BookTitleToyota Tsusho 70-Year History

Summary

Toyota Tsusho 70-Year History

Breaking Japan’s Reliance onChina for Minor MetalsIn mid-2000, the shoe finally dropped. Japanrealized that it relied on China for almost all ofthe rare earth resources it used in the batteriesand motors powering eco-cars such as electricvehicles (EVs) and hybrid electric vehicles(HEVs). Japan was the world’s largest user ofrare earth resources, but it depended on Chinafor over 90% of its supply.The Senkaku conflict in August 2010 broughthome to Japan how precarious its position was.The falling-out led China to impose restrictionson the export of rare earth resources, and theimpact on Japanese manufacturers was clear forall to see. How was Japan to establish a stablesupply of minor metals by procuring not onlythe rare earth resources but also the rare metalsso important for batteries and motors? Theissue was particularly pressing for Japan, dueto its lack of natural resources and unavoidableheavy reliance on overseas sources.With its strong focus on eco-cars, TMC feltan especially urgent sense of crisis. ToyotaTsusho was told,“We need to reduce ourreliance on China for rare earth resourcesand secure a stable supply of rare metals.So we need you to get involved in upstreamdevelopment of resources to enable a stablesupply of minor metals.”In December 2008, Toyota Tsusho assignedthis mission to its newly created Metal &Mineral Resources Department, made up ofpeople from the Metals Planning Group in theMetals Division.Launching Lithium ResourceDevelopment in ArgentinaLithium is a minor metal that is essential forbatteries. A project was launched in Argentinain 2010 with the aim of securing lithiumresources. After signing a memorandum tojointly carried out a feasibility study for lithiumresource development with an Australianresource company, in 2012 Toyota Tsushosucceeded in acquiring a 25% interest in theOlaroz salt lake development project in JujuyProvince in northwest Argentina.Argentina has rich resource reserves, andmining them is relatively easy, making itan attractive country for companies seekinglithium resources. Companies from notonly Japan but also China and Korea werecompeting for resource development rights.Why, then, was Toyota Tsusho selected as apartner? Members of the Metal & MineralResources Department look back.“Unlike ourrivals, who were aiming for short-term profits,we offered a long-term business relationship,which was appealing to our partner. TheAustralian firm also liked the look of thefinance package we presented.”Toyota Tsushoalso had the benefit of being able to provide astable customer base in the automotive sector.The road to commercialization was notwithout bumps. Having experienced economicvolatility, Argentina is very wary of foreigncapital and requires a high rate of localprocurement.“Strict import regulations meantthat we had to use Argentinian pumps, forexample, even if they did not work so well,”explains a member of the team.“And becauseparts are hard to get hold of, we were in troubleif a pump broke down.”Production of lithium carbonate began inDecember 2014, and the following year sawthe first shipments to Japan and Europe.Separation and Refining ofRare Earth Resources by aWholly Owned Subsidiary inIndiaTo reduce TMC’s dependence on China forrare earth resources, Toyota Tsusho adopted aOlaroz Salt LakeStories197