After Chinese ban, Japan looks at Mongolia for rare earths

After China unleashed the power of its monopoly over rare earths as an offensive against Japan to force it to release of a detained Chinese trawler captain for illegally fishing off a Japanese island, Japan has turned to Mongolia to secure supplies of the precious mineral over which China has a stranglehold.

Since Mongolia holds untapped reserves of rare earth, Japanese Prime Minister Naoto Kan struck an accord over the weekend with his Mongolian counterpart Sukhbaatar Batbold to help Mongolia exploit its rare earth metals with Japanese technology.

"Mongolia has high potential in mineral material development and this will serve the two countries' national interests," Kan was quoted as saying at a meeting on Saturday with Batbold.

Under the accord, Japan will help Mongolia to prospect and develop rare earths minerals and transfer its advanced technology in return for receiving a constant supply of the mineral found under the joint collaboration.

Japan will send its research team to Mongolia this month to launch exploration of rare earth minerals, Han said in a meeting that was attended by Japan's foreign ministry and top executives from trading companies like Itochu Corp, Sumitomo Corp, Mitsui & Co and Mitsubishi Corp.

Earlier Japan and Mongolia had held discussions, where Japan offered to develop Mongolia's natural resources like coal, copper and uranium deposits.
But after China blocked the exports of rare earth to Japan last month over the fishing boat row, the Japanese government decided to reduce its dependence on China and secure supplies from other sources.
China unofficially stopped exports of rare earth minerals to Japan after Tokyo detained a Chinese fishing boat and its crew for colliding with Japan Coast Guard vessel near the Japanese- controlled Senkaku Islands, which is claimed by China.