Source: The Wall Street Journal Asia                Date: 06 October, 2010

Japan will cooperate in promoting projects to develop rare-earth minerals in Mongolia as it seeks to diversify sources of materials needed for high-tech products. Japanese Prime Minister Naoto Kan and his Mongolian counterpart  S.Batbold agreed on such cooperation during a meeting in Tokyo on Saturday evening, Japan's foreign ministry said in a release. Japan is heavily dependent on imports from China, which had curbed exports to Japan amid a diplomatic spat.

"Development of mine resources in resource-rich Mongolia will benefit both countries. Our country's research team will launch exploration of rare metals this month," Mr. Kan said. Japan's Economic and Fiscal Policy Minister Banri Kaieda said in a recent interview that Japan should diversify sources by accelerating the development of alternative materials outside China. Japan depends on China for 96% of its rare-earth minerals, while China controls more than 90% of the world's output.

Japan will help Mongolia look for rare-earth minerals and other metals with its technologies under the agreement. Executives from some Japanese companies also attended the meeting, the foreign ministry said, including those from trading companies such as Itochu Corp., Sumitomo Corp., Mitsui & Co. and Mitsubishi Corp.

Rare earths consist of 17 elements such as neodymium, dysprosium and cerium, and are used in the production of high-tech products such as cellphones, digital cameras, flat-panel televisions and hybrid vehicles.