Japan Struggling to Reduce Rare Earth Dependence on China

Tokyo, Jan. 30 (Jiji Press)–Japan is facing the challenge of becoming less dependent on rare earth imports from China amid souring ties between Tokyo and Beijing. In its harsh response to Japanese Prime Minister Sanae Takaichi’s “Taiwan contingency” remarks, the Chinese government has shown signs of restricting Japan-bound exports of the minerals vital for the manufacturing of high-technology devices. “It’s not an easy task to reduce dependence on Chinese rare earths while limiting damage to domestic industries,” people familiar with the matter said. Some rare earths exist only in China, and powerful alternatives to them have yet to be discovered. Taking this advantage, Beijing has won a U.S. concession to reduce tariffs President Donald Trump imposed on goods from China by restricting rare earth exports to the United States. It also suspended Japan-bound exports after a Chinese fishing boat collided with Japan Coast Guard vessels off the Japan-administered Senkaku Islands, also claimed by China, in 2010. The public and private sectors in Japan have since boosted rare earth imports from Southeast Asia. Thanks to the effort, the Chinese imports’ share has dropped from 90 pct to 60 pct. As another measure to brace for a future export ban, the Japan Organization for Metals and Energy Security, or JOGMEC, has been increasing rare earth stockpiles and facilitating Japanese companies’ investments in foreign miners and refiners. Specifically, the government-affiliated organization started investing in an Australian mining firm in 2011 jointly with trader Sojitz Corp. and funded a French refiner with energy firm Iwatani Corp. last year. The Japanese government aims to accelerate such joint investments, by enhancing JOGMEC’s financial base. However, it may take more than 10 years for an investment project to enable product procurement, due to constraints from mineral exploration and anti-pollution requirements for refining, experts pointed out. While declining to disclose the amount of rare earths stockpiled by Japan, a government official tried to ease concerns over an abrupt halt in manufacturing firms’ operations by saying that the government is systematically stockpiling them. Still, with the stock system intended for temporary supply disruptions, the government will have to continue dialogue with China to reduce tensions between the two countries, critics said. END [Copyright The Jiji Press, Ltd.]