The Volatility of Japan's mining sector

By Apac CIO Outlook | Friday, January 24, 2020

Kamioka Observatory, one of the country's largest lead and zinc mines, closed down in June 2001, leaving a large gap in the Japanese mining sector.

FERMONT, CA: Japan's mining industry lost its importance during the 1980s, when lion share of the county’s natural mineral resources started depleting at a breathtaking pace. The country now depends on imported energy and raw materials. Despite the decline of the industry, there might still be hope for its revival. Japan is the second-largest producer of iodine, and at 5 million tons, it has the highest reserves of the element in the world. There is also a significant rise in the production of iron and steel. In addition to it, Japan prides itself on a strong smelting and refining sector, which is making an international impact and putting the country in a prominent position on the industrial scale.

However, regulatory concerns arise due to the fact that the government, after revising its mining act in 2012, immediately put a restriction on the power of granting mining permits by the Ministry of Economy, Trade and Industry (METI), leading to a hazy future for the sector. The new law differentiates between specified minerals (critical to the national economy, oil, and natural gas) and non-specified minerals. The non-specified minerals are preferred more, which would mean that there would be no long term mining projects like that of the iodine reserves but given more attention to the preferential minerals. The government's concern is also on the rebuilding and restoration of the damaged Fukushima plant and following through with the environmental protection goals. With these in agenda, the mining sector might still face more challenges ahead.

The instance of Kamioka Observatory, one of the country's largest lead and zinc mines, closed down in June 2001, leaving a considerable gap in the Japanese mining sector. The facility now functions as a laboratory to observe neutrinos and gravitational waves and has witnessed several important advancements in the field of astrophysics.