Japan, explained.
Drilling for soil samples at a rare earth exploration project in Minas Gerais state, Brazil (Victor Moriyama/Bloomberg via Getty Images)
New agreements with Lynas and Brazil's Goiás state show Japan moving from supply anxiety to market architecture.
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Japan’s bid to build a “de-Chinafied” rare earth supply system – with Australia and Brazil on-boardJapan’s bid to build a “de-Chinafied” rare earth supply system – with Australia and Brazil on-board
To respond to China’s long-standing dominance of the rare earth market and its use of that dominance as a tool of diplomatic pressure when necessary, Japan is accelerating its effort to elevate rare earths from a purely industrial supply issue to a core component of its economic security strategy. Through the Japan Organization for Metals and Energy Security (JOGMEC), the Japanese government has recently advanced key initiatives in both Australia and Brazil, showing that its strategy to build a stable, “de-Chinafied” rare earth supply system has entered a new phase.
The most representative development in this shift comes from Japan’s latest cooperation with Australia’s leading rare earth producer, Lynas Rare Earths. Lynas will renew its supply contract with Japan Australia Rare Earths B.V. (JARE), a joint venture established by Sojitz and JOGMEC. Lynas has agreed to supply 7,200 metric tonnes annually of neodymium and praseodymium – key materials for electric vehicle motors – and to extend the contract period until 2038. For Japan, which is highly dependent on such critical minerals, this is not merely a commercial extension, but a form of insurance for industrial supply chains over the coming decades.
The agreement also includes a minimum price guarantee mechanism. To reduce the impact of market volatility on upstream mining profitability, 5,000 metric tonnes of the supply will be subject to a floor price of US$110 per kilogram. This price level aligns with the understanding previously reached between the Trump administration and MP Materials, suggesting that the United States, Japan and Australia are beginning to develop a certain degree of price coordination and policy alignment on strategic minerals.
Japan is no longer passively searching for alternatives to China but beginning to actively shape a rare earth supply system that can better withstand geopolitical shocks.
It means that Japan is no longer seeking only to diversify supply sources but also beginning to establish a policy-driven stabilising framework for critical minerals beyond market mechanisms. This will reduce room for China to manipulate the market through price intervention.
Another notable dimension of cooperation with Australia is that it could help Japan overcome China’s advantage in heavy rare earths. The two sides have now reached a shared understanding on securing stable supplies of heavy rare earth elements such as dysprosium and terbium. For Japan, dysprosium and terbium more directly affect the resilience of high-end industrial and defence supply chains.
Neodymium magnets on display (Yuriko Nakao/Bloomberg via Getty Images)
If Australia represents the consolidation of an existing alternative supply chain, Brazil symbolises Japan’s forward-looking positioning for the next stage. This month, JOGMEC signed a memorandum of understanding with the Brazilian state of Goiás, further extending Japan’s rare earth strategy from established suppliers to promising new mining regions.
Brazil holds approximately 21 million metric tons of rare earth reserves, ranking second in the world after China and exceeding US reserves more than tenfold. Although a major mine in Goiás officially began operations in 2024, Japan is seeking to get involved early and strengthen cooperation in rare earth extraction and supply to reduce dependence on a single supply chain.
The significance of this cooperation lies not only in the scale of resources, but also in the diplomatic and industrial extension strategy it reflects. Japan’s ambassador to Brazil, Teiji Hayashi, stated that the project aligns with the Japanese government’s economic security strategy. The Goiás state government hopes to use Japanese capital and technology to promote the development of higher value-added processing industries locally. This suggests that Japan’s objective is no longer simply to purchase rare earth raw materials from overseas, but to cultivate new processing capacity and industrial nodes outside China. Without building midstream capacity outside China, supply chain diversification cannot truly be considered complete.
The consequences of Japan’s move into Brazil go beyond bilateral cooperation. In February 2026, the US government also announced that it would invest more than US$500 million in Goiás. This indicates that Brazil is emerging as a key partner for both the United States and Japan in reducing dependence on Chinese rare earths. From this perspective, Brazil is no longer merely a potential resource country, but an increasingly important pivot in the geopolitical competition over critical minerals.
Japan’s decision to step up its engagement at this moment is not only about securing an early advantage in the restructuring of supply chains, but also about responding to the increasingly clear strategic realities created by US-China competition.
Overall, Japan’s simultaneous moves in Australia and Brazil reflect a more mature economic security strategy. They show that Japan is no longer passively searching for alternatives to China but beginning to actively shape a rare earth supply system that can better withstand geopolitical shocks and is less vulnerable to domination by any single country.
For a country that depends heavily on advanced manufacturing and energy transition materials, this is not merely an adjustment in resource policy, but an extension of strategic security logic.
About the author
Jing Ge
Jing Ge is an instructor at Florida International University.
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