Japan Scrambles to Break China’s Grip on Rare Earths

Japan is facing mounting pressure to reduce its heavy reliance on rare earth imports from China as political tensions between Tokyo and Beijing continue to deepen. The challenge has taken on new urgency after signs that China may restrict exports of the critical minerals to Japan, a move widely seen as retaliation for remarks by Prime Minister Sanae Takaichi about a potential contingency involving Taiwan.

People familiar with the matter say cutting dependence on Chinese rare earths without inflicting serious damage on Japan’s domestic industries will be extremely difficult. Some rare earth elements essential for advanced manufacturing exist only in China, and viable substitutes have yet to be developed, leaving Japan exposed to supply disruptions that could ripple through its technology and industrial sectors.

China has previously demonstrated its willingness to use rare earths as leverage in geopolitical disputes. It has won concessions from the United States by curbing exports of the minerals, prompting reductions in tariffs imposed by President Donald Trump. Beijing also halted rare earth shipments to Japan in 2010 after a Chinese fishing vessel collided with Japan Coast Guard ships near the Senkaku Islands, a group of islets administered by Japan but claimed by China.

In response to that earlier crisis, Japan’s public and private sectors moved to diversify supply sources, boosting imports from Southeast Asia. Those efforts have reduced China’s share of Japan’s rare earth imports from about 90% to roughly 60%, easing but not eliminating the country’s vulnerability.

To prepare for the possibility of another export ban, the Japan Organization for Metals and Energy Security has expanded strategic stockpiles and supported Japanese companies’ investments in overseas mining and refining projects. The government-affiliated body began investing in an Australian mining company in 2011 alongside trading house Sojitz and funded a French rare earth refiner last year with energy firm Iwatani.

The Japanese government now plans to accelerate such joint investments by strengthening JOGMEC’s financial base. However, experts caution that it can take more than a decade for these projects to yield stable supplies, due to lengthy exploration processes and strict environmental regulations surrounding mineral refining.

While officials have declined to disclose the size of Japan’s rare earth stockpiles, a government source said systematic reserves are in place to cushion the impact of sudden supply disruptions. Still, critics warn that the stockpiling system is designed only for temporary shortages and cannot substitute for long-term supply security.

As a result, analysts argue that Japan will have little choice but to continue diplomatic engagement with China to manage tensions, even as it works to build more resilient and diversified supply chains for minerals that underpin its advanced manufacturing economy.