Sojitz and Lynas Enter Rare Earth Strategic Alliance Agreement

Sojitz Corporation, Japanese major general trader, announced on Wednesday the firm and Lynas Corporation, Australian rare earth producer, reached a strategic alliance agreement, along which Lynas will supply rare earths to Sojitz as a distribution company in Japan and realize stable rare earth sales in Japanese market. Lynas schedules to start rare earth production in July-September 2011. Sojitz will purchase rare earths from Lynas at more than 9,000 tonnes per year for 10 years after the production starts. Sojitz also plans to request financial support for rare earth developing project, cooperatively carried by Sojitz and Lynas, against JOGMEC (Japan Oil, Gas & Metals National Corporation).

Lynas holds one of the world largest rare earth mines, Mount Weld in Western Australia. Lynas has developed the mine while advanced construction of a separating and refining plant in Malaysia. The first-phase operation is scheduled to start in July-September 2011 at 11,000 tonnes per year. The second phase will start in October-December 2012 at 11,000 tonnes per year. Lynas decided to accelerate the expansion project with total investment of US$ 250 million in order to follow strong global demand growth for rare earths.

Sojitz and Lynas have discussed on rare earth sales to Japanese consumers. The two companies also consider cooperative marketing to cultivate final consumers in Japan, or seeking finances for the project’s expansion.