"We have to diversify the sources of rare earth minerals," Maehara said in a press conference with US Secretary of State Hillary Clinton after they met in Hawaii.

"And here again Japan and the United States will closely cooperate with each other in order to engage in more diversified rare earth minerals diplomacy," he said.

Clinton meanwhile welcomed remarks from officials in Beijing that China will not use its near-global monopoly on the rare earths trade as a "bargaining tool," but she said it is important to diversify sources.

Clinton, reacting to the remarks as described to her by a journalist, quipped that it will make her conversation shorter with Chinese state councilor Dai Bingguo when she meets him on China's Hainan island on Saturday.

Still, "I would welcome any clarification of their policy and hope that it means trade and commerce around these important materials will continue unabated and without any interference," Clinton said.

"At the same time because of the importance of these rare earth minerals, both the minister and I are aware that our countries and others will have to look for additional sources of supply," she said.

"That is in our interests commercially and strategically," she said.

Rare earths -- a group of 17 elements -- are used in high-tech products ranging from flat-screen televisions to lasers to hybrid cars, and China controls more than 95 percent of the global market.

earlier related report
China says rare earths not a 'bargaining tool'
Beijing (AFP) Oct 28, 2010 - China will not use its near-global monopoly on the rare earths trade as a "bargaining tool", an industry ministry spokesman said Thursday, amid a row with Japan over the vital minerals.

The comments came as Japanese media reported that China had cancelled a meeting of the economic ministers of Japan, China and South Korea due to a spat over its export restrictions on rare earths, which are used in high-tech goods.

"China will not use rare earths as a bargaining tool," Zhu Hongren, the spokesman for the country's ministry of industry and information technology, told a press conference, according to an official transcript.

"China hopes to have mutually beneficial cooperation with other countries on the use of rare earths... and at the same time protect the unrenewable resource."

China last year produced 97 percent of the global supply of rare earths -- a group of 17 elements used in high-tech products ranging from flat-screen televisions to iPods to hybrid cars.

The world's top consumers of rare earths, especially Asian neighbour Japan, have rung the alarm bell in recent weeks, accusing China of disrupting exports of the vital minerals -- a charge Beijing has repeatedly denied.

Shipments have nevertheless been disrupted, and a top official in Tokyo has warned that Japan's stockpile could run out by March. Japan and Vietnam are now set to sign a deal on joint development of rare earths reserves.

Zhu said China had the right to impose restrictions on the mining, production and trade in the minerals, as a means to tackle pollution in what is a notoriously environmentally unfriendly industry.

"China's rare earth production and exports should take into account not only economic development, but also a number of factors including protecting the environment and resources," he said.

The spokesman also reiterated that China's moves in this regard were "in line with World Trade Organisation rules".

Earlier this week, Japanese Trade Minister Akihiro Ohata urged Beijing to normalise rare earths exports, in a meeting in Tokyo with Chinese Vice Commerce Minister Jiang Yaoping.

Jiang told Ohata that China has strengthened shipping inspections to "counter smuggling" and reiterated China's claim that it has not imposed any ban on trade with Japan, the minister said.

Japanese firms first reported disruptions to shipments last month, in the heat of a diplomatic row between Beijing and Tokyo sparked by a territorial claim in the East China Sea.

Japanese Prime Minister Naoto Kan is expected to raise the issue if he meets Chinese Prime Minister Wen Jiabao on the sidelines of 16-nation Asian summit in Vietnam this week, media reports have said.

But so far, no meeting has been set, and the cancellation of the three-way gathering of economic ministers in Hanoi could cloud prospects for any talks between the premiers.

On Tuesday, Chinese foreign ministry spokesman Ma Zhaoxu said: "We hope the Japanese side will take concrete actions to create the necessary conditions and atmosphere for meetings between the two sides."

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