UPDATE 2-Toshiba looks to procure metals from Kazakhstan

(Recasts with announcement, adds comment)

By Mayumi Negishi

TOKYO, June 20 (Reuters) - Japan's Toshiba Corp (6502.T) agreed on Friday to expand its partnership with Kazakh state-owned company Kazatomprom to include rare metals and reactor components, in the latest move by a Japanese firm to secure raw materials in exchange for technical expertise.

The two sides will continue talks on how they can work together, and the result could be a capital tie-up, said a Toshiba official who asked not to be named.

"We are not excluding any possibility," he said. "Kazakhstan has the resources. We have the knowledge on how to use those resources."

Rising raw material prices are prompting Japanese firms to seek strategic allies in resource-rich countries.

Kazatomprom holds 10 percent of Toshiba's U.S.-based Westinghouse nuclear power unit, and the agreement would follow a move by Toshiba last year to buy uranium rights to the Kharassan mine in southern Kazakhstan.

Japanese firms, heavily dependent on China for rare metals, have been wary of China's moves earlier this year to raise export taxes on minor metals such as manganese, silicon and tantalum. They have been courting resource-rich Kazakhstan.

Rare metals, such as beryllium, tantalum and hafnium, are used in products ranging from electronics devices to control rods in nuclear plants.

Securing a stable supply of such raw materials is essential for a company like Toshiba, whose pillars of growth include semiconductors and its nuclear power business.

Toshiba President Atsutoshi Nishida met with Kazatomprom President Mukhtar Dzhakishev and Kazakh President Nursultan Nazarbayev during a tour of a Toshiba train factory in western Tokyo on Friday. (Additional reporting by Risa Maeda; Editing by Michael Watson)