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Japan continues to diversify its REE suppliers with imports from Kazakhstan

Against the backdrop of mounting tensions in the territorial dispute between Japan and China over the Senkaku/Diaoyu Islands, Japan has recently been stepping up its efforts to diversify the sources of its mineral resource supply.

Japan-based Sumitomo Corporation will import Rare Earths from Kazakhstan, according to the website Finance GreenWatch. With the backing of the Japanese government, which will also provide financial support, the company has formed a joint venture called Summit Atom Rare Earth Company LLP (SARECO) with Kazakhstan’s National Atomic Company Kazatoprom. Established in May 2010, the joint venture completed construction and opened its first factory earlier this month.

Sources expect that roughly 1,500 tons of REEs will enter Japan per year, which accounts for 7.5 percent of annual demand, which currently is about 20,000 tons.

Heavily dependent on especially heavy REEs from China, the Japanese government started negotiations including Australia and India, after China temporarily suspended exports to the country in 2010. The flare-up of territorial tensions in the East China Sea has provided new impetus for Japan to “lessen the diplomatic pressure China is able to exert due to its possession of natural resources.”

As the East China Sea, Africa, the Arctic, and other parts of the world increasingly turn into geopolitical battlefields of the global resource wars, the big question is: What (if any) is the United States’ mineral resource strategy? Hopefully the issue will be addressed and resolved after the dust of the Presidential elections has settled – our manufacturing base depends on it.