BookTitleToyota Tsusho 70-Year History

Summary

Toyota Tsusho 70-Year History

“China + 1”policy whereby reliance on Chinawould be reduced by developing rare earthresource business in other countries.Candidate countries included Vietnam,Indonesia, and Canada. In the end, ToyotaTsusho selected India as the country in whichto begin its foray into rare earth resourceproduction. Why India?“We had acquired Wako Bussan Co., Ltd., aresource trading company, in December 2008,”explains a member of the Metal & MineralResources Department.“So we decided tomake use of Wako Bussan’s commercial rightsin India.”In 2009, Toyota Tsusho establishedTREI (Toyotsu Rare Earths India) as a whollyowned subsidiary and began negotiations withIRE (Indian Rare Earths), a wholly ownedsubsidiary of the Indian Atomic EnergyAgency. IRE dresses monazite ore fromlocally produced alluvial deposits to makeuranium and thorium, which are raw materialsused for nuclear fuel. TREI buys mixed rareearth chloride?a by-product of monazite oreextraction?and uses it for rare earth resourceseparation and refining.TREI’s negotiating partner was a local manknown for his hard bargaining and who alsoworked for the government. A devastatingcyclone delayed work for several years, buteventually, in December 2015, a two-yearsupply contract was signed with IRE to procurethe mixed rare earth chloride. Constructionstarted on a plant in the state of AndhraPradesh, and in January 2016 the separationand refining began of rare earth resources,such as neodymium, cerium, lanthanum, andpraseodymium. These products were thenshipped to Japan and Europe.Securing Resources in the Faceof Expanding Real DemandA global shift is clearly taking place fromgasoline to electric vehicles. The transitionto EVs has become pronounced not onlyin Western countries, such as France, theU.K., and Germany, but also in China. It is adevelopment that is likely to turn current powerdynamics in the automotive sector on theirheads. How can an automobile manufacturercope with such tumultuous change? TMC istaking steps to strengthen its position. Onesuch step is the establishment of a joint venturewith Mazda Motor Corp. and Denso Corp. todevelop core EV technologies. The dynamicsmight change, but market forecasts say that onething will remain the same: a steady increasein demand for rare earth resources and raremetals. Rare earth resources and rare metals arecommodities that are vulnerable to fluctuatingmarket prices, but real demand continues toexpand.How is Toyota Tsusho responding to this?“It’s risky to rely heavily on only one or twocountries or regions,”says a spokesman.“Whatwe need is multifaceted resource developmentall over the world.”In addition to lithium inArgentina and rare earth resources in India,Rare earthsRare earth resource site in India198