Japanese trading companies step up procurement of mineral resources such as rare metals and copper

According to Japanese media, large Japanese trading houses have begun to step up their procurement of mineral resources such as rare metals and copper. This is due to the fact that such minerals are used in (EV) parts of electric vehicles and renewable energy generation equipment, and demand is expected to expand with decarbonization. Enterprises to promote the protection of rights and interests, want to take the lead in building a stable supply system, the government will also support this trend of Japanese enterprises.

In the context of the expected intensification of the competition for important mineral resources and the confrontation between the United States and China, strengthening the supply chain (spare parts procurement and supply network) has become an important issue in economic security between Japan and the United States. In terms of decarbonization, the Japanese government has greatly raised its greenhouse gas emission reduction target, and the measures taken by the government and the people may be further accelerated.

Mitsubishi Corporation and the British resources giant will jointly promote the development of copper mines in Peru. The local area is the largest untapped mine in the world and aims to start production in 2022. It is estimated that the annual output is about 300000 tons and the total project cost is more than 5 billion US dollars. Mitsubishi has a 40 per cent stake and will strengthen its copper business.

Mitsui has also long been involved in Chile's copper mountain business, which has only a handful of reserves in the world, and acquired an additional interest in March this year. In the field of platinum used as catalysts for exhaust gas purification units, Itochu secured interests in South Africa. With regard to the lithium carbonate used in EV's battery materials, Toyota Trading contributes to the manufacturing business in Argentina and has the exclusive right to sell it.

As the recycling of scarce resources has also become important, Marubeni will cooperate with American companies to officially start the business of recovering and recycling nickel and cobalt from EV waste batteries from 2022.

Trading companies have always regarded the resource business as an important source of income, but it is greatly affected by the market situation, and it has also become the cause of performance deterioration. When strengthening procurement, it may become more important to spread risk while estimating medium-and long-term demand.