Toyota Eyes Canadian Rare Earth Minerals

Toyota announced on Tuesday plans for a joint venture with a Canadian junior mining company to speed up the development of a rare earth elements mine in Quebec to supply Toyota hybrid and electric vehicles.

The Japanese auto maker said it has signed a non-binding memorandum of understanding with Montreal-based Matamec Explorations Inc. to collaborate to "fast track the development" of Matamec's Kipawa heavy rare earths deposit.

The agreement outlines a series of steps to establish the feasibility of the mine and Toyota's financing of the venture through to production of the deposit, with a "go/no go" option available to either party at each stage.

Under the terms of the deal, Toyota would end up with a 49 percent stake in the joint venture while Matamec would retain the remaining 51 percent.

Rare earth metals are a set of 17 chemical elements that, despite their name, are actually abundant in Earth's crust, but they are normally dispersed and rarely found in economically exploitable concentrations.

China currently produces almost 95 percent of rare earth elements (REE). It ordered a cut in REE exports in 2010 that provoked anger in Japan, Germany and the United States before export quotas were raised this year.