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Japanese explorers discover rare earth materials in Pacific ocean mud

The price of rare earth materials used in electronics for various products including automobiles got some relief from the Chinese attempt to corner and control the rare earth market, as Japanese explorers found large deposits of the minerals on the floor of the Pacific Ocean.

Even mild hybrids like Buick's eAssist technology use lithium, a rare earth material. So this news is welcomed by all automotive manufacturers.

First revealed in a British Journal, Nature Geoscience, the article stated that high concentrations of yttrium were found in deep-sea mud throughout the southeastern and north-central parts of the Pacific.

While some believe the complexity to remove the deposits means that commercialization could take up to 20 years or more; others say that rare-earth elements and yttrium are readily recovered from the mud by simple acid leaching.

In the past, researchers did not regard seafloor sediments as a rare-earth element and yttrium resource, because data on the spatial distribution of these deposits were considered insufficient.

Data now shows that deep-sea mud contains high concentrations of rare-earth elements and yttrium at numerous sites throughout the eastern South and central North Pacific.

According to the same British Journal article, it is estimated that an area of just one square kilometer, surrounding one of the sampling sites, could provide one-fifth of the current annual world consumption of these elements.

That was enough to raise the stock prices of Molycorp (NYSE: MCP), Rare Element Resources Ltd. (NYSE: REE), Avalon Rare Metals Inc. (NYSE: AVL), and China Shen Zhou Mining & Resources, Inc. (NYSE: SHZ). However, news like that is often short lived.

For the record, Torque News has reported on rare earth materials before. Last December, China was cutting exports for 2011 by another 11% after a 40% cut in 2010. Question was at the time, would it drastically affect electronic manufacturers and electric vehicle battery suppliers who depend on lithium?

Then the following month, Tesla (Nasdaq: TSLA) and Toyota Motor (ADR: TM) In a preemptive move announced they were innovating their way around future rare-earth material shortages induced by threats of production cutbacks in China. In fact, Toyota reported it was already in the advanced stages of using an induction motor designed by Tesla that does not require rare earth materials for its new hybrid cars.

So, there, China! Nice try.

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About the Reporter: After 39 years in the auto industry as a design engineer, Frank Sherosky now trades stocks, futures and writes articles, books and ebooks like, "Perfecting Corporate Character," "Awaken Your Speculator Mind", and "Millennial World Order" via authorfrank.com. He may be contacted here by email: [email protected]

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