In general, the Japanese government does not plan well. From long ago. In everything.

In 2010, when the market price of rare earths skyrocketed due to the Senkaku Islands, the entire country launched a negative campaign against rare earths, and in order to get rid of China, a large budget (tax money) was allocated to supply rare earths from suppliers other than China and to recycle them. But let’s look at the present situation. The supply of recyclable materials is almost zero. While the Imports of rare earths from Malaysia and France have increased slightly, the dependence on China remains unchanged. Because of our national character which is easy to heat up and cool down, and because the METI staff change every two years, it is not sustainable even if it is serious for a moment. Therefore, even though the Sankei Shimbun reports the following, the crystallization and sustainability of the plan are highly questionable. It is more important to nail them down so that they do not spend taxpayers’ money unnecessarily.

According to a report in the Sankei Shimbun last week, it was learned on May 13 that the Japanese government will work to improve domestic refineries in order to strengthen the supply chain of rare earths, a rare metal that is essential for the manufacture of smartphones and next-generation automobiles. The government has concluded that the current concentration of rare earth materials as well as refineries in China threatens Japan's economic security. In order to avoid dependence on China, the government will make it possible to domestically refine raw materials procured from Australia and other countries. The government will determine the scale of the budget by formulating support measures for companies.

About 60% of the rare earths used in Japan are imported from China. The Japanese government has been working to diversify its procurement sources, for example by forming alliances with the miners in Australia. However, the reality is that raw materials from Australia go through multiple refining processes in Malaysia and Vietnam, where labor costs are low and land for facilities is plentiful, before finally being transferred to Japanese metal manufacturers for commercialization as magnets.

There are a few companies in Japan that have refining capacity, but none of them are on a large scale. Therefore, the government will support the expansion of the scale of smelting plants and the increase in the number of participating companies. The government will also request them to respond to the demand for rare earth recycling.

As mentioned above, recycling of rare earths can be done in Japan if it really intends to, but major magnet manufacturers are doing it overseas. Also, it is doubtful whether the only remaining facility in Japan will be able to survive in the future.

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Rare earths have become a "strategic material" that is also indispensable for sophistication of military technologies. With the United States in mind, China, the world's largest supplier of rare earths, announced in January this year a draft of a "control ordinance" to strengthen control over the supply chain, from mining and refining to product distribution. There is a possibility that rare earths will be covered by the Export Control Law, which came into effect last December and regulates the export of strategic goods and technologies related to national security.

As environmental regulations become more stringent, it will become even more important for Japanese companies to secure neodymium and dysprosium, which are essential raw materials for rare earth magnets for next-generation automobiles, as well as cerium, which is used in exhaust gas catalysts for automobiles.

The government also intends to conduct a cross-ministry study of restrictions on the expansion of refining plants due to environmental, fire safety and other security regulations, in order to ensure a stable supply of rare earths and lower costs.

About this Sankei Shimbun report, a veteran rare earth industry insider commented in response to the interview,

"If the government says it's going to do something, it's going to be vertically divided and no action will be taken.”

“METI may be willing to do so, but the Agency of Natural Resources and Energy in charge of mineral resources does not have authority to provide guidance on plant construction, and the Fire and Disaster Management Agency is responsible for expanding the amount of solvent permitted for solvent extraction. Nitrogen and boron emissions are regulated by the Environment Agency.”

“The demand for rare earths in Japan has shrunk considerably since the 1980s. The size of the business is too small for a large company to operate, and a small business does not have the funds and technology. I don't think we can do it. We should focus on protecting the existing infrastructure," he said.

I cannot agree more.

（IRUNIVERSE/MIRUcom）