Japan and Jamaica on Monday have formally launched a pilot project to test the commercial viability of the island's bauxite waste, more known as red mud, for possible rare earth elements.

If the project confirms what Japanese researchers announced on January that there are high concentrations of rare earth elements in the red mud of Jamaica, it could be among the most "significant projects ever undertaken in Jamaica," Portia Simpson Miller, prime minister of Jamaica, said.

"This project represents the kind of industrial diversification that this country needs it if is to realize its economic potential and improve living standards for our people," Ms Simpson Miller told Japanese dignitaries and Jamaican officials, scientists and businessmen.

Researchers from the two countries will treat some 30 tonnes of dry red mud, a byproduct of the process of refining bauxite, with acid during the pilot project at the plant located at the Jamaica Bauxite Institute. Both hoped they would be able to potentially extract some of the 17 rare earths elements that are highly essential to manufacture a number of today's present technologies and gadgets such as smartphones, plasma screens, wind turbines and satellites, among other others.

Nippon Light Metal, which committed to invest $3 million in equipment and buildings as well as the one to spearhead the extraction, believed the concentration of rare earths elements in Jamaica's red mud is "significantly greater" than other international red mud sites, Phillip Paulwell, Jamaican energy minister, said.

Once found commercially viable, the project could potentially earn Jamaica billions in foreign exchange.

"We are at the starting line of an opportunity that has the potential to redefine Jamaica's economic prospects in a positive way," Mr Paulwell had earlier said. "The government of Jamaica perceives the extraction of the rare-earth elements that are present in Jamaica to be an exciting new opportunity to earn much needed foreign exchange and create jobs."