1 The Bilateral Relationship between Japan and Latin America in Non Ferrous Metals JOINT STUDY GROUPS SEMINAR 7 th October 2015 Naoki Kasuya Deputy General Manager, JOGMEC London Office History of Mining in Japan 2 More than 1,300 years ago (a.c. 698), the first copper mine opened in Japan. Japan had the world largest silver mine called Iwami, produced 1/3 of world silver in the 17 century. Japan has accumulated good technology, expertise and legislative scheme (i.e. regulations on mine pollution prevention). Silver Chogin Oval Shaped Coins (Bunroku Sekishu chogin, Otoriosame chogin, Gokuyo chogin) "Map of Tartatia" (1570) Abraham Orterius Drew An area of Japan is indicated as "Minas de plata" (Silver Mine) source : Shimane Prefectural Government 1
Japanese Presence on Usage of Metals in the world Japan is the 3 rd largest economy in the world, mainly strengthened by our high tech manufacturing industries. 3 Japan is one of the biggest users of mineral resources in the world (B US$) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 United States China Japan Germany France United Kingdom GDP Top 6 Countries Indium('09) Gallium Total REO('10) Cobalt Molybdenum Palladium Platinum Silver Titanium Lithium Tungsten Niobium Nickel Vanadium Tin Magnesium Copper Iron Aluminum Gold Zinc Lead Zirconium Japan s usage ratio of world metals (2012) 25.1% 20.0% 17.7% 14.2% 14.2% 14.1% 12.6% 12.3% 10.6% 10.5% 9.1% 8.2% 7.7% 5.2% 4.8% 4.6% 4.4% 4.3% 3.9% 2.6% 1.6% 52.2% 85.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% source : IMF, WBMS, Johnson and Matthey, Roskill, Industrial Rare Metals, Toyota, Nissan, Panasonic, Nikon, GS Yuasa Japanese Dependence on Metals Imports from Latin America Japan heavily depends on mineral resources imports. From Latin America, Japan imports substantial amount of Lithium, Copper, Zinc and Lead. Particularly, Chile is the origin of 86% of Lithium carbonate and 50% of copper concentrates used in Japan. 4 Japan s import ratio by country (2014) Ohters Argentina 3% 11% Chile 86% Lithium carbonate Indonesia 5% Canada 9% Peru 10% Others 15% Australia 11% Copper conc Chile 50% Canada 3% Mexico 7% USA 18% Peru 19% Ohters 1% Boliva 23% Zinc conc Australia 29% Brazil 1% Peru 12% Bolivia 13% USA 22% Others 1% Lead conc Australia 51% source : METI 2
Japanese Investments in Chilean Mining Sector 5 (US$ Thousand) Japan has started investing into Chilean mining sector since 1980 s. The value of Japan s investment increased recently, mainly because Caserones and Sierra Gorda came on stream. Japan was the biggest investor in Chile in the decade of 2003 2012. Japan boosted Chilean economic growth and job creation through our investment. Achieves Win Win bilateral relationship between Chile and Japan Japan s investment value and ratio in Chilean mining Japan s investment in mining sector in Chile Japan s investment ratio in total mining investment in Chile Ms. Michelle Bachelet Jeria, President of Chile and Mr. Shinzo Abe, Prime Minister of Japan source : Chilean Foreign Investment Committee Mr. Sergio Hernández COCHILCO and Mr. Kawano JOGMEC JOGMEC s activities for Metal & Mining Sector 6 JOGMEC is the national company that implements Japanese government s energy and mining policy. Annual budget of approx. $20 Billion, fully funded by the Japanese government. JOGMEC conducts a wide range of projects to promote mining business overseas. Joint Venture Exploration Financial Assistance Mine Pollution Prevention, etc. Head Office in Tokyo Joint Venture Exploration Investment or loan Financial Assistance Debt Guarantee Investment for asset acquisition Exploration Development Production Abandoned Mine Technology Development and Technical Support Mine Pollution Prevention Information Gathering, Analysis and Provision Managing National Stockpiling of Minor Metals 3
