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The Ministry of Economy, Trade and Industry said Friday it will grant ¥33.1 billion in subsidies for 160 capital investment projects that would contribute to reducing the use of rare earths or diversifying suppliers of the minerals.

Japan is trying to reduce its heavy reliance on China for the resources vital for making high-tech goods, after China’s rare earth exports temporarily stagnated last autumn amid the diplomatic spat over the Senkaku Islands.

The scale of the projects could total about ¥110 billion, including capital spending by the companies themselves, and METI expects Japan’s annual use of rare earths to fall by about 10,000 tons, compared with the current 30,000 tons.

The government earmarked ¥100 billion for measures to secure a supply of rare earth minerals in an extra budget for fiscal 2010. Of that funding, ¥42 billion was set aside for the capital investment support.

By receiving the subsidies, for example, Nissan Motor Co. plans to invest in facilities aimed at conducting experiments so auto parts can be made without rare earths. Toshiba Corp. will install polishing equipment that could enable the company to use less cerium, a type of rare earth.

Bolivian quid pro quo

RIO DE JANEIRO (Kyodo) Bolivian President Evo Morales expressed willingness Thursday to select Japan as a lithium development partner if car manufacturers such as Toyota Motor Corp. produce electric vehicles in the lithium-rich South American country, officials at the Japanese Embassy in La Paz said.

Morales made the remarks at an economic development seminar attended by Kaname Tajima, vice minister of economy, trade and industry, and officials of Japanese firms. Lithium is a key resource in producing batteries for electric vehicles.

South Korea and other nations have shown interest in joining lithium projects in Bolivia, which has about half of the world’s known reserves.

Prime Minister Naoto Kan and Morales met in Tokyo in December and agreed to cooperate on commercial production of lithium in Bolivia.

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