Struggling domestic production

In contrast to its high demand for metals and minerals, Japan’s domestic industrial production is almost negligible, and has been collapsing over the last two decades. The country’s Metal Mining Agency (MMA) reported that between 1970 and 2001, the number of operating mines fell from 246 to 14, and the number of people employed in the mining sector fell from 34,000 people to just 405 over this period.

This trend has had a significant impact on the country’s productivity, with the US Geological Survey (USGS) reporting that antimony metal production fell by 84% between 2014 and 2015, and that production had declined consistently since 2011. Production of lead and zinc has struggled in particular, with total production of the minerals falling from 215,044 tons to 194,391 tons, and 66,325 tons to 59,224 tons respectively, between 2011 and 2015.

Declining employment and falling production have contributed to a significant decline in the economic output of the country’s mining sector, with government figures noting that the GDP contribution of mining fell from $2.7bn in 2009 to $1.9bn in 2016.

Iron, steel and iodine

However, there remains potential for future mining developments in the country. Japan has the highest reserves of iodine in the world at five million tons, and is the world’s second-largest producer of the element, behind Chile. Market Research Future predicts that the global iodine market could reach a value of over $1bn by 2023 due to its uses in medicine, so Japan’s strong reserves could be turned into a profitable enterprise in the future.

Production of iron and steel has also remained strong in the last few years, with the USGS reporting that pig iron production has only wavered slightly, falling from 81.03 million tons in 2011 to 81.01 million tons in 2015, while production of both “ordinary” and “special” steels has increased over the same period. While China dominates international steel production, accounting for around half of global output, Japan was the world’s second-largest producer of the metal in 2015, accounting for 6.5% of global production.

Japanese ferroalloy production, alloys of iron with a high concentration of minerals such as manganese or aluminium, has increased dramatically over the period; the USGS reports that production of alloys including chromium, molybdenum, silicon, tungsten and vanadium has more than tripled from 20,913 tons in 2011 to 73,651 tons in 2015.

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Smelting and refining

Japan also boasts a robust smelting and refining sector, importing foreign ore to process and purify for export, an arrangement that ensures Japan remains relevant in the industrial sector without having extensive mining operations. The Toyo smelter and refinery, owned by Sumitomo, is one of the world’s largest copper smelters, importing concentrate from South America, Australia and Asia, and producing around 450,000 tons of copper a year.

This industry has also encouraged international collaboration, with JX Nippon Mining and Metals partnering with LS-Nikko Copper in South Korea to collectively smelt and refine copper. Between them, the companies produce around 920,000 tons of copper a year, making their operations the sixth-largest copper smelting facilities in the world, by annual production. Japan was also the largest exporter of refined copper to India as of October this year, providing 71% of Indian copper imports as India became a net copper importer for the first time in 18 years.

While this industry is relatively specialised, dealing largely with copper and exports to particular markets, it has developed in exactly the manner the MMA expected. In 2002, the agency said that Japan had developed a “large-scale custom smelting sector” and now, nearly two decades on, this specialised sector is beginning to make an international impact.

Regulatory uncertainty

Despite these positives, there is uncertainty regarding the future of Japan’s mining sector. In 2012, the government reformed its mining act for the first time since 1950, effectively tightening restrictions on the ability of the Ministry of Economy, Trade and Industry (METI) to award mining permits. The older legislation enabled the METI to award permits on a first-come-first-served basis, but the new law creates a distinction between “specified minerals”, those deemed critical to the national economy, and other minerals; these specified minerals include commodities such as oil and natural gas, and are given priority over non-specified minerals when the METI awards mining permits. In practice, this could mean Japanese industry focuses on these few priority minerals, ignoring potential long-term mining projects, such as the development and exploitation of the country’s iodine reserves.

The country’s 2018 energy report also shows shifting interests in the sector; while the 2017 edition focused on the new directions of the country’s energy policy, the latest version deals with the reconstruction of the damaged Fukushima plant, and ensuring Japan meets upcoming climate change goals. While the mining industry is not necessarily at odds with either project, the fact that the government is focusing on reconstruction and environmental protection, and not new mining developments, means the country’s mining sector may continue to struggle.

Kamioka Observatory

Much of Japan’s recent struggles can be attributed to the closure of the Kamioka mine in June 2001, one of the country’s largest lead and zinc mines. While the facility is still used to process the metals – producing 33,600 tons of lead and 72,000 tons of zinc a year – the end of production left a significant hole in Japanese mining, which has yet to be filled.

The facility has, however, enjoyed a second life as the home of the Kamioka Observatory, a laboratory operated by the Institute for Cosmic Ray Research at the University of Tokyo, and used to observe neutrinos and gravitational waves. The observatory has seen a number of significant developments in the field of astrophysics, including the first-ever detection of astrophysical neutrinos by Masatoshi Koshiba, who was jointly awarded the Nobel Prize in Physics in 2002 for his work. A second Nobel Prize winner is Takaaki Kajita, who was jointly awarded the 2015 prize for close to two decades of work with the Super Kamiokande, a vast neutrino detection facility at the former mine site.