Japan eyes rare earth deal with Myanmar

Kyodo

Japan plans to jointly develop rare earth metals and other natural resources with Myanmar as it attempts to diversify its supply chain for the minerals, which are used in a slew high-tech goods, sources close to the matter said Sunday.

The move was prompted by China, which virtually has a monopoly over rare earth metals but reportedly stopped shipments to Japan last year during an escalating diplomatic spat.

Japan is informally sounding out Myanmar about sending Foreign Minister Wunna Maung Lwin to Japan later this year to advance the plan, the sources said.

But the strengthening of economic ties between the two countries might be criticized as premature on the grounds that Myanmar has been slow to advance toward democracy, although it nominally shifted to civilian rule in March.

In June, the government sent Parliamentary Vice Foreign Minister Makiko Kikuta to Myanmar as the first high-level official to visit the country in three years.

In her meetings with Myanmar officials, including Lwin, Kikuta noted that the Southeast Asian country had moved one step closer to democracy, while indicating Tokyo would work on human exchanges and economic cooperation on a bilateral basis.

The sources said Japan sounded out Myanmar on a potential visit by its foreign minister around the time of her visit.

Japan has gradually strengthened economic ties with Myanmar following prodemocracy icon Aung San Suu Kyi’s release from house arrest last year and the release last May of other political prisoners.

Although Japan had frozen all its Myanmar aid projects except for those related to humanitarian assistance, it decided to restart infrastructure projects that can directly help the Myanmar people, including hospital construction.

Japan’s eagerness to jointly develop rare earth metals with Myanmar stems from concerns among trade and government officials that the manufacturing sector can’t remain competitive if supply of the minerals is unstable. China controls more than 90 percent of global supply of the elements.

Rare earth metals are crucial to building smartphones, hybrid vehicles and other high-tech products, but their exploitation potential in Southeast Asia, including Vietnam and Laos, is said to be unexplored.