Advanced Material Japan Corp. has suspended a proposal to reopen a tungsten mine after a 16-year hiatus, complicating plans by the nation to reduce dependence on imports of the metal used in machine tools and light bulbs.

    The trading house, a unit of Tokyo-based Alconix Corp., halted moves to restart the Kiwada Mine in Yamaguchi, western Japan because of environmental concern, a lack of miners and problems estimating deposits and acquiring the rights, President Shigeo Nakamura said in an interview.

    China produces 90 percent of the world's tungsten, according to Japan Oil, Gas & Metals National Corp. The metal tripled in price in 2004-05 as rising demand fuelled a boom in commodity prices. Japan, the world's second-largest economy, imports all its base metals and is boosting resource spending to secure supply as global demand for raw materials soars.

    ``Domestic mine developers face high hurdles, including local concerns about pollution and a lack of mine workers,'' Yoshiyuki Kita, rare metal stockpiles division manager at JOGMEC, said today. The state agency oversees inventories of resources such as tungsten, nickel and cobalt.

    Tungsten, which rose to $290 per 10 kilograms in 2005, was quoted at $254 on Sept. 3, according to Metal Bulletin. Japan consumed 7,400 tons in 2005, according to JOGMEC figures. The country imports about 90 percent of its supplies from China.

    Chinese ImportsProposals to redevelop the Kiwada mine, which closed in 1992 because of an influx of Chinese imports in the 1980s, gained momentum after prices rose.

    Advanced Material Japan, assisted by the Ministry of Economy, Trade and Industry, in 2007 shipped 2,000 metric tons of uncollected surface ore from mine owner Kiwada Kozan to send to Russia's Far East for processing.
    Ore concentrations of as much as 10 percent in the mine, nearly 10 times the global average, persuaded Advanced Material that buying and reopening the project ``would help it gain leverage in price negotiations'' with China, Nakamura said. The trading house specializes in rare metals.

    Local government authorities and residents were concerned the project would cause pollution, while the long closure of the mine had left the region with a shortage of skilled workers, he said. Negotiations also stalled with Kiwada Kozan over the price of the investment.

    The mine, which opened in 1911 and produced as much as 7,000 tons of tungsten ore a year, accessed separate underground deposits that are ``scattered about like potatoes,'' said Masaharu Nagahara, 81, its former head. ``Serious excavation work could lead to the discovering of new veins,'' he said.

    The Ministry of Economy, Trade and Industry plans to spend 954 billion yen ($8.8 billion) in the year starting April 2009 to help secure natural resources, up from the current year's 818 billion yen. Priorities include development of rare metal resources and acquisition of overseas oil and natural gas assets.

    JOGMEC this year started searching for tungsten deposits in Canada and Kazakhstan.