Japan, India move to extend rare-earth co-operation

INDIAN and Japanese officials are talking about how the two countries can continue working together on rare-earth resources.

The move comes as nations jockey to reduce their dependence on China’s rare-earth deposits.

"It definitely figured in our discussions," Commerce and Industry Minister Anand Sharma said of the key industrial minerals.

His comments came after he met with Foreign Minister Seiji Maehara, following the signing of an India-Japan free-trade pact.

According to a Japanese government statement, Mr Maehara told Mr Sharma that "he would like to make progress on rare-earth development."

The free-trade agreement will do away with tariffs on 94 per cent of trade between the two countries within 10 years.

It also includes provisions that could make it easier for Japanese companies to invest in the development of rare earths in India, according to Takeshi Matsunaga, a Japanese foreign-ministry spokesman.

Japan's technology industry makes it the world's largest importer of rare earths, needed for products from mobile phones to military hardware.

It has sought alternative supplies since China reduced shipments last year. China produces 97 per cent of the minerals.

The free-trade deal came two days after official data showed Japan ceded its place as the world's second-largest economy to China in 2010.

China's growing market for Japanese goods has galvanised corporate Japan, but many business leaders say the risk of diplomatic flare-ups with China highlights the need for more partnerships, like the one with India.

India's Prime Minister Manmohan Singh and Japanese Prime Minister Naoto Kan said in Tokyo last October that the two countries would explore rare-earth co-operation.

About six weeks later, Japanese trading house Toyota Tsusho, partly owned by Toyota Motor Corporation, announced plans to construct a rare-earths processing plant in India in co-operation with Indian Rare Earths - part of efforts "to secure supply sources outside of China," the Japanese company said at the time.

Mr Sharma said that both Delhi and Tokyo support the joint venture.

Separately, Mr Sharma said Delhi was not concerned about the recent weakening of the rupee, adding that he did not see a link between the value of the currency and rising inflation.

The rupee is "at the correct level," Mr Sharma said. "It's not causing any concern or anxiety in the Indian government or to the Reserve Bank of India, which carefully monitors it."

Inflation, by contrast, "is a matter of concern," Mr Sharma said, although echoing comments by Mr Singh, he added that it "will definitely come down."

（source from：The Wall Street Journal）