Japan has agreed to help Mongolia develop mines to exploit rare earth metals in the wake of its bilateral ruckus with China over supplies of the crucial elements.
The accord was struck Saturday between Prime Minister Naoto Kan and his visiting counterpart, Sukhbaatar Batbold, Japanese officials said.
“Mongolia has high potential in mineral material development and this will serve the two countries’ national interests,” Kan was quoted as saying.
Batbold said Mongolia will be able to produce value-added products by using advanced Japanese technology, the officials said.
The meeting, which was also attended by senior Japanese officials from top trading houses and other companies, comes a day after the government unveiled policies to secure stabler supplies of rare earth metals. The steps include stockpiling and plans to diversify suppliers to reduce Japan’s heavy dependence on China.
Batbold is visiting Tokyo to attend Sunday’s retirement ceremony for Mongolian sumo wrestler Asashoryu, a yokozuna, or grand champion, who left the sport in February.
Rare earth metal imports from China suddenly dried up last month as Japan and China engaged in a tit-for-tat spat over the arrest of a Chinese fishing boat captain last month whose trawler collided with Japan Coast Guard cutters near the Senkaku Islands, which are controlled by Japan but claimed by China and Taiwan.
Kan last met with Batbold in late September in New York on the sidelines of U.N. General Assembly meetings.
Rare earth metals are a class of 17 elements including neodymium, dysprosium and cerium that are used to produce high-tech products ranging from cell phones and digital cameras to flat-panel TVs and hybrid cars.
China accounts for about 97 percent of the world’s supply of rare earths and Japan is almost 90 percent dependent on China to obtain them, according to the Ministry of Economy, Trade and Industry.
A METI official said there are also precious reserves of rare earths in Kazakhstan and Vietnam, and that Tokyo will try to acquire stakes in mines beyond China to ensure supplies.