Showa Denko (SDK) says it has started construction of a facility to produce 2,000 tons/year of neodymium (Nd)-based alloys at Ganzhou, China, expected to start-up in the second half of 2007.

The new facility will be operated by Ganzhou Zhaori Rare Earth New Materials (Ganzhou), a J/V between SDK, Tokai Trade (Ganzhou), and two Chinese rare-earth mineral producers, Ganzhou Qiandong Industrial (Ganzhou), and Ganxian Hong Jin Rare Earths (Ganzhou).

The new plant together with SDK's existing facility at Baotou, Inner Mongolia will bring SDK's Nd-based magnetic alloys capacity in China to 3,000 tons/year.

SDK says it is increasing its production capacities in China, "to ensure stable supply of high-performance Nd-based magnetic alloys." The company says it fears that increasing demand combined with a decline in exports from China due to China's restriction on production, suspension of the refund of value-added tax, and cut in export licenses, could escalate rare earths prices. Nd-based alloys are used in voice coil motors of hard disk drives, magnetic circuits of medical-use magnetic resonance imagers (MRIs), and in cellular phones."

"Demand for Nd-based magnets is expected to grow at an annual rate of 15% or more in coming years," SDK says.