Japan’s new rare earths strategy shows results
JAPAN is the largest importer and the second-largest consumer of rare earth elements (REEs) in the world. It uses a fifth of the world supply and in 2010 most of that - 82 per cent - came from China.
But trade with China came to an abrupt halt for six days in September 2010 in the wake of Japan's territorial dispute over the Senkaku islands in the East China Sea.
China, which is expected to produce 130,000 to 150,000 tonnes of rare earths in the next few years, has said it will restrict annual exports to other countries to around 35,000 tonnes of REEs by 2015.
The new policy of export restriction is being interpreted as a serious threat to Japan’s technology leadership in the use of rare earths for high tech products.
Production of top-quality glass for touch-screen computers and professional-quality camera lenses, which uses critical raw materials, was until a few years ago mostly carried out in Japan. But one result of China’s embargo has been to boost its own industry.
Japan also uses critical raw materials for making glass for solar panels and small steering control motors in conventional petrol-powered cars, as well as in hybrids.
While some manufacturers are trying to find substitutes for the materials supplied by China, Japan still has to ensure that its automotive industry retains a competitive advantage by securing preferential access to REEs.
The rare earth embargo in September 2010 was a sharp reminder of just how much Tokyo depends on imported industrial materials from its large neighbour.
But Japan has another problem. One of the unintended consequences of its new energy policies in the wake of the Fukushima nuclear disaster of March 2011 is likely to be an even higher dependence on Chinese REE imports.
Japan's new government is reviewing plans to phase out the nuclear option by 2030 or 2040. Any loss of nuclear power would mean that Japan would be forced to expand renewable energy sources (RES) for electricity production and heating. For this it would need more, not fewer critical raw materials, particularly rare earth magnets for windmills.
After China’s export embargo of REEs in what Japan and other countries called a ‘campaign of economic warfare’ in September 2010, Tokyo set out to diversify and secure sources of supply.
Between 2010 and 2011, Japan’s imports of REEs from China declined by around 21 per cent from 28,600 tonnes to 22,500 tonnes.
In 2011, Japan budgeted US$1.25 billion - equal to its total annual rare earth market value - to secure non-Chinese supplies.
Japan had already announced plans to begin mining REEs in Vietnam in 2010 and Japan signed another contract with Vietnam to produce 3,000 tonnes of REEs by 2013 and 7,000 tonnes in 2014.
A consortium of Japanese and South Korean companies acquired a 15 per cent stake in Brazil to secure supplies of REEs for the manufacture of high-tech goods.
Japan signed a contract in 2012 with Kazakhstan for 60 tonnes of dysprosium per year. The raw material is used in electric and hybrid car engines.
Japan and Kazakhstan also announced plans to begin extracting 1,500 tonnes of REEs annually, equivalent to 7.5 per cent of Japan’s annual demand. By 2017, the production will have expanded to 6,000 tonnes,
Japan has also reached an agreement with Mongolia for Tokyo’s import of REEs. And Japanese conglomerates are exploring the possibility of mining rare earths from deposits in Siberia.
There have also been discussions between Japan and India on seabed production of REEs.
Apart from finding new suppliers, Japan is also trying to find other ways to reduce its dependence on imports by using fewer raw materials, recycling and substitution.
The Japanese car maker, Toyota, has developed a way to make hybrid and electric vehicles without the use of expensive rare earth metals. Honda plans to start extracting and recycling REEs from nickel-metal hydride batteries used in hybrid cars.
In February 2012, electronics giant, Panasonic, introduced recycling equipment that extracts neodymium magnets from home electrical appliances.
The Japanese industry ministry announced in 2011 it would decrease the country’s total REEs demand by 30 per cent or 10,000 tonnes a year in the medium to long term.
Japan’s new innovation strategy is already reducing its dependency on China. In 2012, Japan imported 15,400 tonnes of rare earths from China, a 34 per cent decrease on 2011.
By mid-2013, it hopes to have reduced its imports from China from more than 80 per cent in 2010 to just 50 per cent.