Japan to Begin Seabed Rare Earth Extraction in 2024, Diminishing Dependence on China

Bulldozers scoop soil containing various rare earths to be loaded on to a ship at a port in Lianyungang, in east China's Jiangsu province, on Sept. 5, 2010. STR/AFP via Getty Images

In a strategic shift to mitigate its reliance on China, Japan plans to extract rare earth elements from the Pacific Ocean seabed this year. The initiative has emerged as rare earth elements gain increasing importance in technological advancements. Historically, China has leveraged these elements as a geopolitical instrument against major economies like the United States, Japan, and the European Union.

In late 2023, the Japanese government finalized its decision to begin pilot mining operations in the Pacific. The initiative was initially delayed by a year due to procurement challenges. The outbreak of the Russia–Ukraine conflict redirected a British firm’s focus, previously tasked with producing “mud-lifting pipes” for Japan, toward manufacturing military equipment.

On Dec. 21, in a significant move, the Chinese Communist Party (CCP) imposed stringent new regulations, barring the export of advanced rare earth magnets and associated technologies. This action, perceived as a direct response to heightened geopolitical tensions, particularly targets the United States, Japan, and the European Union.

Concurrently, China’s Ministry of Commerce and Ministry of Science and Technology issued an updated “Catalogue of Technologies Prohibited and Restricted from Export by China.” This revision, an expansion of the 2020 edition, focuses on high-tech sectors pivotal in the United States–China tech rivalry. It lays out comprehensive technical specifications and bolstered export restrictions.

Key additions to the export prohibition list include technologies related to rare earth refining, processing, and utilization. The restricted export list now features ion-type rare earth ore leaching processes, as well as mining, beneficiation (the treatment of raw material in preparation for smelting), and smelting technologies for rare earths, inclusive of synthesis processes and formulas for rare earth extractants, and metal material modification technologies using rare earths.

Moreover, on July 3, China’s Ministry of Commerce and General Administration of Customs announced impending export curbs on gallium and germanium, effective Aug. 1. These metals are critical to the production of high-end semiconductors, 5G devices, and solar panels.

Last year saw heightened U.S. restrictions on high-tech semiconductor exports to China, particularly after the incident involving a CCP spy balloon in U.S. airspace. Notably, just days before U.S. Treasury Secretary Janet Yellen’s July visit to Beijing, China declared its new controls on vital semiconductor metals, marking a fresh phase of tactical measures against the United States and its allies, including Japan. This announcement closely followed U.S. Secretary of State Antony Blinken’s trip to Beijing.

CCP Sanctions: A Double-Edged Sword in the Rare Earths Arena

Industry insiders assert that the CCP’s grip on gallium and germanium might backfire. Should these elements become scarce, their prices are expected to surge, potentially encouraging other nations to commence production. This scenario depicts China’s current dominance as a transient show of strength, likely to be counterbalanced by market dynamics over time.

In a strategic countermove, the United States has rallied support from Japan and the Netherlands. This collaboration led to a significant announcement from ASML, a Dutch tech giant known for producing top-tier chip lithography machines. On June 30 of last year, ASML declared it would limit the export of specific products, aligning with the U.S.-led stance.

The CCP’s stringent controls over gallium, germanium, and rare earths have triggered a robust response from the United States, further deepening the technological and industrial divide between the United States, Japan, and China.

Presently, the United States is ramping up its mining initiatives, while Japan is actively pursuing seabed mining in the Pacific. Both nations are focused on establishing independent rare earth supply chains. Data from the United States Geological Survey (USGS) indicates a decline in China’s dominance in rare earth production, dropping from 90 percent in 2010 to 70 percent in 2022.

The United States possesses the technology to process rare earths, but has historically opted for imports due to environmental concerns. This choice led to a dearth of domestic refining facilities and expertise. Meanwhile, China advanced its technological capabilities in this sector. The CCP is now leveraging not only the rare earths themselves but also their production technology against Western powers.

