Japan is diversifying its sourcing of rare earth elements, essential for its high-tech industries. Sojitz Corporation plans to expand its imports of highly scarce medium and heavy rare earth elements from Australia from the current two to a maximum of six by mid-2027.
China has long dominated the production of medium and heavy rare earth elements. Furthermore, Japan has launched a cooperative project with France, which is attempting to refine these elements domestically, and the movement to “reduce dependence on China” for medium and heavy rare earth elements is expanding.
Sozitz will begin importing samarium from Australia in April. Lynas, Australia’s largest rare earth company in which Sojitz has a stake, mines samarium in Western Australia and sources it from products from its soon-to-be-operational-production separation and refining facility in Malaysia. Samarium is used in permanent magnets for aircraft such as fighter jets and in nuclear reactors; this marks the first time samarium has been commercially produced outside of China. Japan’s domestic annual demand is approximately 80 tons, and the specific import volume for Sojitz has not yet been determined.
In addition to samarium, the refining facility in Malaysia plans to begin producing gadolinium, used in medical imaging diagnostics and nuclear reactor control rods. Simultaneously, the production capacity of dysprosium and terbium, already produced and exported to Japan for key components such as EV motors, will be expanded.
The refining facility’s processing capacity and product range are planned to expand gradually, aiming to reach an annual raw material processing capacity of 5,000 tons within two years. It is projected that by mid-2027, two to three new types of imported rare earth elements will be available, including gadolinium and yttrium, used in superconducting materials for medical devices.
Unlike light rare earth elements, which are more widely distributed globally, medium and heavy rare earth elements are concentrated in southern China, with global supply almost 100% dependent on China. Against this backdrop, the Chinese government strengthened export controls on dual-use rare earth elements to Japan in January, making supply chain diversification an urgent issue for Japan.
The Japan Energy and Metals National Corporation (JOGMEC) and Iwatani Corporation’s joint venture will invest in the French company Caremag in 2025. Caremag is building a rare earth refining plant in France, planning to begin commercial production from 2027 and export dysprosium and terbium to Japan.
Profitability has become a major issue in Japan’s efforts to diversify its supply chain. Lynas’s Mount Weld mine in Western Australia has a medium-heavy rare earth content of only about 5%. According to JOGMEC, some deposits in southern China have medium-heavy rare earth contents of up to about 50%. Therefore, Australian rare earth production is currently considered to be significantly more expensive than that of China.
Rare earth separation and refining typically begins with light rare earths with lower atomic numbers; the refining cost of medium-heavy rare earths with higher atomic numbers is even higher. At the same time, the production of medium-heavy rare earths generates byproducts such as cerium, which often exceeds demand, creating a burden in sales or disposal.
To ensure profitability, international cooperation is accelerating. In February, the U.S. government proposed establishing a “minimum price system” with Japan and the European Union (EU) to prevent the influx of low-priced Chinese products by imposing tariffs on rare earth imports. This would stabilize the market environment and encourage investment in the development of critical minerals by various countries.