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UNCLAS SECTION 01 OF 10 TOKYO 002788 
 
SIPDIS 
 
DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; 
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; 
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; 
SECDEF FOR JCS-J-5/JAPAN, 
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA 
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; 
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. 
 
E.O. 12958: N/A 
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 12/07/09 
 
INDEX: 
AMERICAN EMBASSY, TOKYO 
PUBLIC AFFAIRS SECTION 
OFFICE OF TRANSLATION AND MEDIA ANALYSIS 
INTERNET E-MAIL ADDRESS: otmatokyo@state.gov 
DAILY SUMMARY OF JAPANESE PRESS 
December 7, 2009 
 
INDEX: 
 
(1) PM Hatoyama to tell U.S. his final decision on Futenma 
relocation "shortly" (Mainichi) 
 
(2) Parliamentary Secretary of Defense Nagashima suggests need to 
send PM's special envoy to U.S. on Futenma issue (Sankei) 
 
(3) Ambassador Roos tells Japan "Washington is furious" with 
decision to delay Futenma relocation solution to next year 
(Mainichi) 
 
(4) Ambassador Roos points out closeness of Japanese, U.S. corporate 
culture (Nikkei) 
 
(5) MOFA begins seriously examining secret nuclear accord; 
Encounters difficulty in handling security policy; Three nonnuclear 
principles' conformity with nuclear umbrella to become issue 
(Nikkei) 
 
(6) Japanese-flag oil suppliers set to fight all-out battle in 
Iraq's 2nd round of oil deals on Dec 11-12 (Sankei) 
 
(7) Rare metal: Public and private sectors frantic about securing 
stable supply (Tokyo Shimbun) 
 
ARTICLES: 
 
(1) PM Hatoyama to tell U.S. his final decision on Futenma 
relocation "shortly" 
 
MAINICHI (Page 1) (Full) 
Evening, December 7, 2009 
 
Rumu Yamada, Daisuke Kondo 
 
In connection with the issue of the relocation o the U.S. forces' 
Futenma Air Station (in Ginowan City, Okinawa), Prime Minister Yukio 
Hatoyama stated on the morning of Dec. 7: "I think it is time to 
finalize how we should tell the U.S. about the government's 
thinking," indicating his intention to convey to the U.S. the 
government's decision at an early date. He made this statement to 
reporters in front of his official residential quarters. 
 
When reporters asked him if the above statement is premised on a 
solution before the end of the year, he refrained from giving an 
explicit answer, but said: "I think it is time to decide what to say 
right now, taking everything into account." 
 
With regard to the U.S. side's demand regarding the existing plan to 
relocate Futenma to the coastal area of Camp Schwab (in Nago City), 
Hatoyama said: "We are also a coalition government, and the people 
of Okinawa have different expectations. It will not be so easy." 
 
 
TOKYO 00002788  002 OF 010 
 
 
Commenting on the Prime Minister's remarks at his news conference on 
the morning of the same day, Chief Cabinet Secretary Hirofumi Hirano 
said: "He probably meant that regardless of the substance (of the 
conclusion), the government needs to decide on how it intends to 
handle the Futenma issue." He added, "This probably meant that it is 
time to sort things out squarely and indicate a policy direction, 
including whether this will be acceptable to the U.S. and the 
Okinawan people." 
 
Meanwhile, at a meeting of the secretaries general and Diet Affairs 
Committee chairmen of the Democratic Party of Japan (DPJ), the 
Social Democratic Party (SDP), and the People's New Party on the 
morning of Dec. 7, SDP Secretary General Yasumasa Shigeno asked that 
the ruling parties step up their efforts to appeal to the government 
from the standpoint of opposing the existing plan for Futenma 
relocation. DPJ Secretary General Ichiro Ozawa said he would convey 
this to the government. 
 
