Depressed Rare Earth market puts Nippon's project in Jamaica on hold

Dull demand and prices in the rare earths market have led Nippon Light Metal to take the decision to stop developing its red mud beneficiation-based project in Jamaica. The Japanese company will continue refining the process while waiting for more profitable market conditions.

Japan-based Nippon Light Metal Co. and the Jamaican government have decided to stop developing a process to extract rare earths from red mud effluent left over from bauxite refinement, due to unfavourable market conditions. Nippon and the Jamaican Bauxite Institute (JBI) said the decision was taken as current low prices and higher cost of production are not supporting the project

In the meantime, Nippon and the Jamaica Bauxite Institute (JBI), continue to attempt to refine the technology, which they own 50:50 and for which they have sought patents globally.

"The highly depressed state of the REE (rare earth element) market at this time would not make it a favourable time to make significant investments which would be required," Parris Lyew-Ayee, the JBI's executive director, told Wednesday Business, in emailed responses to questions. "We need to keep monitoring the market as we proceed with our research and development work."

Precisely what commercial development of the project would cost was not disclosed, but nearly two years ago, Nippon and the Jamaicangovernment spent J$300 million on laboratories and a pilot plant for the extraction.

Jamaican officials insist that rather than being dead, the project "is on pause", and explained that geopolitical concerns, such as tensions long-standing tensions between Beijing and Tokyo would likely keep alive Japanese interest in finding alternative sources for the minerals.

In fact, other sources say, the Japanese activity in Jamaica has excited interest in the island's red mud to the point where foreigners have sought to corner supplies by seeking long-term leases over the effluent ponds.