A pivotal incident occurred on Sept. 7, 2010, when a Chinese fishing vessel collided with a Japanese Coast Guard ship near the Senkaku Islands (known as the Diaoyu Islands in China), resulting in the temporary detention of the Chinese vessel by Japan. In response, the CCP imposed a temporary ban on rare earth exports to Japan.

Japan, reliant on China for approximately 60 percent of its rare earth imports, was compelled by this embargo to seek independence through domestic mining initiatives.

Location and Method of Japan’s Rare Earth Mining

Japan’s designated site for trial mining falls within its Exclusive Economic Zone, located about 1,848 kilometers (about 1,148 miles) from Tokyo, near Minami Torishima island.

Minami Torishima, positioned at 24°18’N latitude and 153°58’E longitude, encompasses an area of 1.51 square kilometers. This island, the easternmost sea territory of Japan, falls under Tokyo’s jurisdiction. Currently, it hosts around 20 personnel from the Japan Maritime Self-Defense Force and its Meteorological Agency, undertaking defense and meteorological observation duties.

Research by the University of Tokyo and others has revealed that the seabed mud surrounding Minami Torishima, approximately 6 kilometers (about 3.73 miles) deep, is rich in rare earth elements, potentially sufficient to fulfill global demands for centuries.

The “Chikyu,” a Japanese seabed research vessel, will be deployed for the trial mining. This operation involves inserting a “mud-lifting pipe” into the seabed at a 6-kilometer depth to extract the mud, with a daily extraction capacity of about 70 tons.

Global Rare Earth Reserves and the Intensifying Rare Earth Battle

The 2022 report by the United States Geological Survey estimates global rare earth reserves at 120 million tons. While China boasts significant reserves, other nations like Vietnam (22 million tons), Brazil and Russia (21 million tons each), India (6.9 million tons), Australia (4 million tons), the United States (1.8 million tons), and Greenland (1.5 million tons) also contribute notably to the global tally.

Historically, the production of rare earths has shifted across continents. Before 1948, India and Brazil, with their placer deposits (natural concentrations of heavy minerals caused by wind, running water, and gravity) were the primary sources. The 1950s saw a shift to South Africa, followed by the United States, particularly the Mountain Pass mine in California, leading the way from the 1960s through the 1980s.

China then scaled up its mining operations, responding to the burgeoning market demand. Despite holding only 23 percent of the world’s total reserves, China dominated production, accounting for 81 percent in 2017 and supplying more than 85 percent of the global demand for 17 rare earth elements in 2019 (with half of the ore sourced from Myanmar). Australia currently stands as the world’s second-largest producer, contributing 15 percent to the global output.

The CCP’s export controls, coupled with soaring global demand, have turned rare earth elements into scarce and coveted commodities, driving up prices and cementing their status as strategic resources on the international stage.

In September 2009, the CCP declared a reduction in rare earth export quotas to 35,000 tons annually for 2010–2015. This was followed in September 2011 by a production cut and the closure of three out of eight major mines. These actions prompted the United States, Japan, and the European Union to challenge China’s quotas through the World Trade Organization (WTO), alleging violations of WTO rules.

Further tightening in August 2012 led to a 20 percent production cut, which resulted in a collective WTO complaint from the United States, Japan, and the EU. The WTO, on Aug. 29, 2014, ruled that China’s actions breached free trade agreements. Consequently, on Jan. 5, 2015, the WTO demanded China abolish all rare earth export quotas.

The CCP has long wielded rare earths as a strategic tool to exert influence over the United States, Japan, and the European Union.

Japan’s potential success in exploiting the substantial rare earth deposits in the Pacific seabed could significantly disrupt the current dynamics. Not only would this alleviate the global rare earth shortage, but it would also diminish the CCP’s leverage over key international players, particularly the United States and Japan, in the rare earth domain.