(2) Parliamentary Secretary of Defense Nagashima suggests need to 
send PM's special envoy to U.S. on Futenma issue 
 
SANKEI ONLINE (Full) 
12:13, December 7, 2009 
 
The Dec. 7 issue of the South Korean newspaper Chosun Ilbo carried 
an interview with Parliamentary Secretary of Defense Akihisa 
Nagashima in which Nagashima reportedly said that in light of the 
difficulties in reaching a solution on the issue of the relocation 
of the U.S. forces Futenma Air Station (in Ginowan City, Okinawa), 
there is a need to show consideration by sending a special envoy 
carrying a personal letter from Prime Minister Yukio Hatoyama to the 
U.S., for instance. 
 
According to Chosun Ilbo, Nagashima pointed out that the Japan-U.S. 
relationship "is on the verge of a crisis in the short term." He 
said that it is necessary to convey Japan's thinking to the White 
House at an early date and cited Foreign Minister Katsuya Okada as a 
possible special envoy. 
 
Nagashima also explained that since the 50th anniversary of the 
revision of the Japan-U.S. security treaty is approaching next year, 
President Barack Obama is expected to visit Japan by next November. 
He said that the government will make a decision by next fall at the 
latest. (Kyodo) 
 
(3) Ambassador Roos tells Japan "Washington is furious" with 
decision to delay Futenma relocation solution to next year 
 
MAINICHI (Pages 1, 3) (Full) 
December 7, 2009 
 
Japan informed the U.S. side that it intends to defer a decision on 
the issue of the relocation of the U.S. forces' Futenma Air Station 
(in Ginowan City, Okinawa) to next year at the meeting of the 
cabinet-level working group on Dec. 4. U.S. Ambassador to Japan John 
Roos asked the other participants in the meeting to leave the room 
and drew near to Foreign Minister Katsuya Okada and Defense Minister 
Toshimi Kitazawa. 
 
"Washington is furious. Didn't Prime Minister Yukio Hatoyama tell 
President Obama 'trust me' at the Japan-U.S. summit in November? Why 
have things come to this? If things go on like this (and the current 
 
TOKYO 00002788  003 OF 010 
 
 
relocation plan does not move forward), Futenma will remain where it 
is." 
 
The postponement of the decision came as a total surprise to the 
U.S. side. The fact that Okada and Kitazawa had expressed their 
intention to find a solution before the end of this year also turned 
out to be an act of deceiving the U.S. Hatoyama has also asked for 
considering "new relocation sites." Okada stated at his news 
conference on Dec. 5 that "the situation is such that it will be 
very difficult to hold the working group's meetings," expressing his 
concern that the examination process may be stalled. 
 
The Prime Minister's side had envisioned a two-stage scenario: 
making a decision based on the existing plan with minor 
modifications before year end and presenting a blueprint for the 
relocation of the Futenma base out of Okinawa in the future. The 
U.S. side had also been sounded out on this. Kiyoshi Sugawa, special 
researcher of the Cabinet Secretariat who is close to Hatoyama, was 
dispatched to the bureau chief level talks on the Futenma relocation 
issue in Washington on Nov. 24. He held meetings with senior U.S. 
government officials separate from the bureau chiefs. 
 
Japan Research Institute Honorary Chairman Jitsuro Terashima, who is 
known to be Hatoyama's foreign policy adviser, engaged in prior 
consultations with the Prime Minister and visited the U.S. from Nov. 
28 through the intercession of the U.S. Embassy in Tokyo. However, 
the U.S. side repeated its position that "anything other than the 
current plan is unacceptable." There was no room for compromise. 
 
The Prime Minister realized the severe attitude on the U.S. side, 
but he made use of (the opposition of the) Social Democratic Party 
(SDP) instead to revese the trend toward settling the issue before 
year end. On Dec. 4, he emphasized to reporters that "I have never 
said when (a decision will be made)," laying the groundwork for 
postponing the decision to next year. 
 
According to a senior government official, the U.S. side has 
conveyed to the prime minister's office the message that "the timing 
of the conclusion is not the issue," "the conclusion needs to be the 
current plan." There is a gap between this and Hatoyama's intention 
to consider relocation out of Okinawa or out of Japan. His close 
aides reveal that "the SDP is being used as an excuse; what he 
really has in mind is to postpone the decision to after the House of 
Councillors election, since no potential relocation site can be 
found outside of Okinawa." 
 
