Managing resource dependency: The United States and Japan in the markets for copper,iron ore and bauxite

This study analyses the different arrangements through which the US and Japan have procured their imports of non-fuel minerals, and attempts to shed light on the likely implications of these arrangements for the relations between these two countries. It focuses on three critical minerals — copper, iron ore and bauxite — which, after oil, constitute the core of every industrial society. Because both the US and Japan exhibit high levels of dependence on foreign supplies of these three minerals, it is clear that ensuring adequate supplies at reasonable costs will be a major guiding force in their respective future policies. This paper examines factors affecting the international markets for these minerals, the structure of investment, production and trade, and the relations with the source countries.From the discussion of these issues two paradoxical themes emerge: (1) that Japan has been able to procure much of her raw materials during the 1960s and 1970s at more favourable terms than has the US, even though the latter country had tighter links to its supply sources; (2) that the changing conditions in the minerals industries under study have resulted in recent years in a convergence in the procurement mechanisms of the US and Japan and this convergence is likely to increase strains on US-Japanese relations.