JAPAN TO EXPAND EFFORTS TO ACQUIRE RARE METALS

UNCLAS SECTION 01 OF 02 TOKYO 000271 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: EMIN ENRG PREL SENV JA XA SUBJECT: JAPAN TO EXPAND EFFORTS TO ACQUIRE RARE METALS SENSITIVE BUT UNCLASSIFIED. PLEASE HANDLE APPROPRIATELY. ¶1. (SBU) SUMMARY: The GOJ is more than doubling its budget for rare metals exploration and acquisition in FY2009. Priorities include remote sensing activities in southern Africa, projects to stockpile and recycle rare metals from used equipment, and research to leverage advances in technology to extract rare metal deposits from abandoned mines, according to a senor official from the Japan Oil, Gas and Metals Exploration Corporation (JOGMEC). These activities are at the core of the GOJ's intensifying strategy to secure Japan's 3.3 trillion yen demand for rare metals used to manufacture personal computers, cell phones, audio devices, navigation systems, aircraft, and autos. END SUMMARY. ¶2. (SBU) The JOGMEC Director General for Metals Finance Tsuguyo Takahashi told emboffs the JOGMEC is pleased with the proposed FY2009 budget for metals exploration activities and is eager to expand several projects as soon as the budget passes the Diet. The JOGMEC's funding for rare metals exploration and acquisition in FY2009 will more than double to 31.1 billion yen ($346 million). ¶3. (SBU) Although international demand for rare metals is currently down due to global economic conditions, the JOGMEC expects supplies will tighten in the near future as demand for new energy technologies such as solar panels and fuel cells, as well as liquid crystal displays and other devices that rely on these commodities increases. Takahashi added the yen's appreciation has been a boon to the JOGMEC's projects overseas. NEW REMOTE SENSING COOPERATION -------------- ¶4. (SBU) Takahashi identified remote sensing for deposits of rare metals in Africa as a key focus of the JOGMEC's rare metals procurement strategy. Under an agreement concluded at the spring 2008 TICAD IV conference in Tokyo, the GOJ established a geologic remote sensing center in Botswana. (Note: According to GOJ Africa funding strategy documents, the center's total budget for the next five years amounts to five hundred million yen. End Note.) The JOGMEC began training Botswana Geological Survey project staff to manage the facility in August 2008 and encouraged Mozambique, Madagascar and South Africa to participate in the project during a mission to Southern Africa in September 2008 ¶5. (SBU) Takahashi said the JOGMEC has been running several exploration projects from the Botswana center with state-run mining companies from neighboring countries as well as with major multinational natural resource companies. The JOGMEC intends to ramp up these projects once the FY2009 budget is passed. The JOGMEC is expanding its activities elsewhere as well, e.g., through a joint exploration agreement with the Brazilian metals and mining company Vale signed in May 2008. INCREASING DEMAND RESULTING IN RECYCLING -------------- ¶6. (SBU) The JOGMEC is financing programs to recycle used rare metals from disposed computers, cell phones, and other devices. Takahashi said the JOGMEC is collaborating with Dowa Kogyo, a major recycling company, to research jointly environmentally friendly recycling operations. (Note: the FY2009 budget proposal for rare metals recycling more than doubles the FY2008 amount from 1.2 billion yen to 2.9 billion yen. End Note.) This research project also includes a GOJ-funded study on the health hazards of working with metals recycling run by the Akita prefecture Kosaka Institute. ¶7. (SBU) The third priority for the JOGMEC is to fund research projects to extract rare metal deposits remaining in abandoned mines. Takahashi explained technological advances have made it feasible to extract rare metals from Japanese deposits where the yields were previously too small or activities too costly to justify extraction. The JOGMEC is financing a joint project with Sumitomo Metal & Mining that deploys these new technologies to re-open the Hishikari Mine in Kagoshima-prefecture. Officials at the JOGMEC believe these mine re-openings can be an important domestic source of rare minerals. TOKYO 00000271 002 OF 002 ZUMWALT