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India to resume rare earth exports after seven years

Sandeep Dikshit
The Hindu
NEW DELHI, February 18, 2011

It is set to export 6,000 tonnes of rare earth chloride to a Japanese company.

For the first time in seven years, India will begin the export of rare earth minerals, said government sources here on Thursday.

India is set to export about 6,000 tonnes of rare earth chloride to a Japanese company, marking its first entry into the rare earth exporters club, which is now totally dominated by China.

The decision to enter into such a partnership was taken during a summit meeting between Prime Minister Manmohan Singh and his Japanese counterpart, Naoto Kan, in Tokyo last year. Indian Rare Earths Limited, a public sector undertaking under the Nuclear Power Corporation of India Limited (NPCIL), will make the supplies of rare earth chloride to Toyota Tsusho.

The sources wanted the development to be seen in conjunction with the Indo-Japan Comprehensive Economic Cooperation Agreement (CEPA) signed on Wednesday and the decision to include Japanese Maritime Self Defence forces in the joint India-United States exercises for the second successive year.

The Indian move to enter the rare earth exports market comes at a time when China is cutting down export quotas to ensure that its industry moves up the value chain instead of simply selling raw material for value addition by other companies and countries. India had stopped producing rare earths for exports in 2004 but is now confident of exporting it at good prices due to firming up of prices in the international market.

India and Japan are now looking at the possibility of a joint venture between IREL and Toyota Tsusho though the issue of environmental clearances for the proposed plant in Orissa could be a major issue to be sorted out.

Information about the Indian decision came a day after Japan expressed interest in rare earth tie-ups with India on the occasion of signing of the CEPA in Tokyo. Sources said the IREL and the Toyota subsidiary were currently discussing the ration of stakes that both sides would hold in the joint venture. “This will take India-Japan ties to the truly strategic level,” said diplomatic sources.

Source: http://www.thehindu.com/news/national/article1466014.ece