Tuesday, 28 July 2009
The Japanese take a slightly different approach to the Chinese when it comes to securing raw material supplies. Lacking the bottomless pockets of Chinese firms and slowed by the due diligence and board approval procedures typical of Japanese corporations, they have been repeatedly beaten to the deal by fleeter Chinese rivals.
What the Japanese can offer is deep technical knowledge and the potential for partnership with state of the art high technology industries, an opportunity the Kazakh state owned nuclear specialist Kazatomprom has taken with both hands.
Kazakhstan has a wealth of mineral assets including both metals and hydrocarbons according to the USGS, making it highly attractive to foreign investment. The government has been very open to foreign involvement both in Kazak companies and vice-versa. As intimated above, Kazatomprom for example, holds 10% of Toshiba's US based Westinghouse nuclear power unit and it is Toshiba that is at the center of the current buzz regarding further cooperation according to Reuters.
What Toshiba is really after is Kazakhstan's Rare Earths and Uranium, both for Toshiba's nuclear power programs. The firm is said to be wary of Chinese domination in the Rare Earth field and is prudently developing alternate supply sources for the long term. Kakakhstan is rich in ores bearing beryllium, tantalum and hafnium used in control rods for nuclear reactors and is a major producer of uranium.
No figures are available for Kazakhstan's Rare Earth production but as a major zinc and lead producer with valuable associated RE content, the numbers will be significant. Certainly they have five plants refining columbian, indium, selenium and tellurium. In addition, the country produces rhenium, tantalum, gallium and a host of minor specialist metals, but three quarters of ores are still exported to Russia and 20% to China so western buyers have plenty of catching up to do.
Toshiba's far sighted work in Kazakhstan should be an example for other western firms. China isn't the only Rare Earth source in the world but digging the ore out of the ground is only the beginning. Refining and processing should be activities the west excels in unfortunately the facilities have all too often been closed and require extensive investment and time to re-establish. By offering technical cooperation the west has an edge of the funds available to Chinese companies and the more sophisticated the industry, the more valuable that ability to share technology becomes.
