Japan and India will jointly produce rare-earth metals for export to Japan, marking another step in Tokyo's push to wean itself from its dependence on China, a top-selling business daily here reported Thursday.
Japanese Prime Minister Shinzo Abe and his Indian counterpart Narendra Modi are expected to agree on the deal at their meeting Monday in Tokyo, the Nikkei Shimbun said.
Indian Rare Earths, a wholly owned subsidiary of the Department of Atomic Energy, and Japanese trading firm Toyota Tsusho will sign a contract on joint production as early as next month, the newspaper said, adding that exports will start as soon as February. About up to 2,300 tons, or roughly 15 percent of demand in Japan, will be made each year.
The Modi government, launched in May, decided to that a quick market entry is the best way to exploit the country's natural resources.
Rare-earth metals are used in a number of high-tech processes ranging from missiles to hybrid cars and laptop computers. Japan has also signed agreements for joint development of rare-earth metals with Vietnam and Kazakhstan, aiming to reduce the risks of procuring them almost exclusively from China. Japan had relied on China for more than 90 percent of its imports of rare-earth elements. But after a September 2010 incident in which a Chinese fishing boat collided with Japanese patrol boats near the disputed islands in the East China Sea, Beijing cut back on shipments, raising concerns about ensuring stable supplies.