After China Curbs, Japan Secures 75% of Lynas’ Heavy Rare Earths
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Construction of the Lynas rare earth plant in Malaysia. Photo: VCG
Australian miner Lynas Rare Earths Ltd. will reserve 75% of its heavy rare earth oxide production for Japan under a new supply agreement, a move that comes as Tokyo scrambles to secure supplies of the critical minerals amid escalating export controls from China.
In an announcement earlier this week, the world’s largest rare earths producer outside of China said it signed the deal with Japan Australia Rare Earths B.V. (JARE), a joint venture between state-backed Japan Organization for Metals and Energy Security (JOGMEC) and trading house Sojitz Corp.
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- Lynas will reserve 75% of its heavy rare earth oxide production for Japan under a new supply agreement with JARE, amid tightened Chinese export controls.
- JARE will get 5,000 tons of neodymium-praseodymium alloy annually; the minimum price is $110/kg, below the US spot price of $120/kg as of March 2025.
- Japan reduced reliance on Chinese rare earths from 90% to 58% in 2024, but remains vulnerable to economic losses from Chinese export restrictions.
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Who’s Who
- Lynas Rare Earths Ltd.
- Lynas Rare Earths Ltd. is the world's largest rare earths producer outside of China. It has signed a deal to reserve 75% of its heavy rare earth oxide production for Japan, with 50% going to JARE and the remainder to other Japanese companies. The agreement also includes an annual allocation of 5,000 tons of NdPr alloy.
- Japan Australia Rare Earths B.V.
- Japan Australia Rare Earths B.V. (JARE) is a joint venture between Japan Organization for Metals and Energy Security (JOGMEC) and trading house Sojitz Corp. It was established in 2011 to help Japan diversify its rare earth sources and has since provided significant financing to Lynas Rare Earths Ltd. JARE will purchase 50% of Lynas's reserved heavy rare earth output and has an annual allocation of 5,000 tons of NdPr alloy.
- Sojitz Corp.
- Sojitz Corp. is a Japanese trading house that is part of Japan Australia Rare Earths B.V. (JARE), a joint venture with the Japan Organization for Metals and Energy Security (JOGMEC). This joint venture has signed an agreement with Australian miner Lynas Rare Earths Ltd. to secure a significant portion of its rare earth oxide production for Japan.
- Mitsubishi Shipbuilding Co. Ltd.
- Mitsubishi Shipbuilding Co. Ltd. is a Japanese entity that Caixin mentioned as being placed on an export control list by China's Ministry of Commerce on February 24. This action effectively banned sales of dual-use items to firms China believes are involved in boosting Japan’s military capabilities.
- MP Materials Corp.
- MP Materials Corp. is an American rare earth producer that secured a contract with the U.S. Department of Defense in July 2025. This contract, valued at a minimum price of $110 per kilogram for Neodymium-Praseodymium (NdPr), aims to bolster domestic rare earth production in the United States.
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What Happened When
- 2011：
- JARE was established to provide Lynas with $250 million in loans and equity financing.
- 2022：
- JARE followed up with additional equity investments in Lynas.
- 2023：
- JARE made further equity investments to help expand Lynas’s production capacity.
- 2024：
- Japan reduced its overall reliance on Chinese rare earth supply from 90% to 58%.
- May 2025：
- Lynas became the first company outside China to commercially produce heavy rare earth dysprosium at its Malaysian facility.
- July 2025：
- U.S. Department of Defense signed a contract with MP Materials Corp., setting a price floor comparable to the Lynas deal.
- January 2026：
- China decided to strengthen export controls on certain items to Japan.
- Feb. 24, 2026：
- China's Ministry of Commerce placed 20 Japanese entities on an export control list, banning sales of dual-use items.
- March 5, 2026：
- Argus reported the U.S. spot price for NdPr at $120 per kilogram.
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