Japan seeks Australian minerals for electric-car batteries and rare earths

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【Summary】Japan is seeking to acquire battery minerals and rare earths for its electric cars from Australia and Canada, aiming to reduce reliance on China. Japanese officials have engaged in discussions with counterparts in Australia and Canada, citing a shared caution against China. Other countries like South Korea have already pursued access to minerals from these sources. This move comes as the US encourages manufacturing nations to develop supply chains independent of China.

FutureCar Staff Oct 06, 2023 6:21 AM PT

Japan seeks Australian minerals for electric-car batteries and rare earths

Japan is exploring alternative sources for battery minerals and rare earths for its electric cars, aiming to reduce its reliance on China. According to Nikkei Asia, Japanese government ministers have been in talks with officials from Australia and Canada, as the US urges manufacturing nations to establish supply chains that are not dependent on China.

A Japanese official stated that Australia and Canada are seen as ideal partners because they share similar concerns about China. In June, representatives from Japan visited Australian officials, and last month, Japan's trade minister and representatives from major battery companies held a meeting in Canada – the first of its kind in a decade.

While Japan is pursuing these partnerships, other manufacturing countries like South Korea have already taken steps to secure minerals from Australia and Canada. Despite Australia being home to over half of the world's lithium reserves, the majority of lithium materials are refined and processed in China, according to the International Energy Agency.

In May 2023, the US Government redefined Australian mining companies as "domestic" suppliers, allowing them to receive funding under the US Defence Production Act. Additionally, US authorities offer a tax credit of $US7500 ($AU11,770) to local electric car buyers, but only if the battery materials are sourced from the US or its allies and the battery itself is manufactured in North America.

These efforts by Japan, the US, and other countries highlight the growing concern about China's dominance in the supply chain of critical minerals and rare earths. By diversifying their sources and reducing reliance on China, these countries aim to strengthen their own manufacturing capabilities in the electric car industry.

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