JOGMEC's approach for critical metals and efforts for stable supply Yoshihiro Kojima JOGMEC Oct 9, 2018
1 Today’s Presentation 1. JOGMEC’s Activity/ Function for Stable Supply on Metals 2. China’s Influence on Global Metal Market from the view point of Japanese Economy
2 Today’s Presentation 1. JOGMEC’s Activity/ Function for Stable Supply on Metals 2. China’s Influence on Global Metal Market from the View Point of Japanese Ecnomy
Natural Resources in Japan 3 • Since Japan has few domestic natural resources, Japan 100% depends on imports for almost all of its Tin 100% crude oil, natural gas, 99.3% non‐ferrous metals Copper and minerals. 99.6% Coal Oil
The Importance of Metals for Japanese Industry 4 In , 48.7% Ga , 44.9% Mo , 16% REE , 14.8% Li , 14.0% • Japan has high‐tech Pt , 13% ※ Pd , 12.8% industries which utilize many ※ Ti , 12.1% ※ Co , 9.9% types of metals; especially Ni , 8% Ge , 7.7% rare metals and REE. Sn , 7.6% V, 7.5% • GDP of Japan is almost 6% in W , 7.3% Nb , 7.1% the world. Most of rare Mg , 4.8% Sb , 4.7% metals are above the Cu , 4.2% ※ Fe , 3.9% percentage. ※ Mn , 3.7% Zn , 3.4% Al , 3.3% Ag , 3.1% Iron, Base metals Pb , 2.5% Rare metals Zr , 2.0% TiO2 , 1.7% Precious metals Au , 1.5% Rare earth elements 0% 10% 20% 30% 40% 50% 60% Source: World Metal Statics 2015(WBMS), Mineral Commodity Summaries 2015(USGS), INDUSTRIAL RARE METALS No.130( アルム出版社 ) Percentage of Consumption : Japan/World (2017)
JOGMEC, Who We Are 5 • Japan Oil, Gas and Metals National Corporation (JOGMEC), an incorporated administrative agency , is established by the Japanese government. • The principal role of JOGMEC is to seek a stable supply of natural resources for Japanese industry as an agency implementing natural resource policies under jurisdiction of METI. Since 1963 Since 1967 Metal Mining Agency of Japan Japan National Oil Corporation (MMAJ) (JNOC) February 2004 Japan Oil, Gas and Metals National Corporation (JOGMEC) Coal & Geothermal units added
Organization of JOGMEC 6 Headquarter: Tokyo • Metals Strategy & Exploration Unit • Metals & Coal Financial and Environment Unit • Stockpile Unit • Oil & Gas Upstream Business Unit • Oil & Gas Upstream Technology Unit • Geothermal Resource Development Dept. Two research centers in Japan • Metals Technology Center • Technology & Research Center (oil and gas) Worldwide network • 13 overseas offices gathering relevant information
Early‐Stage Overseas Exploration 7 • Take early‐stage risks to promote overseas explorations • Program – Typical joint venture style exploration • Farming into an exploration project held by a foreign company, then transferring JOGMEC’s contractual interest to a Japanese company • Target commodities H He – Base metals (Cu, Zn,...) Li Be B C N O F Ne P Na Mg Al Si P S Cl Ar – Rare metals K Ｆｅ K Ca Sc Ti V Cr Mn Fe Co Ni Cu Zn Ga Ge As Se Br Kr Rb Sr Y Zr Nb Mo Tc Ru Rh Pd Ag Cd In Sn Sb Te I Xe (Ni, Co, REE, Li, ...) Cs Ba La Hf Ta W Re Os Ir Pt Au Hg Tl Pb Bi Po At Rn Fr Ra Ac Rf Db Sg Bh Hs Mt Ds Rg La Ce Pr Nd Pm Sm Eu Gd Tb Dy Ho Er Tm Yb Lu Ac Th Pa U Np Pu Am Cm Bk Cf Es Fm Md No Lr
Discovery at Waterberg – for safe and low‐cost operation 8 Waterberg Outline • Exploration started in 2009, Discovery in 2011 • Impala Platinum participated in the project in 2017 • Resources (cut‐off grade 2.5 g/t): [Indicated] 24.8 Miloz 3PGMs+Au [Inferred] 10.8 Miloz 3PGMs+Au • Prill Split : Pd 61%, Pt 30%, Au 8%, Rh 1%+ Cu, Ni
Support Programs for Advanced‐Stage Projects 9 • Financial assistance to Japanese companies for overseas mineral explorations or development projects • Programs – Financing for overseas explorations – Funding part of the equity capital – Guaranteeing the liabilities
