earth mine in the U.S., and plans to begin production in 2013.

Companies named in the complaint objected, saying any import ban would harm public health because the magnets are used in robotic surgical systems, radiation equipment, surgical microscopes and insulin pumps.

“Hitachi Metals seeks a dramatic remedy threatening a massive upset to the national economy,” audio-equipment seller Skullcandy Inc. (SKUL) said in a filing with the agency.

Rare Earths

The complaint names Chinese companies that mine or use the metals, as well as firms that import or make products that use them. They include Skullcandy, Harman International Industries Inc. (HAR), and Bose Corp.; and athletic-gear makers Callaway Golf Co. (ELY), Taylor Made Golf Co., and Adidas AG. (ADS)

Molycorp is working to reopen a rare-earth mine in Mountain Pass, California, that closed in 2002 because Chinese exports caused global prices to plunge, according to Hitachi Metals. More recently, prices have risen and the U.S. Congress has been calling for an increase in domestic production.

Hitachi Metals said it and other suppliers would be able to make up for any loss of available products if the rare-earth magnets from China are halted at the U.S. border.

The case is In the Matter of Sintered Rare Earth Magnets, 337-855, U.S. International Trade Commission (Washington).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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