The reason why Hatoyama is persisting with relocation out of Okinawa 
or out of Japan is his desire to review the Japan-U.S. alliance to 
coincide with the 50th anniversary of the revision of the Japan-U.S. 
security treaty next year. He is keen on making a comprehensive 
review of the bilateral alliance, including the major issues of 
omoiyari yosan (the so-called "sympathy budget" or host nation 
support), the Japan-U.S. Status of Forces Agreement, and the Futenma 
issue. 
 
It is said that "security without the permanent stationing of 
troops," a proposal included in the basic policies of the old 
Democratic Party of Japan (before its merger with Ichiro Ozawa's 
Liberal Party) in 1996 was the product of discussions with senior 
Okinawa officials who were then lobbying the Tokyo government for 
the return of U.S. military bases in the prefecture in stages. This 
idea still underlies Hatoyama's thinking today. The above Japanese 
 
TOKYO 00002788  004 OF 010 
 
 
official laments that "probably, the only option is for the Prime 
Minister to visit the U.S. before the end of this year to give an 
explanation." 
 
What made Hatoyama decide to defer the solution to the Futenma issue 
to next year was the SDP's pressure on him to do so by threatening 
to leave the coalition government. 
 
On the afternoon of Dec 1, the SDP's Senior Vice Minister for Land, 
Infrastructure, Transport, and Tourism Kiyomi Tsujimoto and policy 
chief Tomoko Abe grabbed Chief Cabinet Secretary Hirofumi Hirano and 
Okada, respectively, at the House of Representatives plenary hall 
and told them: "If you betray the SDP and the Okinawan people and 
make a decision based on the existing plan, we will bolt from the 
coalition. Then not one bill will pass the House of Councillors from 
the regular Diet session." They warned Hirano and Okada that if a 
decision is made to relocate the Futenma base under the existing 
plan before year end, the Hatoyama administration will be untenable. 
Tension rose at the office of the DPJ's Diet Affairs Committee when 
they heard about this. Diet Affairs Committee Chairman Kenji Yamaoka 
blustered at the top political officials of the Ministry of Defense 
(MOD): "A decision before year end is absolutely unacceptable." 
 
Hatoyama had met with Okada, Hirano, and Kitazawa at the prime 
minister's office earlier, telling them his intention to "attach 
importance to the coalition." Okada and Hirano had no choice but to 
accept the SDP's demand. 
 
Tsujimoto and Abe's action was a result of a request from Lower 
House member Kantoku Teruya (second district of Okinawa), who got 
wind of the top-secret meeting (on Nov. 27) between Hatoyama and 
Okinawa Governor Hirokazu Nakaima, who favors a solution based on 
the current plan with minor modifications. Teruya had asked them to 
put a stop to a seeking a solution before year end. 
 
DPJ Secretary General Ichiro Ozawa, who is said to give priority to 
the coalition, sent out a signal on Nov. 25. Some time past 4:00 
p.m., Okada, who had a one-on-one meeting with Ozawa at the 
secretary general's office in the Diet for about 20 minutes, emerged 
with a sullen expression. 
 
Okada had been working for a solution based on the current plan 
before the end of 2009. Realizing that this would affect the ruling 
coalition, he wanted to give an explanation to Ozawa in advance. 
According to his aides, Ozawa told him in no uncertain terms that 
"the coalition is important." 
 
Meanwhile, Kitazawa, who had hinted strongly at keeping in step with 
Okada to work for a decision before year end, also began to change 
his position. Kitazawa had been saying previously: "I have sorted 
this out with Ms. Fukushima (SDP leader Mizuho Fukushima). The SDP 
will not leave the coalition." 
 
However, his meeting with Azuma Koshiishi, chair of the DPJ caucus 
in the Upper House and a close confidant of Ozawa, on Nov. 30 became 
the turning point. He began to tell his aides that from the way 
Koshiishi was expressing concern about the steering of the Upper 
House, "coordination between the cabinet and Mr. Ozawa has not been 
carried out." 
 
