Japan is preparing to boost its rare earth processing capacity. By 2027 the nation intends to begin refining rare-earth mud extracted from deep-sea lodes. Together, this strategic move reaffirms Japan’s competitiveness and leadership in the global market. Today, China continues to hold a monopoly position as the key global supplier for these critical materials.
The call for countries such as Malaysia to climb up the rare earth value chain has been emphasized in the past months’ writing. Malaysia on the other hand is attempting to develop the most domestic capabilities possible in this area. Japan’s efforts might provide a framework for such cooperation and joint development. Experts assert that moving up the value chain is essential for developing nations to establish a stronger foothold in the rare earth industry.
Private companies such as Toyota Tsusho are already making a considerable play for infrastructure investments into Central Asia. They’re concerned about getting access to a more secure domestic supply of rare earth materials and other critical minerals. These investments are indicative of a wider trend among Japanese automakers, including Toyota, who are more spooked than ever by supply chain disruptions. In reaction to increased supply chain dangers, they’ve agreed to share semiconductor intelligence in an effort to avoid future disruptions.
Even with a recent US-China deal to cool tensions, rare earth prices still haven’t come down significantly. The United States and Australia have entered into a landmark agreement on critical minerals. The writing on the wall remains clear, say analysts — this partnership will need time to make a serious dent in China’s monopoly hold on the rare earths market. The US has been taking aggressive and significant steps to decrease its reliance on Chinese graphite and other critical minerals.
Mitsubishi Corp. to make a difference by diversifying its supply chains. The company last month announced plans to import gallium into Japan for the first time. While only a first step towards supplying rare earth materials that bypass Chinese sources, this initiative is notable and significant. The importation of gallium is part of a broader strategy to secure critical minerals essential for various industries.
Recent analyses on the subject show that recent shocks to China’s rare earths industry have been made worst by bureaucratic red tape. Concerns are growing over a mysterious German bunker that allegedly contains stockpiles of rare-earths. This unfortunate situation triggers immediate and pervasive questions around global transparency within the burgeoning critical mineral supply chain.
Japan and Australia are also embarking on talks to coordinate production and supply of critical minerals, such as rare earth elements. Together, their partnership would have the tools to truly counter China’s totalitarian grip on this critical industry. The international community is rightfully concerned over the increasing sway China has over the rare earth supply chain. This predicament poses serious risks for nations trying to protect their own resources.