Vietnamese Prime Minister Nguyen Tan Dung signed agreements with Japanese counterpart Yoshihiko Noda to provide Japan with rare-earth minerals used in hybrid cars and wind turbines and to cooperate on a nuclear project.
Japan agreed to cooperate on exploration, mining and processing of rare earths, starting with the Dong Pao project in Vietnam's Lai Chau province, the leaders said in a statement after meeting Monday in Tokyo. They also agreed for Japan Atomic Power Co. to carry out feasibility study for a nuclear station in Vietnam, according to the statement.
The rare-earth accord formalizes a deal announced last week by Toyota Tsusho Corp., which said it will set up a venture with Sojitz Corp. and Vietnamese state-run mining company Lavreco to supply more than 20 percent of Japan's rare-earth needs. The companies plan to produce 3,000 metric tons a year by 2013 and 7,000 tons by as early as 2014.
Toyota Tsusho, based in Aichi prefecture in Japan, is a trading company affiliated with Toyota Motor Corp.
Japanese makers of electric cars, wind turbines and oil-refining catalysts have sought to reduce use of the metals after China, which supplies more than 90 percent of the market, said in July 2010 that it would cut exports and clamp down on the industry.
The Bloomberg Rare Earth Mineral Resources Index reached a record in April, forcing mining companies to develop new prospects and buyers to find alternatives.
Vietnam has the world's fifth-largest rare-earth deposits, mostly in the northern mountainous provinces of Lai Chau and Yen Bai, the Thanh Nien newspaper reported last year, citing the Department of Geology and Minerals.
The nuclear accord followed an agreement reached a year ago, when Japan sought to help build nuclear power plants in Vietnam.
"Vietnam expressed its strong desire for the provision of nuclear technologies from Japan," the statement said. "The Japanese side expressed its intention to provide Vietnam with the technologies."
Japan will help finance nuclear construction in Vietnam by providing low-interest loans and train about 1,000 Vietnamese staff to operate atomic power facilities, the statement said.
Tokyo Electric Power Co., Japan's biggest utility, is still trying to bring the Fukushima Dai-Ichi nuclear power plant under control after the March earthquake and tsunami caused three reactor meltdowns in the worst civil nuclear disaster since Chernobyl in 1986.