Former Prime Minister Yukio Hatoyama will lead a delegation to Vietnam to bargain for supplies of rare earth metals and lobby for nuclear and rail contracts, an official in his office said Thursday.
Hatoyama will leave for Vietnam on Friday, said Daisuke Haga, Hatoyama's parliamentary secretary for policy. Nine other officials will join the trade delegation, he said. A meeting is planned with Prime Minister Nguyen Tan Dung on Monday in Hanoi, said a Vietnamese National Assembly official who can't be named because he isn't authorized to speak to the media.
Japan is seeking alternative supplies of rare earth metals after China, which controls more than 90 percent of world supply, cut export quotas of the materials, which are used in Toyota Motor Corp.'s hybrid cars as well as disk drives and batteries. Prime Minister Naoto Kan's government set aside an unspecified amount of money to find new sources of the metals in a stimulus plan on Oct. 8. Nikkei English News reported the rare earth fund may be as much as ¥100 billion.
The delegation will also be lobbying for companies led by Tokyo Electric Power Co. to be awarded a contract to build an atomic power station and for Vietnam to choose Japan's bullet-train technology for its planned high-speed railway network, Haga said. Vietnam in August agreed to seek technical support from Japan to conduct a feasibility study for bullet trains to link major cities.
Japan may have a shortage of about 10,000 tons of rare earths next year, or more than 30 percent of its annual demand, according to Sojitz Corp., a trading house that imports most of the supply.
Toyota Tsusho Corp., a trading company affiliated with Toyota Motor, formed a joint venture with Sojitz and a Vietnamese state-run mining company to import rare earths to Japan from 2012, said Katsutoshi Yokoi, a Tokyo-based spokesman. Showa Denko K.K., the world's second-biggest hard-disk maker, opened a rare-earth plant in Vietnam in May.
"Companies typically stockpile around a half a year's worth of rare earth supply, so they should be OK for now," said Shinya Yamada, a Tokyo-based equity analyst covering manufacturing companies at Credit Suisse Group AG.
"It is possible they might not be able to get anything out of China until the end of this year, and if exports don't resume next year, we will see trade issues involving the World Trade Organization, leading to economic friction," he said.
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