JOGMEC invests in metals & mining projects globally JOGEMC invests in 51 metals & mining projects with various international partners. 29 joint venture exploration projects with major/junior mining companies 22 financial assistance projects; capital investment, loan and debt guarantee 7 JOGMEC works closely with our partners to achieve win win relationship in mining. Asia (10) Canada (6) North America (8) Uzbekistan(2) USA (2) Kyrgyz(1) Japan (1) Laos (1) Marine project (1) Myanmar (1) Mexico (2) Philippine (1) Ethiopia(1) Cambodia (2) Solomon (2) Latin America (11) Tanzania (1) Indonesia(1) Namibia(2) Fiji (1) Malawi (2) Peru (3) Brazil (1) Botswana (2) Oceania (12) Chile (3) South Africa (2) Australia (8) Argentine (2) Africa (10) total 51 projects JOGMEC s joint projects in Latin America JOGMEC runs various projects in Latin America. 11 projects under our investments consist of 4 joint venture exploration projects and 7 financial assistance projects Additional 4 technology development supports such as minor metal recovery from tailings are ongoing as well as 1 mine pollution prevention activity in Peru Joint Venture Exploration (4) Financial Assistance (7) Technology Development and Technical Support (4) Mining pollution prevention (1) Peru (5) La Yegua, Cu Mo Sumi, Cu Mo Quechua, Cu San Rafael Mine Mining pollution prevention Chile (4) Caserones, Cu Sierra Gorda, Cu Esperanza, Cu Atacama Mine Mexico (2) Zinc project Los Gatos, Zn,Pb Bolivia (1) Brazil (2) Argentine (2) Salar de Uyuni Araxa, Nb Araxa mine Josemaria, Cu Salar de Olaroz, Li 8 4
Case 1: Copper mining projects in Chile 9 2014 became a memorial year for Japan because both Caserones and Sierra Gorda have started operation. Caserones is jointly owned by Pan Pacific Copper and Mitsui while Sierra Gorda is owned by Sumitomo Metal Mining, Sumitomo and KGHM. The total amount of copper production from the both projects is equivalent to over 20% of the Japanese annual copper imports. JOGMEC has provided a loan for Caserones since Japanese company acquired the mining concession in 2006. We also provide debt guarantees for both projects as part of their financial arrangements. Both projects are successfully on track by gathering the strength of all the stakeholders including project teams in Chile, Japanese companies and governmental organizations such as JOGMEC. Opening ceremony of Caserones, Aug 2014 Opening ceremony of Sierra Gorda, Oct 2014 source : Pan Pacific Copper, Sumitomo Metal Mining Case 2: Contribution to Mine Pollution Prevention in Peru 10 In Peru, JOGMEC provides various technical supports to contribute in the field of mine pollution preventions based on knowledge obtained from Japan s extensive experiences. Technical supports provided are: Dispatching advisors of mine pollution policies to the government since 2009 Providing technical training through on the job trainings to the engineers of the government since 2012 Hosting annual seminars on mine pollution prevention Hosting Seminars Sending Experts Training Engineers Seminar, survey and on the job training in Peru 5
Summary 11 1. As one of the biggest users of mineral resources in the world, Japan imports huge amount of mineral resources from Latin America. 2. In return, Japan has been investing a lot in Chile and the other Latin American Countries. JOGMEC also provides technical support on mine pollution prevention measures in Peru. 3. Latin America and Japan enjoy win win relationship through the corporation in the mining sector. The stronger cooperation between Latin America and Japan would contribute to the stable supply of mineral resources to the world. Welcome to Copper 2016 in Kobe, Japan 12 The 9th International Copper Conference, Copper 2016 will be held at Kobe International Convention Centre in Kobe, Japan, from November 13 to 16 in 2016. http://www.copper2016.jp/ 6
13 Thank you for your attention! 7