Japan moves to secure rare earths to reduce dependence on China

Name: Amid US-China trade war, China aims to elevate its domestic rare earth industry
Uploaded: 2020-08-17T10:02:00.000Z
Duration: 1 min 44 s
Description: Amid US-China trade war, China aims to elevate its domestic rare earth industry

Tokyo to help Japanese firms obtain stakes in overseas mines and increase stockpile of the minerals, vital to the technology and defence industries

China’s previous moves to restrict exports of rare earths and the disruption to supply chains caused by the coronavirus have prompted Japan to act

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A bastnaesite mineral containing rare earth. Photo: Reuters

Julian Ryall

Published: 6:02pm, 17 Aug 2020Updated: 10:20pm, 17 Aug 2020

Japan is moving to increase its stockpiles of rare earth minerals and will help domestic companies to obtain stakes in overseas mines and the ability to process raw materials into the valuable minerals required for next-generation vehicles, communications equipment and other cutting-edge technologies.

Tokyo was already concerned about the possibility of a diplomatic disagreement with Beijing triggering an embargo on exports of rare earth minerals to Japan, but the disruption caused to supply chains by the coronavirus pandemic in recent months has hastened Japan’s efforts to secure materials that are critical to the futures of many of its companies.

There is evidence that China has used rare earth exports to make a point to the United States in the ongoing trade war between the world’s two largest economies, with customs data showing that Chinese exports of rare earths fell 16 per cent in May 2019 from the previous month to 3,640 tonnes. The US is the world’s largest importer of rare earths from China, with 59 per cent of its imports coming from China and analysts linking the issuance of export permits to leverage in trade negotiations.

In March, Japan announced plans to reduce its dependence on China for rare earth minerals and to diversify its supply routes. At present, China provides 58 per cent of the rare metals imported into Japan, while Beijing has also been quick to strike agreements with other governments to access their natural resources.

The Republic of Congo, for example, is the largest producer of cobalt in the world, but China has reached an agreement with the Congolese government so that 60 per cent of all the cobalt mined in the country is shipped to China to be smelted.

01:44

Amid US-China trade war, China aims to elevate its domestic rare earth industry

Japan relies on imports for 34 types of rare earth minerals, including terbium, europium, yttrium and lithium. Under the new government plan, the strategic stockpile of most of these minerals is being expanded from 60 days of domestic consumption to a supply adequate to meet demand for 180 days.

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