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Japan looks to Burma for rare earths

Japan is looking to jointly develop mining for rare earth metals with the Burmese government, reports say, as it looks to diversify supply away from China.

The Kyodo news agency said that the Japanese would attempt a deal with Burma’s foreign minister, Wunna Maung Lwin, on his next visit to Tokyo.

“Japan is informally sounding out Myanmar [Burma] about sending Foreign Minister Wunna Maung Lwin to Japan later this year to advance the plan,” said the Kyodo news agency.

Rare earth metals are 17 compounds that are essential for the manufacture of many electronic devices, including mobile phones, cells for hybrid cars, and wind turbines.

China currently supplies 90 percent of the world’s rare earth supply, but sent shockwaves through the supply chain by announcing new environmental legislation which resulted in inspections of mines as of last month, with the results expected in October.

“I would expect there would be a shortage developing in the next two to three months,” Constantine Karayannopoulos, chief executive of rare earths producer Neo Metals, told the Financial Times earlier this month.

However Japan’s tense relationship with China saw Beijing’s alleged blocking of exports to Japan stemming from a diplomatic tussle over maritime boundaries in the contested Spratley Islands in September last year.

This has pushed manufacturing nations, including South Korea, to seek fresh supplies from countries like Burma. The imperative is even greater however for Japan – after the country’s nuclear disaster at the Fukushima plant in March this year, Japan sought to diversify its electricity sources, with natural gas the most appealing alternative.

This led to the most senior delegation to visit Burma in June led by Japanese Parliamentary Vice Foreign Minister Makiko Kikuta, during which it was announced that Japan would resume development assistance beyond humanitarian aid after a freeze that began in 2003 following Aung San Suu Kyi’s detention. Wunna Maung Lwin was allegedly invited to Tokyo after this trip.

This coincided with Japanese companies Star Field and Star Holdings signing a deal with Burma’s Ministry of Oil and Gas Exploration (MOGE) to explore for natural gas in 20,000 square kilometres of Kachin state’s Hukaung valley.

The environmental implications of rare earth exploration however are considerable –  China’s move to regulate the industry, which often sees miners pump litres of toxic chemicals into the earth, should stand as a warning to Burma’s new president and what he has pledged as a commitment to environmental protection.


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