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Japan is set to commence imports of rare earth metals for India in order to hedge against worsening relations with chief supplier China.
The Asahi Shimbun reports that Japan is expected to announce the start of imports from India during a state visit by Indian Prime Minister Manmohan Singh next month.
India is expected to export 4,000 tons of rare earth minerals to Japan, supplying 15% of annual need.
Tensions between China and Japan have escalated in recent months due to disputed ownership of the Diaoyu Islands in the East China Sea.
China is considered by many to possess a strange-hold on rare earth minerals, producing over 95% of global supply on the back 37% of proven reserves.
Japan conversely is the world’s largest importer of rare earth minerals, which are indispensable ingredients for a slew of hi-tech products including smart phones and wind turbines.
This places Japan in a formidable strategic quandary, as China still harbours grievances against Japan for atrocities committed during in the Second World War and its imperial past.
China has used its dominance of rare earth supply in its disputes with Japan in the recent place, placing de facto embargo upon exports of the minerals to its archipelago neighbour in 2010.
Japan has thus striven to diversify its sources for the crucial industrial metals, reaching out to India now as an alternate source of supply.
Asashi also reports that Toyota Tsusho Corp and an Indian resource developer are currently undertaking preparations for the establishment of a joint venture to import rare earths to Japan.
2 Comments
Erdenebulgan
How do we find investor on RARE EARTH deposit in Mongolia? Don’t see many Japanese business coming to Mongolia. Are the Chinese companies most suitable?
Jack Lifton
Keep in mind that Indian exports to Japan will REPLACE Chinese exports to Japan. Both public and private Indian groups have extensive knowledge and history in the rare earth sector. I also know for a fact that R&D and engineering costs in India are much lower than in today’s China. Not only is India a low cost producer it also has the skills to utilize rare earths and by importing some technology to establish a low cost total supply chain for rare earth dependent products. I expect Japanese rare earth permanent magnet manufacturers are taking a hard look at the potential for outsourcing from Japan to India. This of course will be another body blow to the idea of non-Asian rare earth total supply chains being economically feasible.