Japan Government Supports Iron Ore Mine Development

Japan Oil, Gas & Metals National Corporation (JOGMEC) announced on Thursday to start the financial support for development of iron ore and coal mines abroad. JOGMEC aims to secure stable supply of metallic minerals including iron ore. The institution supports exploration and development funds by Japanese companies abroad. JOGMEC also helps development of non-ferrous minerals such as rare metals or base metals. Japanese government additionally invests 18 billion yen to JOGMEC inside the budget for fiscal 2008 and 6.1 billion yen for fiscal 2009.

JOGMEC invests within 10% of necessary funds for development of iron ore and coal mines, makes a loan within 70% and guarantees a debt within 80%. JOGMEC’s support includes a fund for equity acquisition.

It is difficult for Japanese companies to secure metallic mineral resources under oligopoly by major resource companies, reduction of hopeful mine sites and M&A activities among overseas resource majors. Consequently, Japanese government launched the support for infrastructure building such as rails or ports, technical cooperation and the measure for refractory ore.