Key facts
- Japan's imports of key rare earths like dysprosium and yttrium have dropped significantly.
- Chinese export restrictions are squeezing supplies, forcing Japanese companies to use existing inventories.
- Japan is initiating test drilling for rare earths off its easternmost island, Minamitorishima.
- The country is pursuing international partnerships, including with the US, Australia, and France, to diversify supply chains.
- A joint Japan-France smelting plant is set to begin operations by the end of 2026.
Japan is facing significant challenges in securing essential rare earth elements, crucial for electric vehicles and semiconductor manufacturing equipment, due to increasing pressure from China's trade restrictions. Imports of key materials like dysprosium and yttrium have plummeted by approximately 80% compared to two years ago, forcing Japanese materials companies to deplete their inventories to meet customer demand.
In response to these supply chain vulnerabilities, Japan is accelerating efforts to build an independent rare-earth supply chain. A key initiative involves test drilling for rare earths off Minamitorishima, Japan's easternmost island, scheduled to begin in January 2026. This project aims to retrieve rare-earth-rich mud from approximately 6,000 meters below the ocean surface, with researchers speculating that the seabed could hold enough heavy rare earths to supply global demand for centuries.
Beyond domestic exploration, Japan is actively pursuing international cooperation. In October 2025, Prime Minister Sanae Takaichi signed an agreement with the United States to collaborate on securing critical materials. Furthermore, Japan is diversifying procurement sources through projects such as one with Australia and Malaysia, where Australian-mined rare earths are separated and refined. A joint project with France is also underway to establish a smelting plant expected to commence operations by the end of 2026, which will secure a portion of Japan's heavy rare earth needs. Toyota Tsusho has also joined a JOGMEC project to survey a rare-earth mine in Namibia.