Financial Assistance 10 • Sojitz and JOGMEC agreed to provide a total Mt. Weld REE mine of US$ 250M through loan and equity to Lynas’s Mt. Weld REE mine on March 2011. • 8,500 tonnes/year of REE products can be delivered to Japan. • First REE products were shipped in March 2013. JOGMEC Sojitz Investment Japan Australia Rare Earths B.V. Financing (Loan & Equity) Lynas Mount Weld Rare Earths Concentration Plant
Financial Assistance 11 • Japanese group (JFE Steel, Nippon Steel, Sojitz Araxá Niobium mine & JOGMEC) acquire 10% stake in CBMM on March 2011 by investing US$ 1.3B. • CBMM owns Araxá niobium mine, refining plant & metallurgical facilities. • CBMM produces over 80% of global supply. • Reserves of Araxá mine is equivalent to over 200 years of world demand. POSCO NPS JOGMEC Sojitz JFE NSC Investment Japanese SPC Korean SPC 10% 5% CBMM Aerial View of Araxá mine
Re‐evaluation of Criticality Matrix 12 • Refers to EU’s model • Adjusts for Supply Risk Japanese industries • Data used is 2012. • Now updating Economic Importance
13 Today’s Presentation 1. JOGMEC’s Activity/ Function for Stable Supply on Metals 2. China’s Influence on Global Metal Market from the View Point of Japanese Economy
Chinaʼs share in ・In last 10 years, Chinese Cu consumption expanded by 8 million ton. Copper ・On the other hand, ex-China shrunk consumption ・Chinaʼs share is about 50% Refined Cu Consumption kt 25,000 Others 20,000 Russia Italy 15,000 Korea Japan 10,000 Germany USA 5,000 China 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Chinaʼs share in ・In last 10 years, Chinese Zn consumption expanded by 3.5 million ton. Zinc consumption ・On the other hand, ex-China shrunk Zinc Consumption kt 16,000 14,000 Others 12,000 Belugium 10,000 Germany Japan 8,000 India 6,000 Korea 4,000 USA 2,000 China 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Chinaʼs share in ・In last 10 years, Chinese Lead consumption expanded by 2.4 million ton. Lead ・On the other hand, ex-China consumption consumption grew only 800 k ton. Lead Consumption kt 12,000 Others 10,000 Japan 8,000 UK Germany 6,000 Korea India 4,000 USA 2,000 China 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
China’s Share of Base Metal Consumption (2017) Lead Aluminum Refined Copper 【 World 】 11,480Kt （ Pb t ） 【 World 】 59,190Kt 【 World 】 23,460Kt （ Cu t ） 41.3% 53.9% 50.3% Zinc Nickel 【 World 】 14,213Kt （ Zn t ） 【 World 】 1,910Kt （ Ni t ） 49.0% 40.3%
・The peak of total population Maturing China’s Economy and will come in 2030; 1.4billion Society people. ・ But that of working-age Decreasing Working‐age Population population already peaked in million people 2010. 2,000 100% Peak of working‐age 1,800 90% population 1,600 80% 1,400 70% % of working‐age population [RHS] 1,200 60% 1,000 50% 800 40% 600 30% 400 20% 200 10% ‐ 0% 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 age 15‐59 (working‐age population) age 0‐14 age over 60 Source: World Population Prospects, UN, 2015
・Ending one-child policy was too late to stop decreasing working-age China’s Age Pyramid to 2050 population. ・Many people hesitate to have the 2 nd child because of weak social welfare. Age The year of birth
・Cu Refinery capacity in Cu Refinery Capacity in China China expands to 11million ton in 2018 kt 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 25 source: CRU
Summary 21 21 • JOGMEC is a governmental agency seeking to stable supplies of natural resources for Japan. • The impact of China’s growth in metal consumption affect to metal market. • Economic tie between Japan and China is very strong, China’s economic and social change would give effect on Japan’s material industry. • Mine development takes 10 – 15 years, we should imagine future economy/society in the world in order to keep stable supply of metals.
26 Thank you for your attention!! Yoshihiro Kojima Kojima‐yoshihiro@jogmec.go.jp
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