On Dec. 2, Kitazawa shifted to giving importance to the coalition in 
a speech to the National Defense Academy, which trains Self-Defense 
 
TOKYO 00002788  005 OF 010 
 
 
Forces officers. He said: "Is ruining the coalition and triggering 
political confusion in Japan's interest? I don't think the 
Japan-U.S. relationship will be excessively strained if a decision 
is deferred to next year." 
 
On the same evening, a party to celebrate the appointment of 
Kitazawa and State Minister for Financial Affairs and Postal Reform 
Shizuka Kamei to the cabinet was held at a condominium in Tokyo. 
Kamei, who supports the SDP on the Futenma issue, warned Kitazawa on 
this issue: "Do not make a decision before year end." 
 
This began Kitazawa's shift toward deferring the decision. He began 
saying: "We will earmark budget allocations related to Futenma in 
order to show good faith to the U.S." and "I will visit Guam (the 
relocation site of U.S. Marines in Okinawa) to show the SDP that we 
are looking for relocations sites out of Okinawa." 
 
With the decision being deferred, Okada is now forced into a corner 
since up to the end he had advocated reaching a solution before the 
close of 2009. According to a senior MOD official, Okada was the 
only one who disagreed with the decision to defer the solution at 
the meeting among Hatoyama, Hirano, Okada, and Kitazawa at the prime 
minister's office on Dec. 3. Together with Kitazawa, he had led the 
push for a solution before year end, and for a while, Hatoyama was 
moving toward making a decision in 2009, but they pulled the rug 
from under his feet at the last minute. 
 
Relations between Hatoyama and Okada had been strained for a while. 
When Okada mentioned in mid-September a solution before year end, 
Hatoyama reportedly expressed displeasure: "Why are you saying 
something like that?" It seemed to Hatoyama that Okada's policy 
would narrow down the options in the negotiations with the U.S. 
 
Meanwhile, Okada referred to media reporting about Hatoyama's order 
to look for new relocation sites at an informal cabinet meeting on 
Dec. 4 and retorted that "no such instruction was given." For Okada, 
who is at the forefront of negotiations with the U.S., such an 
"order" will imperil the existing relocation plan and the premise of 
the re-examination process itself will become untenable. He had to 
explain at the bilateral cabinet-level working group meeting on Dec. 
4 that "the Prime Minister issued instructions to engage in serious 
debate." 
 
Okada's aides lament that they "have told him many times to discuss 
the coalition issue with the Prime Minister thoroughly, but this has 
not been done." 
 
Not only is Japan not keeping pace with the U.S. on the Futenma 
issue, it is expanding the debate further, thus intensifying a 
confrontational policy toward the U.S. The SDP's Tsujimoto and Abe, 
who pressed the government to give up on making a decision before 
year end, are now saying with great enthusiasm: "We will suggest 
relocation to Guam to the Prime Minister" and have indeed conveyed 
this message to the Prime Minister's aides. Teruya reckons that "the 
Prime Minister is now thinking seriously about relocation to Guam." 
Some administration officials are now talking about the Kansai 
Airport as a possible relocation site. The Ministry of Foreign 
Affairs says: "We wish the SDP would take care of the negotiations 
with the U.S." 
 
When Okada visited Okinawa on Dec. 5, he explained that the U.S. 
position is that "Futenma relocation cannot be realized unless the 
 
TOKYO 00002788  006 OF 010 
 
 
current plan is implemented." He told the audience about his 
difficult position of "being forced to make a decision under this 
dilemma in the Japan-U.S. relationship," but he was jeered by the 
crowd at the meeting in Nago City, which has been identified as the 
relocation site. He was told to find a relocation site outside of 
Okinawa even if this will take time. 
 
(4) Ambassador Roos points out closeness of Japanese, U.S. corporate 
culture 
 
NIKKEI (Page 6) (Full) 
December 5, 2009 
 
U.S. Ambassador to Japan John Roos delivered a speech at a meeting 
of the Japan Institute of International Affairs in Tokyo on Dec. 4. 
Discussing Japan-U.S. economic relations, Roos pointed out that 
"Americans think of Honda, Toyota, and Sony almost as American 
companies, while, on the other hand, McDonald's and Starbucks in 
Japan are very Japanese." He emphasized that the corporate cultures 
in the two countries are closely linked. 
 
