RARE EARTH DIPLOMACY: INDIA AND JAPAN MAKES STRATEGIC PARTNERSHIP TO EXPLORE STAKES IN DEEP-SEA MINING
At a time when the momentum and stakes in exploring sea-bed minerals are gaining ground, the technological innovations in deep-sea exploration in the Indian Ocean region hold immense potential for Indo-Japanese collaboration.
Amid the larger framework of the Indo-Japanese strategic partnership, Tokyo and New Delhi have signed a significant agreement in September 2014 on the commercial contract between Indian Rare Earths Limited (IREL) and Toyota Tsusho Corporation (TTC) for the exploration and production of rare earths and are working towards finalising the commercial contract and commencement of commercial production at the earliest.
Producing almost 95 per cent of the world’s rare earth elements (REEs) until 2011, China continues to restrict exports by means of quotas and export tariffs.
Chinese policies seemingly aim at lowering prices for Chinese firms through which they can obtain an unfair competitive advantage.
When it comes to securing new non-Chinese supplies of rare earth elements, Japan has taken the lead since the September 2010 incident of the Chinese supply embargo of these elements.
In fact, heavy dependency of rare earth imports from China can be gauged from the fact that Japan receives 82 per cent of its rare earth elements from China and for Beijing, rare earth elements being exported to Japan stand at just 40 per cent.
By earmarking a $1.5-billion corpus for developing alternative sources of rare earths, there is an effort to notch up joint venture partnerships to secure supplies of rare earth elements, with Japanese firms backed by the government entering into partnerships including between Sumitomo Corp and the Kazakhstan National Mining Co – Kazatomprom; Toyota Tsusho and Sojitz partnering with Vietnam’s Dong Pao project; Japan Oil, Gas and Metals National Corporation (JOGMEC) partnering with India to explore for REEs and establish a processing facility; and JOGMEC seeking investments in Australia’s Lynas Corporation.
Indo-Japanese collaboration in the field of rare earths holds immense potential in the backdrop that Japan is the second largest consumer of rare earths globally and a vital component of Japanese policy of regional integration has been its ‘rare earths diplomacy initiative’ as part of which, Japan has been the key in building capacities including opening a Rare Earth Research and Technology Transfer Centre in Hanoi, Vietnam.
Moreover, Japan’s Natural Resources and Energy Agency has commissioned Japan Oil, Gas, Metals National Corporation to develop robotic deep-sea mining technology to evacuate minerals.
The primary aim is to stabilise the supply of rare metals used for high-tech equipment.
Deep-sea mining has officially been recognised as a future frontier of scientific research in India.
This explains the recent acquisition of deep-sea exploration ship Samudra Ratnakar from South Korea, equipped with sophisticated deep-sea survey instruments like doppler profilers multi-beam sonars, acoustic positioning systems, marine magnetometers and a marine data management system.
All these provide it with a qualitative edge over other survey ships when it comes to oceanographic research and enable it for an accurate survey of the seabed, and analysis of the excavated material.
India has secured an exploration contract from the International Seabed Authority to mine polymetallic nodules in the Central Indian Ocean over 1,50,000 sq km.
According to an estimate, the total mass of nodules in the area allocated to India in the Indian Ocean region is 380 million metric tonne.
However, the Samudra Ratnakar alone will not be sufficient to find and extract materials and, therefore, India should seriously consider a proposal for deep-sea mining and production technology from Tokyo under the strategic dialogue framework as well as acquisition of more deep sea exploration vessels.
The Industrial Development Corporation of Orissa Limited (IDCOL), and Indian Rare Earth Limited (IREL), operating under the Department of Atomic Energy, have signed an MoU to set up a mineral separation plant in the Ganjam district of Odisha that will undertake Beach Sand mining and mineral processing to produce Limonite, Garnet, Sillimanite, Rutile, Zircon and Monazite.
Moreover, a subsidiary of Japan’s Toyota Tsusho Corporation is already based at Visakhapatnam, Andhra Pradesh, and is involved in the production of REEs while also operating a monazite sand rare earth production base.
Recently, the Indian Rare Earths Ltd has sought clearance for rare earths mining from sand in the coastal stretch of around 2,500 hectares at Brahmagiri (Puri district), and Japanese collaboration in this sphere could prove vital.
Besides, areas identified for deep-sea mining in Japan are the hydrothermal deposits in the Okinawa Trough, northwest of Okinawa Islands, and the Bayonnaise submarine caldera — believed to contain among the world’s richest seabed deposits of gold, silver and rare earth elements.
The economic viability of deep-sea mining has been under the scanner for a while, given that the cost for a single mining site is $1.6 billion and more.
As Japan remains committed to increase R&D investments into material use efficiencies, it is only prudent to argue that joint collaboration between India and Japan in the Indian Ocean to explore and produce rare earths is the way to go forward.
The writer is a Senior Fellow at the Centre for Land Warfare Studies, New Delhi, where she heads the China-study programme