The global rare earths sector has a new player.

On Wednesday, Deutsche Rohstoff AG, a German mining and commodity group, announced it will expand existing mining operations in the Delitzsch region of east Germany to develop an estimated rare earths deposit of 38,000 tonnes.

It was not clear if Deutsche Rohstoff AG will mine the rare earths exclusively for domestic use or will export the precious metals in the future.

The rare earth deposits, which include cerium, lanthanum, praseodymium, neodymium, europium and yttrium, were discovered during the period of the communist German Democratic Republic, Reuters reported.

The German government launched earlier a strategy to build new stockpiles that will help its commodities industry secure supplies of raw materials including rare earths following curbing control and regulation from China and intense competition from the US and Australia.

Deutsche Rohstoff AG said it has formed a new company, Seltenerden Storkwitz AG, to work on developing the deposits. It has received 2.2 million euros from various German investors to help finance the project.

Deutsche Rohstoff AG also said an initial public offering is being planned in 2012 in Seltenerden Storkwitz, possibly to provide further financial support for the rare earths project.

Deutsche Rohstoff AG said Seltenerden Storkwitz AG will start its drilling programme in the spring of 2012 to convert the deposit into an internationally accepted resource based on Australian JORC standards.

Rare earths are 17 precious elements used to support the invention and manufacture of a number of high tech and environmental protection industries.

In a related development, Canadian Great Western Minerals Group Ltd. has signed with China's Ganzhou Qiandong Rare Earth Group Ltd. (GQD) to set-up a rare earth separation plant in South Africa.

Great Western and Ganzhou have formed a joint venture company, the Great Western GQD Rare Earth Materials Proprietary Ltd (GWGQD).

Based on initial plans, Great Western will restart a previously operating mine at Steenkamskraal. A wholly owned subsidiary of Great Western will own mixed rare earth chlorides, which GWGQD will process under a tolling agreement. GWGQD will separate the mixed rare earths into products usable by Less Common Metals, Great Western's rare earths alloy processing subsidiary, as well as third party customers. China's GQD will own 25 per cent of the shares of GWGQD and $7.5 million of Great Western shares during three years.

Meanwhile, Japan's Nidec Corp. on Tuesday announced it will start producing motors that do not require the application of expensive rare earths in a bid to cut production costs. It said it expects to start supplying the next-generation SR motors to automakers by early 2013.

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