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Mining was one of the first sectors of the economy to be modernized in the early Meiji era as part of the new government’s industrial policy. The procurement of gold and silver for minting coins as well as coal for fueling steam engines was of the utmost importance for the government. Japan was endowed with these mineral resources and in the 17th century it even exported considerable amount of copper, but the amount mined gradually declined. In contrast, coal mines had not been fully developed in the pre-Meiji period and they remained small in scale.

Between 1868 and 1890, the Meiji government took the following steps towards modernizing metal and coal mining. First, it hired foreign technical experts and sent them to government-run mines where they introduced advanced mining technology. Then, under the Japanese Mining Law (1873), all mineral resources were nationalized. Although the government allowed private enterprises to excavate mineral ores, mine development was placed off limits to foreign companies. The government then established the Imperial College of Engineering to provide the technical and managerial skills needed to develop mining. Finally, the modernized mines were turned over, one by one, to private companies.

On the whole, this modernization process benefited from the accumulated knowledge and expertise possessed by indigenous mine managers and workers, without which the adoption of modern techniques would have been very difficult. However, the indigenous subcontracting system was found to be incompatible with newly introduced methods of management and therefore had to be transformed or totally dissolved.