Japan inks pact with India to import rare earth metals from India
India and Japan inked a strategic agreement that will allow Japan to import rare earth minerals from India.
Why such a move by Japan?
- Until now, Japan has been importing all its rare earth material requirements from China. But, tensions b/w China and Japan have risen in recent months due to disputed ownership of the Diaoyu Islands in the East China Sea. China also still carries the grudges against Japan for atrocities committed during in the World War-II and its imperial past.
- China is the world’s largest exporter of rare earth minerals possess a strong-hold on rare earth minerals, producing over 95% of global supply on the back 37% of proven reserves. Japan on the other hand is the world’s largest importer of rare earth minerals. Thus, China has used its dominance of rare earth supply in its disputes with Japan in the recent times, placing de facto embargo upon exports of the minerals to Japan in 2010. China thus in a way is able to blackmail Japan by contending that it will stop supply of rare earth metals to Japan. Therefore, Japan wants to diversify its sources for the rate-earth metals and reduce its heavy reliance on China.
Rare-earth metals are essential ingredients for a lot of hi-tech products including smart phones, etc.
Japan will import over 4,000 tonnes of rare earths a year from India equivalent to about 10% of Japan’s peak yearly demand.
Production and exports by a joint venture b/w:
- Japan’s Toyota Tsusho Corp. and India’s state-run Indian Rare Earths Ltd.