Press reports last month indicated that Japan was planning to file a complaint with the World Trade Organization (WTO) over Indonesia’s export restrictions.
This was not greeted with much surprise. Japan is not mineral rich and so relies heavily on imports to fulfil demand for technological and construction end markets. Following the devastating 2011 earthquake and tsunami, Japan has worked hard to rebuild damaged buildings, relying heavily on imports to do this.
For Japan, it was probably concerned with the ban on nickel exports. While China, which has imposed its own set of restrictions on rare earths exports, will be more significantly affected.
China is a significant consumer of Indonesian bauxite with nearly 80% of Chinese bauxite imports sourced from there in 2011.
The bauxite...