A wave of mining projects worldwide should tap into sizeable deposits of rare earths and ease supply concerns caused by export curbs in top producer China, France's strategic metals committee told Reuters.

A push to diversify supply sources and rising prices could encourage further exploration, including in Europe, while also spurring more recycling, said Francois Bersani, secretary general of COMES, a body created this year by the French government.

Demand for rare earths -- a group of 17 elements used for catalytic converters, battery cells and motors for hybrid cars, among others -- is expected to double in the next five years.

China accounts for more than 95 per cent of worldwide output of rare earths and its decision to slash export quotas for the first half of 2011 raised fears about a shortage.

'We don't have the impression that the term 'rare earths' should be taken literally. In other words they are not that rare in the earth's crust,' he said in an interview.

Projects such as Lynas Corp's new mining operation in Australia and Molycorop's plans to restart its mothballed Mountain Pass mines in the US show the potential for boosting rare earth production, he said.

'Looking at the decade ahead, you can imagine that there will be less (supply) tension than that which hit the headlines last year.'

Developing recycling

The reduced flow of rare earths has sent prices soaring and also led to a World Trade Organisation ruling against China, which it is appealing.

The European Union's executive said on Tuesday it was stockpiling rare earths as part of steps to reduce its reliance on China.

Bersani declined to comment on the move, saying he was waiting for the results of an EU study on the issue. 

The French government launched COMES earlier this year with a brief to assess the country's needs in metals deemed to be strategic for its economy.

China's share of estimated global reserves of rare earths was about 40 percent, indicating the scope for mining projects elsewhere, Bersani said.

This could include Europe, with particular interest at the moment in potential resources in Scandinavian countries, he said.

'We also have rare earths in France, it's just that we don't currently have in mainland France a deposit comparable to the Chinese ones or to Mountain Pass,' he added.

France has conducted subsea exploration in the Pacific territory of Wallis and Futuna to assess potential mineral reserves, although Bersani cautioned these offered much less concentrated deposits than on land.

'The Japanese say there are a lot of rare earths at the bottom of the Pacific,' he said, referring to a discovery made by a team of Japanese scientists.

'In a way, yes, but it's a bit scattered, there's not the type of concentration you have with earth deposits.'

Another way to boost access to rare earth supply would be by developing recycling, with Europe possessing a large potential resource as a major consumer of products containing the substances, he said.

French chemicals group Rhodia , acquired by Belgium's Solvay , is developing recycling of light bulbs at two plants in France in order to extract rare earth material.

However, supply and demand in rare earths would also depend significantly on technology trends, with the possibility that other substances could replace rare earths over time, Bersani said. – Reuters