Looking back on the 100 days since he took up his post in August, 
the Ambassador also said: "I am fascinated by Japanese culture. I'm 
fascinated by the temples in Kyoto, the tea ceremony in Tokyo, and 
the challenging Japanese language lessons." 
 
(5) MOFA begins seriously examining secret nuclear accord; 
Encounters difficulty in handling security policy; Three nonnuclear 
principles' conformity with nuclear umbrella to become issue 
 
NIKKEI (Page 2) (Full) 
December 7, 2009 
 
The expert panel set up by Foreign Minister Katsuya Okada to shed 
light on Japan-U.S. secret agreements, including one allowing the 
U.S. to bring nuclear arms into Japan, held its second meeting at 
the Ministry of Foreign Affairs (MOFA) on Dec. 6. With this, MOFA 
has shifted its work of examining the secret accords into full gear. 
The advisory panel will postpone a study of measures for security 
policy after the disclosure of the secret deals such as how to 
ensure the consistency of Japan's three nonnuclear principles' with 
the U.S. nuclear umbrella. Some members of the government are 
concerned about this examination creating a new source of turmoil in 
Japan-U.S. relations. 
 
Since its inauguration on Nov. 27, the committee members have been 
individually examining diplomatic documents subject to the 
examination at MOFA. In yesterday's meeting, the panel members 
apparently reported on the current status of the examination and 
confirmed how they plan to proceed with it. 
 
The panel is expected to wrap up its examination at the end of 
January next year. "We will have to work quickly or we won't be able 
to finish on time," said one panel member. The panel intends to 
forge ahead in its examination of documents such as declassified 
U.S. documents, the analysis of which has been done by Osaka 
University Prof. Kazuya Sakamoto, who is well versed in the revision 
of the U.S.-Japan Security Treaty, and Hosei University Prof. Yasuko 
Kono, who is well acquainted with the Japan-U.S. negotiations on the 
reversion of Okinawa to Japanese administration. 
 
As the examination progresses, MOFA officials have been talking 
 
TOKYO 00002788  007 OF 010 
 
 
frequently about how to respond to the envisaged security policies 
of Japan and the U.S. after the disclosure of the secret accords. 
 
For instance, if it is confirmed that there is a secret agreement 
that stipulates that port calls and transit through territorial 
waters by U.S. vessels carrying nuclear weapons are not considered 
to be the introduction of nuclear weapons into Japan, and that they 
are excluded from being subject to Japan-U.S. prior consultations, 
the possibility will become stronger that the three nonnuclear 
principles - the policy of not possessing, not producing, and not 
allowing the transit of nuclear weapons - has been violated, 
admitting port calls and passages without prior consultations. 
 
The government will be pressed to make a decision on whether to ease 
the nonnuclear principles and exclude port calls and transit from 
being subject to consultations, or to uphold them in principle. 
 
If it is true that there is a secret agreement that the U.S. 
military can use the U.S. bases in Japan freely without prior 
consultations in the event of a contingency involving the Korean 
Peninsula, the government will have to decide on whether to ask the 
U.S. side for a review. 
 
Many MOFA officials have said that the ministry should discuss the 
issue with the U.S. side before disclosing a report on the secret 
deals. This is because "there are some documents that cannot be 
disclosed based on the Japanese side's decision alone," said a 
senior MOFA official. 
 
However, Okada has not made any announcement about the examination 
of ex post facto measures up until now. When asked by reporters 
about how the government will deal with the fact that former bureau 
chief Bunroku Yoshino testified that Tokyo and Washington concluded 
a secret accord that Japan would shoulder costs for the reversion of 
Okinawa to Japan, the foreign minister reiterated that he would wait 
for the conclusion of the expert panel. A senior MOFA official 
explained, "The foreign minister's judgment is that if the ministry 
starts looking into ex post facto measures, the force of shedding 
light on the truth will be weakened." 
 
