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The US and Japan announced an agreement to strengthen and diversify supply chains for critical minerals used in electric vehicle batteries, semiconductors and other cutting-edge technologies.
Under the agreement, which went into effect immediately after it was signed on Tuesday, the US and Japan agreed to work together to strengthen supply chains of critical minerals, including cobalt, graphite, lithium, manganese and nickel. The two countries pledged to take domestic measures to address other countries’ non-market policies that distort trade in critical minerals and not to impose US-Japan export tariffs on critical minerals.
The agreement comes as China plays a central role in global supply chains for critical minerals and has the most refining capacity for cobalt, lithium and nickel. It is also increasingly exercising control over commodities in areas rich in critical minerals. For example, the Nigerian government recently signed a contract with a Chinese company to develop the country’s first lithium processing plant.
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The agreement established best practices for screening investments made by foreign companies in the two countries’ critical mineral sectors. It also included measures to promote resource-efficient approaches to reduce the demand for and environmental impact of virgin extraction of critical minerals.
The US and Japan will also improve information sharing and enforcement actions related to labor rights violations in the extraction and processing of critical minerals. In addition, the two countries will seek to address labor rights violations at companies linked to critical mineral supply chains and promote employer neutrality in union organizing.
US Trade Representative Katherine Tai said the agreement was “a testament to President Biden’s commitment to building resilient and secure supply chains.”
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Salt evaporation ponds can be seen at Bristol Dry Lake where Standard Lithium Ltd. prepared to use direct lithium extraction technology to recover lithium from brine taken for evaporation to produce industrial minerals near Amboy, California… (David McNew/Getty Images)
“Japan is one of our most valuable trading partners and this agreement will allow us to deepen our existing bilateral ties,” Tai added. “This is a welcome moment as the United States continues to work with our allies and partners to strengthen critical mineral supply chains, including through the Inflation Reduction Act.”
“With the prospect of a significant increase in demand for electric vehicle batteries, there is an urgent need to secure critical minerals essential to the production of clean vehicles,” added the office of Japan’s Ambassador to the United States, Tomita Koji, in a press release added. “The agreement aims to build resilient supply chains through coordination between Japan and the US and between like-minded countries with increased collaboration to ensure sustainable and equitable supply chains for such critical minerals, including promoting the goals of the Inflation Reduction Act.”
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Tai’s office hailed the agreement as a reminder of “the US and Japan’s shared commitment in the critical minerals sector to facilitating trade, promoting fair competition and market-based conditions for trade in critical minerals, promoting robust labor and environmental standards, and… To work together in efforts to ensure safe, transparent, sustainable and equitable supply chains for critical minerals.”