In early January, China announced that it would slash its rare earth export quotas by 11 percent in 2011. The move caused prices to soar and has led Japanese officials to try and find ways to make this not matter very much.
Effective immediately, Japan's Ministry of Economy, Trade and Industry will dish out 33.1 billion yen ($404 million U.S. at the current exchange rate) to 110 companies in an effort to slash the nation's dependence on rare earth metal imports from China by one third. Then, the ministry is expected to fork over an additional 9 billion yen ($110 million) to find more companies willing to partake in projects that reduce Japan's rare earth dependency.
The Nikkei, a Japanese news outlet, claims that the nation's spending will fund:
Projects encompassing several categories, such as cutting use of rare-earth metals, boosting recycling, diversifying procurement sources and testing parts made using non-Chinese rare earths. If rare-earth content is reduced or procured from new sources, it may alter the performance of such parts as motors and catalyzers.