Japan comes knocking for rare earth, uranium stakesSarah-Jane...

Japan comes knocking for rare earth, uranium stakes
Sarah-Jane Tasker | November 02, 2009

THE Japanese are increasingly looking to secure further resources supplies in Australia, with a focus on rare earths, to stem the dominance China has on the market.

Tomio Harada, the Australian general manager of the government-backed Japan Oil, Gas & Metals National Corp, Jogmec, said the group was focused on finding new opportunities in Australia in rare earths and the uranium sector.

The group, which is also focused on base metals, has already done a $3 million deal with Bondi Resources for its uranium project in the Northern Territory, where the Japanese can own 51 per cent of the project, and also has three other interests in Australia.

Mr Harada said the group was interested in pursuing further joint venture opportunities with Australian companies.

Once interest is established, the stake is then transferred to a Japanese company, which differs from the state-owned Chinese companies' holdings in Australian interests.

He said that China's interest was driven by the need for control, whereas Japan was aware of the national interest concerns in Australia, adding that he understood the recent comments by Foreign Investment Review Board executive director Patrick Colmer that the government preferred foreign investment in undeveloped mineral deposits to stay below 50 per cent, and for investment in "major producers" to stay below 15 per cent.

"Japan has a long relationship with Australian companies and we want to extend our relationship here," he said.

Mr Harada said the Japanese were not interested in controlling Australia's resources sector and were happy to secure long-term contracts and interests as they had been doing for many years.

He added that the Japanese were interested in getting involved at the grassroots level, and the recent lifting of the ban on uranium mining in Western Australia could create opportunities to gain further interests in the yellowcake.

"There is huge potential for investment in the natural resources sector," he said.

Mr Harada said Japan was also focused on being involved in emerging green technology, including Australia's drive to further develop carbon capture storage technology.

"The Japanese government is most welcome of developing green technology, with carbon capture storage," he said.

"The government is corroborating with Australian companies and government about CCS."

A study released last week by the University of Queensland -- Coal and the Commonwealth -- said 12 CCS demonstration programs worth in excess of $1bn were under way in Australia.

"Australia, because of its vested interest in continuing to reap the economic benefits from its plentiful coal resources and its heavy reliance on coal as an energy resource, is among the world leaders in the development of these low-emissions technologies," the report concluded.

Jogmec, whose main role is to ensure the stable supply of energy and natural resources to Japan, is also keen to secure rare earths supply, which is dominated by China. The group has already established that it is looking for rare earths opportunities in Vietnam and Kazakhstan.

Japanese media have recently reported a high level of awareness in Japan of China's stranglehold on rare earths and, if Japan cannot find alternative supplies, its technology industries could be disadvantaged.

"Rare earths, used in green technology, is dominated by China. In Australia there is Arafura and Lynas Corporation developing rare earths mines and we are keen to look in that area," Mr Harada said.

http://www.theaustralian.news.com.au/business/story/0,28124,26290335-36418,00.html