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Tokyo's Rare Metal Strategy
[Commentary] The strategy calls for various measures to ensure stable supplies
Hisane Masaki (hmasaki)     Print Article 
Published 2007-06-25 03:45 (KST)   
Resource-poor Japan is now revving up its drive to secure rare metals, which are used in a wide range of high-technology products, including digital home appliances, high-grade steel, and hybrid and fuel cell cars.

Highly alarmed by soaring prices on robust global demand and amid increased export restrictions by some producing countries, the Ministry of Economy, Trade and Industry (METI) mapped out a new comprehensive strategy recently for ensuring stable supplies of rare metals, especially tungsten, cobalt, vanadium, molybdenum, indium, platinum and rare earth, in the medium and long terms.

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For Japan, a major importer of these rare metals, ensuring their stable supplies has emerged as an all-important policy task to maintain and strengthen the international competitiveness of its industries.

The strategy calls for, among other things, beefing up state stockpiles of rare metals in terms of both volume and scope, promoting the recycling of scraps, developing alternative materials, extending official development assistance (ODA) for the development of new mines, and pumping public funds into efforts to help domestic private firms land mining interests abroad. The strategy also calls for strengthened relations with producing countries through such foreign-policy tools as free-trade agreements (FTAs).

Raising State Reserves of Rare Metals

Increasingly concerned about global supply shortages, METI compiled a comprehensive strategy this month for ensuring stable supplies of rare metals in the medium and long terms. It was the result of the first review of a government policy on rare metals in more than 20 years.

The new strategy calls for, among other things, increased state reserves of some rare metals. There has been increasing pressure on the government from domestic industries to boost such stockpiles.

In fiscal 1983, Japan began stockpiling seven types of rare metals -- nickel, tungsten, cobalt, molybdenum, manganese, vanadium and chromium. As of the end of March this year, Japan had reserves of these rare metals equivalent to 34.8 days of domestic demand -- 24.4-day stocks controlled by the state and 10.4-day reserves kept by the private sector -- compared with the target of 60 days. The government-affiliated Japan Oil, Gas and Metals National Corp. (JOGMEC) manages the state-controlled reserves at a warehouse in Takahagi, Ibaraki prefecture.

Under the new strategy, the government will increase the state reserves of vanadium, tungsten, cobalt and molybdenum and will also consider expanding the scope of state stockpiles to include indium, platinum and rare earth.

The strategy also calls for promoting the recycling of scraps and developing alternative materials. METI specifically plans to commission domestic non-ferrous-metal makers and universities this summer to develop alternative materials in hopes of putting them into practical use in five years' time.

Resource Diplomacy and Public Funds

The new strategy urges the government to step up its diplomacy aimed at securing new supply sources and also dissuading producing nations from taking export-restrictive measures. Tokyo believes that export restrictions should be introduced only as an exception under the international trade rules set by the World Trade Organization.

The strategy calls for increased Japanese support for mining development in foreign countries through the extension of ODA money. It also includes pumping public funds into efforts to help domestic private firms acquire mining interests abroad. The envisaged public funds will come from such government-affiliated organizations as JOGMEC, Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI).

Even before the strategy was adopted, Japan had already begun to place a greater emphasis on securing non-ferrous metals, including rare metals, as well as crude oil, natural gas and uranium.

In February, for example, Mongolian President Nambaryn Enkhbayar visited Tokyo and agreed with Japanese Prime Minister Shinzo Abe to promote cooperation between the two countries on the development of mineral resources, including rare metals. To implement the agreement, the two countries are expected soon to launch a joint committee of government officials and private-sector people. Mongolia is rich in a variety of minerals, especially coal and copper, although these remain largely unexploited.

During a tour of resource-rich Central Asia by the METI chief, Akira Amari, at the end of April, JOGMEC signed cooperation agreements with Kazakhstan and Uzbekistan for the development of mineral resources, including rare metals.
Hisane Masaki is a Tokyo-based journalist, commentator and scholar on international politics and economics. This is part of an article that originally appeared on Asia Times.
©2007 OhmyNews
Other articles by reporter Hisane Masaki

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