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South Korean automaker Hyundai Motors is seeking to secure rare earth mineral supply, as the industry faces a possible shortage of minerals.
Rare earth metals have a wide variety of applications. They are used in hybrid car motors, computer hard drives, cell phones, and wind turbines. They are also essential for military equipment.
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Jet engines, smart bombs and guided missiles, lasers, radar, night vision goggles, and satellites all depend on rare earth metals to function.
Hyundai, the world's fifth-biggest carmaker along with Kia Motors, proposed in a regulatory filing on Friday a change in its articles of incorporation to "secure resources for the development of eco-friendly vehicles."
The proposal is subject to approval at a shareholder's meeting on March 11.
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"We will make efforts to vigorously secure rare earths and other rare resources used in cars," The Sydney Morning Herald reported a spokesperson as saying.
Hyundai rolled out a hybrid version of its Sonata sedan in the United States in January, which was its first overseas hybrid model. Kia plans to roll out a hybrid Optima sedan in the United States in the first half.
Hyundai Motor plans to mass-produce pure electric vehicles next year after a test-run of its BlueOn cars this year, according to Hyundai Motor Group vice chairman Lee Hyun-soon.
Earlier in December, Toyota Tsusho Corp, the trading company part-owned by Toyota Motor Corp, struck a deal with the Indian government to build a rare earth processing plant to secure supplies. This pact will help in securing approximately 3,000 to 4,000 tons annually
China suspended shipments of the mineral to EU and US in October, media reports stated. The suspension came after there were indications that the U.S. would investigate if China was violating World Trade Organization rules by subsidizing clean energy exports and limiting clean energy imports.
China has been reducing export quotas of rare earth minerals for the past few years, citing environmental concerns. However, Wang Caifeng, who is in charge of setting up the China Rare Earth Industry Association, stated that China might slightly raise the production cap and export quota next year.
China, which mines more than 90 percent of the world's rare earth, has exported 6,000 tones, or 49.8 percent, of its total rare earth to Japan, representing a 167 percent rise year on year, according to China's Ministry of Commerce.
