Showa Denko to Launch Vietnam Rare Earth Recycling Plant

Showa Denko will start the operation of Vietnamese rare earth alloy recycling plant in May. The plant makes annual 800 tonnes of didymium, which is main magnet material with neodymium and praseodymium, and dysprosium, which is additives for magnet, from rare earth containing scrap. The firm tries to secure the raw materials stably by utilizing the recycling materials to meet growing demand for hybrid and electric vehicle, eco friendly appliances and industrial machinery.

The new plant is preparing for the operation start. Japanese export of non-category rare earth increases for Vietnam recently, according to Ministry of Finance. The non-category apparently includes scrap from plant to make neodymium-iron-boron magnet. The export to Vietnam reached 583 tonnes in 2009 when Showa Denko started the plant construction while the export was only 60 tonnes in 2008. The export was 74 tonnes in January and 41 tonnes in February. The higher export was due to inventory building by Showa Denko, according to industry sources.

Showa Denko established Showa Denko Rare Earth Vietnam near Hanoi in Ha Nam province in October 2008. Showa Denko controls 90% of the subsidiary. The firm uses the rare earth metal from Vietnam as materials to make alloy for magnet in Japan and China. The firm has Chichibu plant with annual 5,000 tonnes of output capacity, Baotou Showa Rare Earth Hi-teck New Material 1,000 tonnes of capacity and Ganzhou Zhaori Rare Earth New Materials with 2,000 tonnes of capacity.

China represents more than 90% of world rare earth material production. Especially dysprosium production is limited in south China. The limited supply and unstable supply cause speculative purchase and volatile market. The metallic dysprosium price is more than double from the price at end of 2009.

Chinese government reduces the export of rare earth including neodymium gradually. The lower supply lifts the price in the international market. Showa Denko tries to improve the procurement stability through the recycling plant in Vietnam.