Japan Increases EV Subsidies to Promote Green Steel Usage

Japan EV

New Incentives to Drive Adoption of Environmentally Friendly Steel

Japan's Ministry of Economy, Trade and Industry (Meti) has announced an increase in electric vehicle (EV) subsidies starting April 1st, aiming to promote the use of green steel. The new measure will provide up to ¥50,000 ($321) in additional financial support, expanding the subsidy to a total of ¥900,000 per EV, depending on the model and size, if it is manufactured with green steel. The initiative is part of Japan's broader green transformation policy to reduce greenhouse gas (GHG) emissions.

Meti has secured a budget of ¥110 billion for the EV subsidy program. The main objective of this increase is not only to boost EV demand but also to support the domestic steel industry. Green steel, though more expensive to produce, has the same functionality as conventionally produced steel, which emits higher GHGs. Meti is addressing concerns among domestic steel producers, who fear the higher production costs of green steel may deter consumers.

Shifting Steel Production to Electric Arc Furnaces

Japan's steel industry is making efforts to reduce GHG emissions, especially through the transition to electric arc furnaces (EAFs). However, EAF plants require significant investment and face various technical challenges. Japan's largest basic oxygen furnace (BOF) producer, Nippon Steel, began commercial operations of an EAF in 2022, and JFE Steel plans to launch its own EAF by 2027. Additionally, Kobe Steel intends to replace one of its BOFs with an EAF facility by 2027.

Despite these advancements, the Japan Iron and Steel Federation (JISF) reported a 3.4% decline in EAF-produced crude steel in 2024, with EAF production accounting for 26.2% of the country’s total crude steel production.

Challenges in Boosting Green Steel Production and EV Sales

Although Meti's measures aim to increase green steel production, there are doubts about their effectiveness, given the sluggish performance of the domestic EV market. Sales of domestic passenger EVs in Japan plummeted by 33% in 2024, largely due to reduced demand for local EV brands. EVs accounted for only 1.5% of total passenger vehicle sales in Japan, down by 0.7 percentage points from the previous year. This decline raises questions about whether the increased subsidies will be enough to stimulate demand for both green steel and EVs.

China Lifts Anti-Dumping Tax on Japan's Stainless Steel

The Chinese government has officially removed anti-dumping duties (ADDs) on stainless steel product imports from Japan, effective immediately.

On July 22, China's Ministry of Commerce announced the abolition of ADDs on Japanese stainless steel exports, including steel slabs, hot-rolled stainless steel sheets, and hot-rolled stainless steel coils. These duties, ranging from 18.1% to 29%, were initially imposed in July 2019.

This decision follows a ruling by a World Trade Organization (WTO) dispute settlement panel in June 2023, which found that China's measures against Japan violated WTO regulations. The panel recommended that China "bring the measure into conformity," according to Japan's Ministry of Trade and Industry (Meti).

In 2019, Japan's stainless steel exports to China, including the products affected by the ADDs, amounted to approximately ¥70 billion ($448 million), with around ¥9 billion subject to the duties, Meti reported. Updated export data were not immediately available, according to a Meti official speaking to Metalnomist.

In 2023, Japan exported a total of 699,023 metric tonnes of stainless steel products globally, marking a 12.6% decline from the previous year, as reported by the Japan Stainless Steel Association. A detailed breakdown by country was not provided.

Japan's Non-Ferrous Metals Output Shows Mixed Trends for 2025

Copper

Japan's leading producers of non-ferrous metals project a mixed outlook for the October-March 2025 period, with zinc output expected to rise, while forecasts for copper production are varied. Recent data from major companies and the Ministry of Economy, Trade, and Industry (METI) highlights these trends, reflecting broader shifts in Japan's non-ferrous sector.

Zinc Production on the Rise, Copper Output Mixed

Mitsui Mining & Smelting, one of Japan's prominent zinc producers, forecasts a 5.9% increase in its zinc output, reaching 119,100 tons. The rise is attributed to expanded production capacity following regular maintenance conducted earlier this year between April and September. August data from METI supports this positive trend, showing a year-on-year increase of 8.8% to 34,191 tons in zinc production, marking the first growth in three months after a sharp 25.4% decline in July.

