To be fair, the government's only real powers are to create investment-friendly conditions and offer assistance which they have done for RNU. Now, King is inadvertently encouraging competition among the world’s leading corporations by saying that they should ‘lean in’ to Australia.
This is fantastic news for our investment because RNU is first in line and poised for the taking. All that matters to us, nevertheless, is a binding offtake. Who will be the first to sign an offtake, then? My bet is on Japan, whose economy is surging 'unexpectedly'.
What we know is that Japan’s Mitsubishi and Hanwa, and South Korea’s POSCO are vying for our resource (putting aside our two Chinese MOU’s for a moment). After CV19, South Korea’s economy was constantly in the lead, but the global markets have become extremely unsettled due to Japan's strengthening yen and BOJ recent rate hikes. This has caused a significant unwind of ‘carry trading’. Global traders of yen are now unable to service their debts with cheap money. Presently, Japan’s salaries have risen by 5% last year (most likely much higher due to data lag), and its people can buy things a lot cheaper – unlike in the west where consumer consumption is weak – its kept their economy afloat and their people are finding life a little easier. Yet inflation has stayed within the BOJ target range at 2%, which when you take all this together it means that Japan is currently on a huge development path.
The BOJ move may prove to be their most astute postCV19 tactical decision which is counter initiative to the rest of the world. It also implies that Japan might be ready to outpace South Korea's rate of economic expansion. Plus, let's not forget that Japan has a critical minerals trade agreement with the US while South Korea hasn't been able to secure one.
FOMO remains with the anode players. But given Japan’s renewed economic resurgence and confidence, it may the first to bite.
