Published: Tuesday, 23 Nov 2010 | 8:38 PM ET
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By: Reuters
Japanese trading house Sojitz said it has formed a tie-up with Australian mining company Lynas on the supply of rare earth metals, and would announce details of the agreement later on Wednesday.
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News of the deal comes one day after Australia promised to be a future long-tem supplier of rare earths to Japan, aftershipments of the minerals from China to Japan had stalled amid a spat over disputed islands in the East China Sea.
Sojitz has agreed to pay about $300 million for the right to buy about 8,500 tons of rare earth metals annually from Lynas for 10 years, Japanese public broadcaster NHK reported on its website.
That amount is equal to nearly 30 percent of annual demand in Japan, NHK said.
A Sojitz spokesman declined to confirm the NHK figures.
Lynas is planning to start output at its mines in western Australia in the second half of 2011, NHK said.
Japan's government will supply more than half of the funds required for the purchase of the rare earth minerals from Lynas through a quasi-government organization, NHK said.
China produces 97 percent of the world's rare earth metals, which are crucial for many high-tech products.
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