While there is widespread concern over the crisis of the limited availability of energy resources, we must also recognize the seriousness of the problems facing the supply of rare metals due to the fact that most of rare metal deposits are located in extremely limited countries and that development of their substitution is more difficult than in the case of energy, which has several alternatives. Although Japanese manufacturers heavily depend on rare metals, domestic production (especially onshore production) is extremely limited. Below are some of the reasons why issues related to rare metals have become critical.

• Demand
  1. The rapid economic development of countries with massive populations, such as China and India, is increasing demand for rare metals.
  2. The IT revolution, globalization of mass production systems (modularization and low labor costs), and huge amounts of capital that can be freely moved around the world have made a rapid increase in global productivity (i.e., a rapid increase in consumption of natural resources) possible.
  3. Demand has increased for new products that require rare metals, such as EV and HV, because of policies to deal with energy and environmental issues (“green rare metals”).
     


• Supply
  4. An oligopoly for some of the rare metal resources has been created by China and some major mining companies.
  5. The development of new mineral deposits faces longer lead times and higher costs due to resource nationalism and environmental protectionism.
  6. Mining of low-grade deposits, which become necessary as high-grade deposits are depleted, require substantial amounts of energy. With existing technologies and rising energy cost, the usability of low-grade deposits is limited.


• Speculation
  7. Enormous speculative funds are searching for alternative investments that can replace investments in stocks and land. Investment in natural resources is a strong candidate.

Because of the above factors, demand for rare metals will rise continuously with a high probability of a surge in the short term, while a rapid increase in their supply is likely to become more and more difficult.

The prices of many rare metals have declined with the fall in demand due to the recession, which began with the financial crisis in the autumn of 2008. However, the above-mentioned factors have not changed at all. In fact, the prices of some rare metals for which there is a strong oligopoly have not decreased. Tight supply and demand of rare metals can be expected with economic recovery, or with the mere anticipation of a recovery. If the supply of even one type of rare metal becomes limited, the manufacturing of products that use it will be constrained. This could cause major damage to an industry as a whole, particularly if the industry is highly competitive internationally.

The objective of the AIST Rare Metal Task Force is to support Japan's economic security by developing urgently needed technologies that will have a major impact on the entire flow of rare metals , such as resource exploration, technologies to reduce rare-metal consumption, technologies to develop the substitutes for rare metals, and recycling technologies, utilizing AIST's research potential and accumulated technological know-how.