Tokyo’s new governor, Naoki Inose, announced the city would subsidize companies with a project to mine rare earth elements from the seabed off Minami-Torishima Island, to the southeast of Tokyo.
The Asahi Shimbum reports that the measure aims to help local businesses and the national industry by reducing Japan’s dependence on China as a leading source of rare earths imports.
Experts estimate the Minami-Torishima island seabed holds rare earth deposits equivalent to more than 200 times what Japan needs a year. But the extraction of those resources from the sea floor requires technology and funding.
Recently Japan has been turning to Central Asia for supplies of rare earth minerals, with Sumitomo Corp opening a rare earth plant in conjunction with state-owned Kazakh company Kazatomprom last November.
China’s export controls on rare earths have soured ties with the world’s major users, including the U.S. and Japan. The World Trade Organization (WTO) agreed in July to probe China’s export limits and tariffs on the metals amid complaints that the curbs break global commerce rules.
Beijing currently supplies 95% of the world's rare earth minerals, occupying a position not too dissimilar to that enjoyed by OPEC with respect to oil. A few years ago, the nation embarked on a crackdown on illegal rare earth mines and consolidation of the industry under a few large producers.
Controversially the country – which is also the number one consumer of rare earths – also places a cap on exports to put a floor under prices of the 17 elements used in a variety of industries including green technology, defence systems and consumer electronics.
According to China Customs figures, exports of rare earths reached only 1,345 tons in October 2012, down 18% from the month before and far below the annual quota of more than 30,000 tonnes.
Production cuts have not achieved much either.