Japan is planning to ramp up government control over strategic reserves of 34 "rare metals" and increase inventories of some strategically important metals such as cobalt, as part of measures to address potential supply risks from geopolitical instability or future pandemics.
The country's trade and industry ministry (Meti) has detailed a proposal to revamp its national stockpiling programme as part of a national energy and resource security strategy, following recommendations last year.
The Covid-19 pandemic has since exposed the risk of disruption at every stage of the supply chain, particularly for rare metals for which output and supply is dominated by a few countries.
Meti's draft proposal calls for the government to take full control of strategic rare metals reserves by setting target levels for stocks, as well as plans for procurement and the release of supplies from the reserve. It also urged more flexibility in determining inventory levels for each rare metal, after taking into account their strategic importance, geopolitical risks and domestic demand.
Neither inventory targets nor actual stockpile levels should be made public, given national security considerations, Meti said.
Japan has designated 34 "rare metals" - including rare earths - as having the potential for stockpiling and currently holds reserves of seven — nickel, chrome, tungsten, cobalt, molybdenum, manganese and vanadium. The stocks can cover 60 days of the country's consumption, after including non-obligatory privately-held stocks equivalent to 18 days of consumption. The strategic reserves are defined as being the property of state-owned agency Jogmec and are managed by the agency in its storage bases.
Supply fears driven by the Covid-19 pandemic have underscored the growing need for Japan to take better control of rare metals reserves. Cobalt supplies from the Democratic Republic of Congo have come under threat since late March because of sporadic lockdown measures to combat the coronavirus.
Australian-based Orocobre partially attributed an 11pc year-on-year drop in January-March lithium output at its plant in Argentina to Covid-19 lockdown measures.
