November 10, 2010 / 11:14 AM / 9 years ago

INTERVIEW-UPDATE 1-Canada sees opportunity in rare earths

* Chinese approach to rare earths troubling - trade minister

* Sees Canada meeting some rare earth needs in longer term

* No tradition of helping industry with financial support

* Open to investment from China if net benefit to Canada (Adds background, details)

By Chang-Ran Kim

YOKOHAMA, Japan, Nov 10 (Reuters) - Canada’s trade minister said China’s approach to supplying rare earth minerals to the world was troubling but presented an opportunity for resource-rich Canada to step up to the plate.

“Everybody is concerned about supply of rare earths,” Peter Van Loan told Reuters on Wednesday on the sidelines of the Asia-Pacific Economic Cooperation (APEC) meeting.

“The approach of the Chinese is troubling because it is not a market approach that they’ve adopted.”

Rare earths, a group of 17 metals essential to high-technology goods from LCD televisions to hybrid cars, are difficult to source outside of China, which produces more than 97 percent of the global supply.

Van Loan played down the likelihood of special financial support from the government for developing Canada’s rare earth sector, although he acknowledged it was unique and warranted discussion with trade partners on ensuring adequate supply.

“For a country like Canada, we do think this represents a long-term opportunity. We’re a country rich in resources including rare earths, and I expect and hope that we’ll be able to take some steps in the long term and medium term to meet some of those market needs,” he said in an interview.

There are at least 26 publicly traded companies in Canada, including Great Western Minerals Group and Rare Element Resources, that have rare earth projects in some stage of exploration. But good quality, economically feasible deposits are scarce.

While mining costs are an issue, Van Loan said it would be up to the private sector to figure out how to make use of what he said was a business-friendly environment already in place in Canada.

Asked about financial support to miners, he said: “Traditionally we’ve not done a great deal of that. We like to have the market operate and do that properly.”

He said Natural Resources Canada, a government entity, provided a great deal of expertise and support, while Canada had an abundance of skilled workers in the mining field and the lowest taxes of any major developed economy on new businesses.

He also said Canada was open to investments in rare earth mining from companies from any country, including China, as long as they passed the review process and the “net benefit to Canada” test which was used to block BHP Billiton’s bid for Potash Corp this month. (Editing by Edmund Klamann)

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