Institute of Rare Earths and Metals, 08.05.2013. Japanese electronics giant TDK Corporation announced that it is joining forces with two other companies to launch a joint venture for the production of rare earth magnets. It seems as if the previous reluctance on the part of the Japanese government to overcome such a step has been overcome.
Guangdong Rising Nonferrous Metals Group Co. announced that they will establish a NdFeB magnet company together with the Japanese TDK Corporation and Japan Tokai Trade Corporation: the Guangdong Rising TDK Rare Earth Advanced Material Co.
Guangdong Rising Nonferrous will invest 12,21 million USD, which represents 37% of the registered capital of the new company. TDK is investing 33 million USD, which represents 59%, and the remaining 4% or 1,32 million USD will be invested by Tokai Trade.
The new company will achieve a production capacity of 1.500 tons per year for NdFeB high performance magnets.
Demand for NdFeB high performance magnets in the hybrid vehicle industry and several other industries is expected to increase. TDK wants to set up a company in China to ensure raw material supply and NdFeB production, as well as a stable supply. Neodymium, samarium and dysprosium are important rare earth elements for NdFeB and SmCo high performance magnets, which are critical for a range of applications in hybrid vehicles and green technologies.
Australia's Lynas Corp. and the US-based Molycorp produce neodymium. However, outside China, the production of dysprosium and samarium is low. Some industry sources expect no significant increase in production until at least 2015-16. In July last year, the Japanese government prevented TDK and Hitachi Metal from setting up joint ventures in China to build high-performance magnets. This was justified by the fact that they have a civil, but also a military benefit.
Many industry sources speculated that the Japanese government wanted to prevent intellectual property from being ceded to manufacturing these magnets. Hitachi Metal holds a record number of patents on these products.
Conquering the supply chain
Japan recognizes that China's goal is to capture an ever-increasing share of the supply chain, from basic materials to the finished product, and thus compete with Japanese companies. According to industry circles, China needs companies that share their expertise in magnet production, although it is unclear whether this applies to this announcement.
TDK said it will become magnets, IT equipment and various electronic devices for vehicles, in cooperation with Chinese partners Rising Nonferrous Metals Co and Guangdong-based resource development company Tokai Trade Co, a subsidiary of a Japanese business group of the same name, produce.
TDK had originally planned for 2014, together with the Japanese conglomerate Showa Denko and Hitachi Metal, to produce high-performance magnets in China until they were hindered by the Japanese government. It is possible that further cooperation in the production of magnets will follow between Japanese and Chinese companies.
