Why is China banning rare earth exports to Japan?

China banned exports of items with potential military applications to Japan due to political comments made by Japanese Prime Minister Sanae Takaichi.

How has Japan prepared for China's rare earth threats?

Japan has spent years diversifying its supply chains and building stockpiles of rare-earth elements since prior Chinese threats in 2010.

Where are new rare earth production facilities emerging?

New rare earth facilities are sprouting up globally, including in the US, France, South Korea, India, Malaysia, Australia, Estonia, Germany, Brazil, and Angola.

Home / Business and Economy / Japan's Rare Earth Stockpile: China's Weakness?

Japan's Rare Earth Stockpile: China's Weakness?

8 Jan

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Summary

Japan diversified rare earth supplies after 2010 threats.
China's export ban may impact global magnet production.
New rare earth facilities are emerging worldwide, challenging China.

Japan's Rare Earth Stockpile: China's Weakness?

China has imposed a ban on exports of items with potential military applications to Japan, escalating a trade dispute. The most affected products are likely rare-earth magnets, crucial for various technologies from electric vehicles to missile systems. However, Japan appears relatively resilient, having spent years diversifying its rare-earth supply chains and building significant stockpiles following similar Chinese actions in 2010.

While China produces approximately 80% of the world's neodymium magnets, Japan itself manufactures about half of the remaining supply. This strategic preparation has historically shielded Japan from previous Chinese export threats. Meanwhile, other nations like European manufacturers and Indian companies have faced disruptions, struggling with delayed export license processing and drawing on existing stocks.

Despite Japan's reliance on China for roughly 70% of its rare-earth supplies, Beijing's assertive actions have inadvertently spurred a global renaissance in rare-earth production. New facilities are emerging worldwide, including in the US, Europe, and Australia, challenging China's long-held dominance in this critical sector.