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Messages from "Economic Trend", December 2010

Battle for Natural Resources

Akihiko IDE
Vice Chairman of the Board of Councillors, Nippon Keidanren
Chairman, Mitsubishi Materials Corporation

Since the beginning of the 21st century, commodity prices have risen dramatically to the higher-ever level due to rapid increase of demand from the emerging economies such as China and India. We have seen a temporary slow down in the upward trend recently, however, there is no doubt of it heating up again, once the world economy shows the signs of bottoming out. Now there is a fierce competition for natural resources taking place among countries and companies motivated greatly by the high commodities price. Global natural resource companies are intensifying their business strength by retaining and integrating their rich assets, meanwhile China is voraciously investing in overseas natural resources under the governmental initiative to "feed the dragon". This is literally a "global battle" for natural resources.

We can no longer expect to enjoy a good profit by "manufacturing products" with cheap raw materials as we used to. Rather, we are facing a huge threat that most of the profit made from "manufacturing products" will flow out to the resource-rich countries. In order to stop this outflow, it is evident that manufacturers must secure necessary resources by themselves, which is not an easy task to do considering the severe global competition among nations and companies with conflicting interests.

Nevertheless, this can be an excellent opportunity for Japan to take advantage of the current situation of depleting natural resources by utilizing our advanced technologies. Nobody will doubt about Japanese contributions toward the less consumption of resources supported by our highly developed systems of energy-saving, resource-saving and recycling. In addition, our cutting-edge technologies such as solar, wind and biomass power generation will possibly enable the world to rely on renewable resources rather than on limited natural resources. It is extremely important for Japan to demonstrate strong leadership in realizing the low-carbon and recycling-oriented society.

Natural resources have always been a major cause of conflict among nations throughout the history, and will remain to be so in the future. Japan should establish an effective private-public partnership and take necessary diplomatic actions in order to secure natural resources. Now is the time to mobilize our resources to contemplate how to survive the "battle for natural resources".

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