Japan is celebrating the find of an “astronomically” high level of rare earth deposits at the bottom of the Pacific Ocean, a discovery which will further undermine China’s failing attempts to control the global supply of the substances.

The deposits, a vital component in the production of a range of high technology equipment from smartphones to catalytic converters, were found around 5.8km under the ocean surface near Minami Torishima island south-east of Tokyo.

“We detected an astronomically high level of rare earth minerals in the mud we sampled,” Tokyo University boffin Yasuhiro Kato told Reuters.

“When researchers brought back the data to me, I thought they must have made a mistake, the levels were so high. The fact is this discovery could help supply Japan with 60 per cent of its annual needs merely with the contents of a single vessel.”

The find follows a much larger discovery by Japanese marine researchers in the Pacific two years ago and if the rare earths can be extracted cheaply enough, it could crucially give Tokyo the tactical upper hand over China in the on-going cat-and-mouse game between the two over supplies.

Beijing halted exports to Japan in September 2010 after a maritime dispute and has actively restricted exports to all countries since in a bid to drive up prices and force manufacturing investment onto its shores.

However, despite being investigated by the WTO for such policies, China has suffered in recent months as a slowdown in global demand combined with other countries re-starting their own mining operations, has sent prices tumbling.

In October last year, its largest mining company for light rare earths, Inner Mongolia Baotou Steel Rare Earth Hi-Tech Company, was forced to suspend operations for a month to let demand pick-up. Japan take more than half of China's supply but is thought to have imported just 10,000 tons in 2012 – its lowest volume in a decade.

While last weekend’s undersea discovery will be well-received in Tokyo,, it’s unlikely to have any big repercussions in the near term, short of forcing China to keep its prices low.

China claims it holds less than a third of global rare earth reserves despite providing more than 90 per cent of the world’s supply. ®