Yet, if the government does not determine its response, it will not 
be able to hold talks with the U.S. side. A high-level U.S. 
government official said, "It is inevitable that there will be a 
negative impact on the Japan-U.S. alliance if the work of resolving 
the issue is moved forward alone." Some government officials are 
starting to make comments, saying that if Japan deals with the 
secret deal issue improperly, the impact will be felt not only on 
the Futenma relocation issue but also on other areas of the 
Japan-U.S. alliance. 
 
(6) Japanese-flag oil suppliers set to fight all-out battle in 
Iraq's 2nd round of oil deals on Dec 11-12 
 
SANKEI (Page 10) (Excerpts) 
December 7, 2009 
 
Sumiko Uehara 
 
Iraq will conduct a second round of tenders on Dec. 11-12 to tap its 
oilfields. For resource-poor Japan, winning contracts to 
independently develop oilfields is a long-cherished desire. But in 
the first bidding held in June, contracts were awarded to Chinese 
 
TOKYO 00002788  008 OF 010 
 
 
corporations and global oil majors in the United States and Europe. 
Although Japan has had an eye, from early on, on the second round of 
deals, including huge oilfields, Japanese oil suppliers have many 
rivals. 
 
Iraq has the world's third largest oil reserves after Saudi Arabia 
and Iran. Large quantities of crude oil lie in 10 oilfields in Iraq, 
including Majnoon, West Qurna, and East Baghdad, for which the 
auction will be held. 
 
A fierce battle is already underway between the alliance composed of 
Russia's Lukoil and the U.S.'s ConocoPhillips and the U.S.'s Exxon 
Mobile over the Qurna oilfield, which has an estimated 15 billion 
barrels of oil reserves. 
 
Six Japanese companies, including INPEX and JAPEX, also have bidding 
qualifications. But they are clearly inferior to the 
Lukoil-ConocoPhillips alliance and Exxon Mobile. 
 
"Japanese companies have little experience in developing and 
managing oilfields, so they will have to tie up with major European 
and U.S. oil companies," a senior Economy, Trade, and Industry 
Ministry official explained. 
 
JAPEX, the only Japanese oil company that took part in the first 
round of biddings, plans to team up with Malaysia's Petronas, as in 
the first round, to aim at winning the rights to develop the Gharaf 
oilfield. Armed with its joint research with the Iraqi oil ministry 
since 2005, JAPEX is poised to turn the tables. At the same time, 
there is some skepticism about whether the company can demonstrate 
its initiative in the alliance. 
 
China National Petroleum Corporation (CNPC) successfully obtained 
the rights to develop the Rumaila oilfield by teaming up with the 
UK's BP. In October, major European and U.S. oil companies 
successfully concluded talks on the As Zubail and West Qurna 
oilfields. 
 
"Although the possible postponement of the general election, set for 
next January, is being talked about, the major oil companies made 
compromises in the amounts of money they will pay," a source 
familiar with the matter said. Japanese companies cannot compete 
with them in the ability to provide capital, conduct negotiations, 
and gather information. 
 
Even so, the Iraqi side pins great hopes on investment from Japan. 
 
Al-Gadban, chairman of the council of advisers to the Iraqi prime 
minister, visited Japan to attend an Iraq investment seminar, held 
in Tokyo on Nov. 11. "European and U.S. majors have already opened 
their offices in Basra and other cities, and the Iraqi side is 
offering a range of benefits to them," Gadban said in his opening 
speech at the seminar. "If Japanese companies also branch out to 
Iraq, we are planning to offer similar benefits." 
 
Japan's official development assistance (ODA) to Iraq has topped 5 
billion dollars, or 435 billion yen - the second largest after the 
United States. 
 
Iraq is aiming to increase its daily crude oil output from the 
current 2.4 million barrels to 6 million barrels in steps. Japan has 
provided Iraq with ODA for the restoration of crude oil export bases 
 
TOKYO 00002788  009 OF 010 
 
 
that are essential for achieving that goal. Japan's level of 
contribution to the postwar reconstruction of Iraq is high. 
 
