The Ministry of Economy, Trade and Industry (METI) of Japan on Wednesday announced it has earmarked some $65 million in subsidies in a bid to encourage Japanese manufacturers to reduce their reliance and consumption of precious rare earth metals and minerals, as well as spur the development of new technologies, to aid in their various products and services.

Japan wants its companies to reduce their dependence on rare earths, particularly dysprosium, used for motors in hybrid vehicles and other products, through recycling innovations as well as inventing dysprosium-free products, Reuters reported. Japan aims to cut its domestic use of the precious metal by 200 tonnes to 400 tonnes a year, or by 30 per cent in two years.

Incidentally, Mitsubishi Electric Corp. on Wednesday announced it is working on a project that allows the extraction of rare earth elements from used household air conditioners.

Japan's decision to alter the components of its technological products comes after China continues to control the exports of the precious rare earths, particularly dysprosium.

METI, which started publicly soliciting projects in late 2011, said it had selected 49 projects at companies, universities and other institutions as eligible to receive the subsidies in the next two years. The subsidies have been reserved in the country's third supplementary budget for fiscal 2011.

"All domestic makers of high-power magnets that use dysprosium have applied for the scheme," a Ministry of Economy, Trade and Industry official said in Reuters News.

Among those included to receive the subsidy was a method to recycle dysprosium from discarded refrigerators and air conditioners, aimed at recycling 13 tonnes of the rare element in fiscal 2015, Japan's Kyodo News reported. Projects to develop technologies for creating products with a reduced amount of dysprosium were also chosen for the subsidies.

Rare earths, a group of 17 elements, are metals widely used in high-tech products ranging from flat-screen televisions to lasers and hybrid cars. Of these, Japan's high-powered magnet makers are most specially particular with dysprosium. With China's export quotas, Japanese makers TDK Corp, Mitsubishi Materials Corp, Panasonic Corp and even Toyota were forced to research and come up with products that are less dependent on dysprosium.

Moreover, dysprosium, along with terbium, europium, neodymium and yttrium, have been reported as already reaching "critical" levels of short-term supply, according to the '2011 Critical Materials Strategy' report released by the U.S. Department of Energy in December 2011. These critical levels meant supply issues could occur from now through 2015.

Apart from Japan, large manufacturing companies in Europe, and the United States involved in the automobile industry and wind turbine manufacturing, among others, have also been devoting time for research and development to come out with an alternative, and possibly low-cost, to the rare earths they require for their products, which is neodymium. Neodymium is commonly used to manufacture magnets.

German parts supplier Continental AG announced the invention of an electric motor operating without permanent magnets. Auto company Renault has reportedly started adopting in two of its electric vehicles the new motor invention.

German wind turbine manufacturer Enercon has also begun utilising an electrical system to generate the necessary magnetic field required by its generators.

U.S. rare earths supplier Molycorp Corp. said it has also started using permanent magnets that do not require dysprosium. Ames Laboratory has also started to experiment substituting rare earths in magnets with electrolytic manganese.

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