Japan, France to ink rare-earths deal, Nikkei reports

Japan, France agree rare earths deal to cut China reliance, NHK reports

Japan and France Strengthen Rare Earths Supply Chains

By Katya Golubkova and Yusuke Ogawa

April 1 (Reuters) - Japan and France agreed to strengthen support for rare earths supply chains on Wednesday, Japan's public broadcaster NHK reported, in the latest moves by both countries to lessen dependence on the world's dominant supplier, China.

Critical Minerals Cooperation

During French President Emmanuel Macron's three-day visit to Japan for talks with Prime Minister Sanae Takaichi, officials signed a roadmap to cooperate on critical minerals supply chains, NHK said.

Statements from French Officials

"We cannot rely solely on specific countries, especially China," French Finance Minister Roland Lescure was quoted as saying by NHK.

Caremag Rare Earths Refining Project

The two sides also agreed to secure raw material supplies for a rare earths refining project in southern France, called Caremag, the broadcaster said.

The state-owned Japan Organization for Metals and Energy Security and gas firm Iwatani, along with the French government, are investors in Caremag, which is due to start operations in late 2026.

Japan plans to get about 20% of its future demand for dysprosium and terbium from the refining plant, heavy rare earth oxides used in magnets for EV motors, offshore wind turbines and electronic components.

Joint Statement on Diversifying Supplies

Takaichi and Macron are due to issue a joint statement calling for diversifying supplies of rare earths and other critical minerals during their summit on Wednesday, the Nikkei newspaper reported separately.

Diversifying from China

DIVERSIFYING FROM CHINA

The deal comes at a critical moment, with Japan and Western governments and manufacturers scrambling to secure supplies of rare earths minerals to reduce their dependency on China, the world's dominant rare earths producer and supplier.

China's Export Restrictions

In February, China prohibited exports of so-called dual-use items to 20 Japanese entities, which it said supply Japan's military.

That was after Takaichi angered Beijing with comments about Taiwan in November.

The rules cover seven rare earths and associated materials currently on China's dual-use control list, including dysprosium and yttrium, along with a swathe of other controlled critical minerals.

Expert Analysis

"China is pursuing a strategy of using rare earths as a diplomatic card, and if U.S.-China and Japan–China relations improve, exports could recover quickly," said Kotaro Shimizu, principal analyst at Mitsubishi UFJ Research and Consulting.

Japan's Efforts to Reduce Reliance

Japan has reduced its reliance on China to 60% from 90% following a 2010 diplomatic incident which saw Beijing restricting rare earths supply to Tokyo.

Japan has been boosting investments in overseas projects like trading house Sojitz's tie-up with Australia's Lynas Rare Earths, and promoting rare earths recycling and manufacturing processes.

Recent Developments and International Partnerships

In the latest set of steps, Japan's Mitsubishi Materials this week agreed to acquire a stake in U.S. ReElement, a company involved in rare earth element recycling, as both countries have set up an action plan for China alternatives.

Japan and the U.S. are also considering joint development of rare-earth-rich mud deposits, near the remote Minamitori Island, and Japan is in talks with India to jointly explore rare earths in the desert state of Rajasthan.

Broader Cooperation Between Japan and France

Japan and France will also seek cooperation in space, with companies from the two countries expected to sign memorandums of understanding on 12 joint projects, including space debris removal and rocket launches, the Nikkei said.

(Reporting Katya Golubkova and Yusuke Ogawa in Tokyo; Additional reporting by Rajasik Mukherjee & Nichiket Sunil in Bengaluru; Editing by Shailesh Kuber and Kevin Buckland)