Japan to Spend 110 Billion Yen to Cut Rare Earth Usage
Japan’s government and more than 100 companies including Hitachi Metals Ltd. and Toyota Motor Corp. plan to spend 110 billion yen ($1.3 billion) on facilities to reduce the nation’s reliance on rare earth imports.
The Ministry of Economy, Trade and Industry will put 33.1 billion yen toward the cost of 160 projects for 110 companies, with the balance paid by the companies, the ministry said today in a statement.
Japan, the world’s largest rare-earth importer, is seeking to cut rare-earth use by one-third, or 10,000 metric tons a year, to reduce its reliance on Chinese supplies, the ministry said. The nation is also stepping up efforts to invest in overseas mines after China’s export restrictions increased tension between the two nations last year.
“The framework will benefit Japanese industries, enabling individual companies to cut the burden of costs and shorten the term of development,” said Yasuhiro Matsumoto, an analyst at Shinsei Securities Co. in Tokyo. “The government’s involvement in a wide range of domestic industries will also likely increase negotiation power with China.”
China controls more than 95 percent of the world’s supply of rare earths, a group of 17 chemically similar elements used in hybrid cars, iPods and weapons.
The package “is based on the idea that the government will give support to companies making efforts to secure rare-earth supplies,” Trade Minister Banri Kaieda told reporters in Tokyo.
Alternatives
Toyota Motor Corp., the world’s largest seller of hybrid autos, is developing an alternative motor for future models and electric cars that doesn’t need rare-earth minerals. Toyota engineers in Japan and the U.S. are working on a so-called induction motor that’s lighter and more efficient than the magnet-type motor now used in its Prius, company spokesman John Hanson said last month.
Intermetallics Co., Asahi Glass Co., Nissan Motor Co., Panasonic Corp. and Mitsui Mining & Smelting Co. are among other companies receiving the subsidies, the statement said.
China’s rare earth exports to Japan rose more than sixfold to 4,081 tons in December from a month earlier, according to a Jan. 31 report released by Japan’s Finance Ministry.
To contact the reporter on this story: Masumi Suga in Tokyo at msuga@bloomberg.net
To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net.
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