According to The Nikkei Asia, the Japanese government is poised to increase funding for the exploration of rare earth metals, Nikkei has learned, as competition in the sector intensifies amid an accelerating global shift to electric vehicles.
The government is considering lifting the 50% ceiling on government funding for resource exploration projects by the end of this year, sources said. This will allow state-backed Japan Oil, Gas and Metals National Corp. (Jogmec) to shoulder more than half of the costs of exploring and developing natural resource mines, the sources said.
The move, if it goes through, would reduce the private sector's burden in undertaking such projects, which are known to be risky and expensive. The rule change comes amid continued concerns about rare earth supply in Japan. In 2010, China imposed restrictions on rare earth exports to Japan.
Without a steady supply of rare earth metals, government officials worry that Japan's efforts in shifting to cleaner energies could be undermined.
The Ministry of Economy, Trade and Industry, which oversees Jogmec, and the Ministry of Finance, are now looking at changing the role of Jogmec to address economic security concerns.
Still, the government intends to set a limit on the scope of Jogmec's expanded role to the exploration of lithium, cobalt and cerium -- key materials for EV battery production -- as well as neodymium and dysprosium, which are used in the production of drive motors.
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