A TERRITORY mining company reiterated yesterday it would be ready to begin sales of rare earths by 2013 - as a potential world shortage looms.

China, which has about 30 per cent of the world's known reserves, has said it will raise tariffs on some rare earths exports.

Arafura Resources said it would press ahead developing Nolans Bore, 135km north of Alice Springs.

Production should begin within three years.

Managing director Steve Ward said: "We've looked at every way possible to come into production earlier, but as far as we can see at this stage, 2013 will be our first production.

"That means we will be one of the few new sources in the world coming into production in that sort of time frame.

 

"We are receiving a lot of interest in our project, especially from potential customers."

The Perth-based company believes it has key rare earth elements - those most in demand for magnets.

China meets about 97 per cent of the world's needs.

Rare earths are widely used in making high-tech products such as flat-screen monitors, electric car batteries, wind turbines, missiles and aerospace alloys.

The Chinese export quota for this year was 30,000 tonnes. That was cut by 70 per cent in the second half of this year even though the annual quota was a reduction of about 40 per cent from 2009.

The US Department of Energy said there was a risk of disruption to supply over the next five years.

Senior vice-minister for the Japanese Ministry of Energy, Trade and Industry, Todahiro Matsushita, said in Darwin Japanese companies were looking to invest in rare earths mining in the Territory.

China cut all exports to Japan a month ago.

Arafura Resources has raised a further $90 million and now has $100 million "in the bank" to fast track Nolans Bore. The company plans to mine ore and treat it into a mineral concentrate at Nolans before freighting it by rail to a new complex at Whyalla in South Australia.

sThe Territory Government lobbied for the processing plant to be built in the Territory. Arafura said there were no suitable sites.