TOKYO, Nov. 29 (Kyodo) — Mitsubishi Corp., Daido Steel Co. and U.S. rare earth producer Molycorp Inc. willjointly build a plant in Gifu Prefecture to manufacture neodymium magnets, powerful magnets critical in the production of the electric motors of eco-friendly cars, the three companies said Tuesday.
The plant, which is planned to start operations in 2013, will employ a technique that substantially reduces use of rare earth elements, whose prices have gone up due to export controls by China, the world's largest rare earth producer.
A joint venture will be formed by the end of this year for magnet manufacturing and marketing. It will be 35.5 percent owned by Daido and 34.5 percent by Mitsubishi with the remaining 30 percent held by Molycorp, they added.
The plant will have a capacity to produce 500 tons a year.
Demand for the magnets, made of such rare earths as neodymium and dysprosium, is expected to grow due to rising sales of hybrid and other eco-friendly cars.