These years, there have been frequent reports in the news media that the Japanese government will strengthen its reserve system for rare metals used in industrial products such as electric cars. Japan’s reserves of minor metals are now guaranteed for 60 days of domestic consumption and are set to expand to more than six months. Minor metals are essential to Japan’s cutting-edge industries but are heavily dependent on rare earths from specific countries such as China. Japan imports almost all of the precious metals that its industry needs. For example, about 60% of the rare earths that needed for magnets for electric cars, are imported from China. 2018 annual Statistics from Japan’s Ministry of Economy Trade and Industry show that 58 percent of Japan’s minor metals were imported from China, 14 percent from Vietnam, 11 percent from France and 10 percent from Malaysia.
Japan’s current 60-days reserve system for precious metals was set up in 1986. The Japanese government is prepared to adopt a more flexible approach to stockpile rare metals, such as securing reserves of more than six months for the more important metals and less important reserves of less than 60 days. To avoid affecting market prices, the government will not disclose the amount of reserves.
Some rare metals are originally produced in Africa but need to be refined by Chinese companies. So the Japanese government is preparing to encourage Japan’s Oil and Gas and metals mineral resources institutions to invest in refineries, or to promote energy investment guarantees for Japanese companies so that they can raise funds from financial institutions.
According to the statistics, China’s exports of rare earths in July were down about 70% year-on-year. Gao Feng, spokesman for China’s Ministry of Commerce, said on August 20 that production and business activities of rare earth downstream enterprises have slowed down since the beginning of this year due to the impact of coVID-19. Chinese enterprises conduct international trade in accordance with changes in international market demand and risks. Exports of rare earths fell 20.2 per cent year-on-year to 22,735.8 tones in the first seven months of this year, according to data released by the General Administration of Customs.