The Mineral Industry of Japan in 2001
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THE MINERAL INDUSTRY OF JAPAN By John C. Wu Japan’s resources of coal and nonferrous metals are limited. supplying primary materials not only to its own construction Its resources of carbonate rocks, iodine, pyrophyllite, and silica, and manufacturing sectors, but also to those sectors of however, are substantial (table 3). Japan relied heavily on neighboring China, the Republic of Korea, and Taiwan in imports of mineral fuels, which included coal, crude petroleum, northeastern Asia and Indonesia, Malaysia, Singapore, and liquefied natural gas (LNG), and uranium, and a wide variety of Thailand in southeastern Asia. crude ore and concentrates of nonfuel minerals to meet the raw In 2001, the Japanese economy slipped into its second material requirements for the large manufacturing and utility recession in the past 5 years following a 2-year positive growth (electricity and gas) sectors of its economy. path during 1999 and 2000. Japan’s real GDP (in 1995 constant In Japan’s manufacturing and utility sectors, the production prices) registered a 0.5% negative growth in 2001 compared capacity of cement, chemicals, electricity, and ferrous and with a 2.4% positive growth in 2000 and a 0.7% positive nonferrous metals industries was among the world’s largest. growth in 1999; this was largely the result of a 0.1% decline in These industries processed imported raw materials and private demand, a 7.9% decline in residential investment, a produced a broad category of mineral products, which included 3.4% decline in public investment, and a 6.6% decline in inorganic chemicals and compounds, ferrous metals, industrial exports of goods and services despite a 0.2% increase in overall minerals, nonferrous metals, petrochemicals, and refined domestic demand. Japan’s real GDP was estimated to be petroleum products, for domestic consumption and exports. $4,314 billion in 2001 (Economic and Social Research Institute, The electricity industry used imported coal, LNG, petroleum, 2002a, b§). and uranium and other nuclear fuel materials to produce Because of the economic recession in 2001, Japan’s industrial electricity to meet the electric power requirements for the production, as measured by the indices of mining and mining and manufacturing sector as well as other sectors of the manufacturing, decreased by 7.8%. The number of Japan’s economy. unemployed workers increased to 3.4 million from 3.2 million In 2001, Japan was one of the world’s major importers and in 2000, and its total labor force decreased to 67.52 million consumers of primary aluminum, cadmium metal, chromite, from 67.66 million in 2000. As a result, Japan’s unemployment coal, cobalt metal, copper ore and metal, diamond, rate rose to 5.0%, which was a record high, from 4.7% in 2000. ferrochromium, ferronickel, fluorspar, gallium metal, iron ore, Japan’s merchandise trade surplus shrank to $54.0 billion ilmenite and rutile, indium metal, industrial salt, lead ore and compared with $99.4 billion in 2000, and the Japanese yen (¥) metal, LNG, lithium metal, manganese ore, magnesium, nickel depreciated by 11.3% to ¥121.5 against US$1.00 in 2001. As ore and metal, crude petroleum, potash, phosphate rock, measured by the consumer price index, Japan’s rate of deflation precious metals, rare earths, silicon metal, zinc ore and metal, was 0.7%, which was the same as that of 2000 (Japan Institute and zircon. Japan was one of the world’s major exporters of of Labor, 2002§). cement, refined copper, mineral-related chemicals and fertilizers, iodine, electrolytic manganese dioxide, high-purity Government Policies and Programs rare metals, iron and steel, and titanium sponge metal and mill products. As part of the ongoing Government restructuring program to The mining sector was the smallest sector of Japan’s save money and to promote greater efficiency in Government industrial-based economy. According to the Government services, the Government and the ruling three-party coalition statistics on national accounts, the percentage contribution of submitted a bill to the Diet (Japan’s Parliament) in mid-2001 to the mining sector to Japan’s gross domestic product (GDP) was dissolve the Government-run Japan National Oil Corp. (JNOC). only 0.17% in 2000 (the last year for which data are available). The bill also covered privatization of the national oil reserves The percentage contribution to Japan’s GDP by the mineral operations of JNOC-affiliated companies. According to the industry as a whole, which included the mining sector and the proposed plan, JNOC was to be shut down in three steps— mineral processing industries of chemicals, petroleum, dissolution, transfer of assets to a new Government-owned industrial minerals, iron and steel, nonferrous metals, and company, and gradual unloading of JNOC’s shares on the fabricated metal products in the manufacturing sector, however, market (Nikkei Weekly, 2001a). was 6.35% in 2000 (Economic and Social Research Institute, In