Monday, August 18, 2008

I Me Mine

I was reading in the Sunday edition of the Jōmō Shimbun...

(When I am in the chihō I always pick up the local newspaper. As local papers are only 100 yen, it is hard to regret the purchase. You learn stuff too.)

...that the Ministry of Economics, Trade and Industry has scored a major coup for its clients. In a plan that seems fairly sure to clear the Finance Ministry gauntlet, the Ministry will be funneling financing to companies in order that they may invest in overseas mining projects in pursuit of non-ferrous metals.

I have mixed feelings about this plan. The memory of the vast sums expended and tiny rewards derived from MITI's oil exploration shenanigans should be warning off the bureaucrats from ever, ever attempting strategic resource extraction investments. However, the concentration of the mining of important metals and minerals in countries with real chips on their shoulders - and yes I am speaking about Russia and China -- as well as in countries where Japanese companies find themselves getting shoved aside by a coordinated aid/trade/finance/military sales push from China, pinning one's hopes on "the market" providing Japanese companies with materials at competitive prices seems somewhat naive. Even though the government has a lousy track record, lowering the barriers for companies to invest in the development of reserves in less politically fraught countries seems a least-worst option.

Not being an expert in mining or the resource trade, I find it hard to come to any sort of conclusion on the plan.

Jōmō Electric Railway train crossing the Watarase River
Kiryū City, Gunma Prefecture
August 17, 2008


It was serendipitous to be reading the story as an article in the Jōmō Shimbun whilst on my way to Kiryū. The bulk of northeast Kantō Region's wealth in the 19th and early 20th centuries was generated by the silk trade, centered in Tomioka and Kiryū. However, the area's other major industry was copper mining -- at the giant Ashio copper mine located on the upper reaches of the Watarase River.

Japan apologists have had a bad habit of defending dumb Japanese government and Japanese company decisions on the basis of "as we all know Japan is a resource-poor country." This demonstrates a willfull blindness toward the contributions Japan's gold, silver and copper mines made to the global economy, particularly the use of copper for coins.

Later - Here a Japan Network News article on the METI plan (in J only).

2 comments:

JAM said...

One cannot help but agree with your assessment of the rather scary idea of the ministries trying to "round up" various resources, particularly give their track record.

On the Ashio Mine "bit", there is a lot more to it than that. Not only were various metals (gold, copper, silver) and coal critical and widely -- even voraciously -- exploited during the Edo and Meiji periods, the mining activities from that era (and extending into the Showa, of course) still scar much of the landscape of wide sections of Japan. In Akita, for example, there are whole townships (Now Kita Akita City and Kazuno City, or example) where the mountains are honeycombed with abandoned mines creating a pretty major hazard to anyone wandering about in them. The abandoned mineheads are concrete scars visible for miles. Finally, many of the rivers and streams are in interesting blue/green color because of copper pollution. All of this is in addition to a rather shady history of "labor relations" that seems to have involved various forms of slave labor (Chinese, Korean and "domestic"). Much of Kita Akita City is now sugi plantation (as much as 92% in some townships) but it had the fourth largest population in Akita Prefecture in the first national census in 1920.

Japan obviously did have substantial raw materials and basically exploited them until they were exhausted and now pleads poverty even while folks in many areas of Japan live with the scars.

OperationNorthwoods said...

Japan is going to be in a tricky situation when procuring resources abroad due to the US's strategy of pressuring Russia and China. The Brzezinski approach will probably lead to at least a new Cold War, and possibly more.

This may end up being dramatically rougher for Japan than the last Cold War, which actually benefited Japan.