Japan’s large integrated trading company, Nissho Corporation, achieved a historic breakthrough on October 30 by importing heavy rare earths from Australia for the first time, breaking away from its reliance on China. In the background of China continuously tightening its control over rare earth exports, Western allies are accelerating the construction of independent rare earth supply chain systems, leading to a profound restructuring of the global critical minerals landscape.
According to a report by the Nikkei, Nissho Corporation’s first import of heavy rare earths comes from Lynas Corporation, Ltd., located in the Mount Weld mine in Western Australia. After the rare earth ore is mined locally, it is transported to a separation plant in Malaysia for processing into heavy rare earth elements such as dysprosium and terbium, which are then exported to Japan.
Dysprosium and terbium, heavy rare earth elements, significantly enhance the heat resistance of high-performance neodymium magnets. These magnets are crucial materials for electric vehicles (EVs) motors and wind turbines, forming an important foundation for the clean energy industry chain.
In fact, Nissho Corporation began its strategic layout as early as 2023, establishing a joint venture with the Japan Oil, Gas and Metals National Corporation (JOGMEC). The company invested around 200 million Australian dollars in Lynas Corporation and signed a long-term supply agreement, securing up to 65% of dysprosium and terbium in Lynas’ heavy rare earth products, laying the foundation for Japan to build an independent and stable rare earth supply system.
With the start of production lines for Lynas targeting the Japanese market, Nissho Corporation was able to achieve this historic import.
As planned, Japan aims to purchase about 30% of its domestic heavy rare earth demand from Australia, significantly reducing its reliance on a single supply source.
This import holds significant strategic importance for Japan. Previously, Japan’s heavy rare earth supply was almost entirely dependent on imports from China. During the 2010 Diaoyu Islands dispute, China temporarily halted rare earth exports to Japan, severely impacting the supply chains of major manufacturers and highlighting Japan’s vulnerability to supply chain security.
Since then, diversifying supply sources beyond China has been viewed by the Japanese government as a core economic security strategy. However, diversification also entails a more complex logistics network – materials must be extracted from Australia, the United States, and processed in Southeast Asia before reaching Japan.
In April of this year, China imposed export restrictions on seven types of medium and heavy rare earth-related items. On October 9, China further expanded its scope of control to include five additional medium and heavy rare earths, lithium batteries, and synthetic graphite anodes, with the new regulations set to take effect from November 8.
The new regulations require permits for the export of the aforementioned items, covering not only traditional trade exports but also any form of transfer or provision through intellectual property licensing, foreign investment, technology exchanges, and more.
These control measures are interpreted by the international community as part of China’s strategy of “weaponizing rare earths” in geopolitical games, further solidifying the determination of Western countries to construct independent supply chains.
Faced with China’s escalating controls, Western allies have quickened the pace of joint actions.
In July of this year, the United States, Australia, India, and Japan announced the launch of the Quad Critical Minerals Initiative, aiming to ensure stable supply and supply chain security of critical minerals through multilateral cooperation.
The initiative focuses on promoting cooperation across the entire industry chain of critical minerals from extraction, processing, to recycling, to address geopolitical risks and reduce overreliance on a few countries.
On October 20, President Trump and Australian Prime Minister Anthony Albanese signed a strategic agreement on critical minerals, elevating this cooperation to new heights.
Under the agreement, the governments of the US and Australia committed to investing at least $1 billion each in the next six months to jointly advance mining and processing projects worth a total of $8.5 billion. The agreement also includes setting a price guarantee mechanism for critical minerals to ensure the long-term stable operation of the projects.
During the meeting, Trump openly stated, “I don’t want China to choke off our necks on rare earths.” He indicated that with the new agreement, “roughly a year from now, we will have sufficient critical minerals and rare earth resources.”
The projects covered by the agreement include the development of various critical minerals such as neodymium, titanium, zirconium, graphite, among others. Of particular strategic significance is the Eniaba Refinery Project in Australia, which has received $1.75 billion in government loan support.
Upon further development, the Eniaba Refinery will be able to produce about a quarter of the global supply of heavy rare earths. These materials are not only key raw materials for manufacturing high-performance magnets but also essential for advanced weapon systems and other defense equipment, holding significant military strategic value.
As Japan, the United States, Australia, and European countries accelerate the construction of rare earth supply chain systems independent of China, the global critical minerals landscape is undergoing a profound restructuring.