November 2001, an agreement reportedly was reached 2001§1). between the Ministry of Economy, Trade and Industry (METI) The mineral industry was important to the Japanese economy and the General Council of the Liberal Democratic Party to because of its contribution to the GDP and its vital role in keep the oil corporation’s role as provider of the risk capital for oil and gas exploration; to maintain the national oil reserves 1References with a section twist (§) are found in the Internet References Cited under existing Government-run corporations; to liquidate most section. assets of the corporation, which included equity interests in oil THE MINERAL INDUSTRY OF JAPAN—2001 13.1 developers, through sales and other means and to transfer the manganese, nickel, and platinum in the cobalt-rich manganese rest of the assets to a new entity; and to eliminate the eight crust offshore Marshall Island (Metal Mining Agency of Japan, companies that maintain the national oil reserves and to turn 2002a). over the operations to the private sector. Issues related to The MMAJ continued to provide financial and technical liquidation of JNOC’s equity interests in oil developers and the support, which included geologic and geophysical surveys and transfer of the rest of JNOC’s asset and management of national drilling, to five private Japanese companies in 2001. These oil reserves to another Government-affiliated organization, such overseas exploration projects were for copper and gold by as the Metal Mining Agency of Japan (MMAJ), were to be Mitsubishi Materials Corp. in the Los Dos Buhos Cateo area of clarified in 2002 (Asahi Shimbun, 2001§). Argentina; lead and zinc by Mitsui Metal Mining Co. Ltd. in the The MMAJ, in cooperation with the Japan International Ciquian East area of Peru; nickel by Sumitomo Metal Mining Cooperation Agency (JICA), continued to undertake overseas Co. Ltd. in the Zambales area of the Philippines; copper, gold, mineral exploration projects as part of the Official Development and platinum-group metals by Sumitomo Metal Mining in the Assistance Program (ODA) of the Japanese Government in Tropico area of Mexico; and copper by Nittetsu Mining Co. Ltd. 2001. In response to requests from the Governments of in the Namosi area of Fiji (Metal Mining Agency of Japan, developing countries, the MMAJ provided technical assistance, 2002b). which included the transfer of advanced exploration technology to these Governments, and carried out a broad range of basic Environmental Issues exploration for further exploration and development of their mineral resources. The MMAJ also provided loans and To implement the Government 3R (reduce, reuse, and exploration assistance to support private Japanese companies recycle) policy to achieve the goals of sustainable development and their foreign partners that were involved in joint- in the 21st century and to create a recycling-oriented economy, exploration works overseas. the Japanese Government enacted the Designated Household The MMAJ’s ongoing ODA projects in 2001 included two 2- Appliance Law on April 1, 2001. The law governs the year reconnaissance survey projects, eight 3-year mineral recycling of household appliances, which included air exploration projects, a regional development planning project, conditioners, television sets that use cathode-ray tubes, electric and a deep-sea mineral exploration project. In 2001, the MMAJ refrigerators, and electric washing machines. completed three 3-year (1999-2001) mineral exploration To ensure that these electric appliances are properly recycled, projects that targeted copper, gold, and molybdenum in the law made the manufacturers and importers responsible for porphyry copper and vein-type deposits in the Oruro-Uyuni area recycling; the retailers, for collecting and transporting the of Bolivia, in the Bicol North area of the Philippines, and in appliances for recycling; and the consumers, for paying Region I of Chile and a 3-year (1999-2001) regional recycling fees that ranged from $19.75 (¥2,400) for a washing development planning project that targeted lead and zinc in machine and $22.22 (¥2,700) for a television set to $28.81 Mississippi Valley-type lead-zinc deposits in El Krib and the (¥3,500) for an air conditioner and $37.86 (¥4,600) for a Mejez El Bab areas of Tunisia (Metal Mining Agency of Japan, refrigerator. The law also requires manufacturers or their 2001). designated recycling companies to achieve recycling ratios of In 2001, the purpose of the ongoing two 2-year 50% for refrigerators and washing machines, 55% for television reconnaissance surveys was to explore for copper, gold, lead, sets, and 60% for air conditioners. By April 2001, 190 pick-up and zinc in massive sulfide, porphyry copper, and vein-type centers and 24 recycling plants were in place nationwide for the deposits in the northwestern area of Argentina and copper, manufacturers of electric home appliances to comply with the nickel, and platinum-group metals in magmatic deposits in the new recycling law (Nikkei Weekly, 2001c).