(Reuters) - An underwater bonanza of rare earth deposits discovered by Japanese scientists poses little threat to miners already developing major rare earth projects on solid ground.

Companies such as Molycorp, Lynas and Avalon Rare Metals may rest assured that developing the offshore bounty could take decades and cost billions, making it little more than a pipe dream, analysts say.

"'Desperado', that's the first word that comes to mind," said Jacob Securities analyst Luisa Moreno. "It makes for some nice headlines, but I don't think it would really be feasible to do this."

The discovery of the vast deposits, located on the floor of the Pacific Ocean, 3,500 to 6,000 meters (11,500 to 20,000 feet) below sea level, marks the latest bid by the Japanese to secure their own supply of rare earths, which are critical ingredients in the production of high tech products.

Prices for rare earth metals have skyrocketed over the last year as China, producer of some 97 percent of the global supply, has repeatedly clamped down on exports.

Dysprosium, which is used to make magnets for hybrid cars and smartphones, has soared to $3,600 a kilogram, up from $300 a kg a year ago, while neodymium, also used in magnets, is hovering at about $450 a kg, up from $45 late last year.

David Fuller's view I agree that the story of harvesting large quantities of rare earths from the ocean floor is largely a pipe dream and not just because of reasons cited in this article.

Environmentalists were successful in closing down rare earths mines in the USA, Canada and Australia, until China cornered the market and 'needs must' led to realpolitik decisions by governments to reopen them.

Fish farming in ocean waters, which sounds green and is certainly necessary, is contentious enough. Just imagine the justifiable furore over trashing the ocean floor in search of toxic metals.