Molycorp Inc, Daido Steel Co Ltd and Mitsubishi Corporation announced the formation of a joint venture to manufacture and sell next generation neodymium iron-boron (NdFeB) permanent rare earth magnets.

The joint venture will manufacture sintered NdFeB permanent rare earth magnets with technology licensed from Intermetallics Inc, a partnership between Mitsubishi, Daido and Dr Masato Sagawa, co inventor of the NdFeB magnet.

The capital contribution ratio of the newly formed company will be 30.0% by Molycorp, 35.5% by Daido, and 34.5% by Mitsubishi. The joint venture will be financed by the three shareholders and by a government subsidy sponsored by Japan's Ministry of Economy, Trade, and Industry.

The joint venture plans to construct an initial 500 tonne per year magnet manufacturing facility in Nakatsugawa, Japan (Gifu Prefecture), with operations expected to commence by January 2013. The companies expect to begin work on the new facility next month and eventually expand operations in the US and elsewhere.

The technology to be used by the joint venture is a new and novel approach that does not depend on the use of patents held by other magnet companies. The technology allows for the manufacture of permanent rare earth magnets that deliver greater performance with less reliance on dysprosium, a relatively scarce rare earth. The process also results in higher production yields.

Made with the rare earths neodymium, praseodymium and dysprosium (or terbium), NdFeB magnets are the world's most powerful permanent magnets and are key components in many advanced technologies, including high performance motors used in the power trains of electric vehicles, hybrid vehicles and wind power generators, as well as in motors in home appliance and industrial applications.

Target markets for the joint venture are the automotive and home appliance markets. These markets, as well as other markets for environmentally friendly technologies, are forecast to be significant drivers of demand growth for permanent rare earth magnets. The joint venture has been provisionally awarded a supply agreement for a next generation electric vehicle with a major automotive manufacturer.