Joint efforts by the government and the private sector are bearing 
fruit in the Nassiriya oilfield. Having reached an agreement on a 
private tender separate from the first and second biddings, the 
consortium composed of ENEOS, INPEX, and JCG is holding talks with 
the Iraqi side to finalize a deal. 
 
Estimated to produce 600,000 barrels of crude oil a day, the 
Nassiriya oilfield can become the largest ever Japanese-flag 
oilfield. The plan is for Japan to import half of it and to refine 
the remaining half at the oil factory to be built to ship it to 
Iraq. 
 
Although Japan competed fiercely with Italy's ENI, a framework to 
raise nearly 1 trillion yen for building power plants in addition to 
the oil factory, in which the Japan Bank for International 
Cooperation (JBIC) will also participate, won a positive 
assessment. 
 
Japan independently developed only 11 percent of the crude oil it 
imported in 2007. The government's assistance is likely to be the 
key to raising the rate to 40 percent. 
 
(7) Rare metal: Public and private sectors frantic about securing 
stable supply 
 
TOKYO SHIMBUN (Page 3) (Excerpts) 
December 6, 2009 
 
Rare metals, which are indispensable for manufacturing environment 
and information technology-related products, are drawing attention. 
This is because a brisk demand for liquid crystal television sets, 
cell phones and the next-generation automobiles are expected. Major 
production areas are unevenly distributed -- China and South Africa. 
Global competition to secure rare metals is becoming increasingly 
fierce. Japan depends on imports for most of rare metals it 
consumes. Both the public and private sectors have started moving 
forward to secure stable supplies of rare metals. 
 
Supply and demand 
 
The Ministry of Economy, Trade and Industry (METI) in early November 
launched a next-generation automobile strategy study group. Since it 
is impossible to produce eco-vehicles without using rare metals, how 
to secure stable supplies of rare metals took center stage at the 
panel meeting. 
 
Strong magnets blended with rare earths are used for hybrid cars and 
electric cars. Lithium batteries are fitted to them. Platinum is 
used as a catalyst to purify exhaust gas. 
 
Rare metals are also used for crystal display television sets, 
solar-power generation panels, LED bulbs and vibrators for cell 
phones. They are now indispensable materials. 
 
The problem is that areas of production are unevenly distributed. 
China accounts for 97 percent of rare earth production in the world. 
It also has overwhelming shares in the production of tungsten and 
indium. South Africa produces 77 percent of the production of 
platinum in the world. It is the world's greatest producer of 
 
TOKYO 00002788  010 OF 010 
 
 
vanadium. 
 
Struggle 
 
The depletion of rare metals could lead to a matter of life and 
death for Japan's industry circles. The rumor that China will ban 
exports of rare earths went around in related industries this 
summer, sending a shockwave, according to a senior METI official. 
When METI asked China whether the rumor was true or not through a 
diplomatic channel, China replied, "We are not thinking about that 
at present." The frenzy died down. However, the incident fueled 
uneasiness about the future supply of the materials. 
 
Research to find alternative materials is being carried out. 
However, there is a long way to go before the commercialization of 
alternative materials. The New Energy and Industrial Technology 
Development Organization (NEDO) and private companies are jointly 
conducting research into using zinc instead of indium and a chemical 
compound of carbon and nitrogen instead of platinum. However, they 
have yet to achieve stable performance. 
 
Fruits 
 
In the meantime, successful examples for securing rare metals abroad 
have begun appearing. Sumitomo Corporation in August reached a basic 
agreement with Kazakhstan's state-run company for a project to 
obtain rare earths from uranium ore sediments. They will start 
production as early as the end of 2010. Japan Oil, Gas, Metals 
National Corporation (JOGMEC) will help finance the project. 
 
Another successful example of efforts having borne fruit is an 
exploration contract JOGMEC signed in Botswana. JOBMEC in July last 
year set up a remote geological sensing center and gives instruction 
in technology using a satellite to explore deposits to engineers in 
that nation and its neighbors. The aim was to facilitate Japanese 
companies' entry when (Japan) develops mines there, according to a 
senior METI official. 
 
ROOS