In contrast, the outlook for copper production is less straightforward. Sumitomo Metal Mining expects a robust recovery, projecting a 21.4% rise to 227,000 tons for October-March 2025. This rebound comes after planned large-scale maintenance at its Toyo plant in Ehime Prefecture, which had reduced output in late 2023. Similarly, Pan Pacific Copper, Japan's largest copper supplier, plans a 4.4% increase to 303,700 tons, indicating a positive trend in domestic copper production.

However, not all forecasts are optimistic. Mitsubishi Materials expects a 5.7% decrease in copper output, down to 196,578 tons, due to regular scheduled maintenance at its Naoshima plant in Kagawa Prefecture during the same period. Despite this, METI data shows that Japan’s electrolytic copper production has been rising consistently this year, with August output up by 4.7% year-on-year, marking seven consecutive months of growth.

These mixed projections underscore the complexity of Japan's non-ferrous metals sector, where varying maintenance schedules, production capacities, and external demand factors contribute to fluctuating output trends.

SMM and Rio Tinto Forge Ahead with Copper Project Joint Venture in Australia

Sumitomo Metal Mining

Sumitomo Metal Mining (SMM), a prominent Japanese metals producer, is poised to acquire a 30% stake in Rio Tinto’s Winu copper-gold project located in Western Australia's Pilbara region. The companies have signed a term sheet which includes a significant initial investment of $195 million by SMM.

Details of the Deal

The transaction, expected to close in the first half of 2025, marks a substantial step for SMM as it looks to bolster its copper production capabilities. The Winu project, still in the pre-feasibility and environmental approval stages, promises to significantly contribute to SMM’s long-term goal of producing 300,000 tons of copper annually. However, the specific timeline for when copper production will begin remains unclear, with further assessments of the project's output currently underway. The estimated combined resource volume stands at approximately 2.8 million tons.

SMM's strategic interest in the project extends beyond mere ownership; the firm also aims to offtake copper produced at Winu, with discussions about the volume and potential export scenarios ongoing. Exporting to Japan is considered highly likely.

Broader Context

This move aligns with broader Japanese governmental efforts to increase the country's base metal self-sufficiency, which is targeted to reach 80% by 2030. However, recent reports from Japan's Ministry of Trade and Industry (Meti) suggest that the strategy may be lagging behind its targets. To counter these challenges, Meti is enhancing support for domestic companies to expand their copper supply chains globally, including new initiatives in Africa and a strategic partnership with Peru to solidify copper procurement.

Sumitomo Metal Mining to Build Japan’s First Nickel Matte Plant

Sumitomo Metal Mining

Sumitomo Metal Mining (SMM), Japan’s leading metals producer, has announced plans to construct a 24,000 t/yr nickel matte plant in Miyazaki prefecture. The facility, to be built at SMM’s subsidiary Hyuga Smelting, marks a significant step in Japan's efforts to secure a domestic supply of critical battery materials. Construction is set to begin in 2025, with commercial operations expected between April 2027 and March 2028.

Nickel Matte: A Critical Link in Battery Material Supply

Nickel matte, a key intermediate product derived from ferronickel, is crucial for producing electrolytic nickel and battery-grade nickel sulphate, both essential for the growing lithium-ion battery sector.

Until now, SMM has relied on imports from its overseas subsidiaries for nickel matte. The new facility will enable the company to source this material domestically from Hyuga Smelting, reducing supply chain risks and enhancing Japan's resource independence.

The project has also garnered strong government support. On December 13, the Ministry of Economy, Trade and Industry (Meti) certified the initiative under its strategic plan to ensure a stable supply of critical metals for battery production. Meti will subsidize the project with ¥13.2 billion ($85 million), covering nearly half of SMM’s total investment of ¥28 billion.

SMM’s Vision for Nickel Production

The nickel matte plant aligns with SMM’s broader strategy to boost its production capacity for nickel products, including electrolytic nickel and nickel sulphate. The company aims to achieve a total annual output of 150,000 t of nickel products by 2030, further solidifying its role in the global battery materials supply chain.

Strategic Implications

As global demand for electric vehicles (EVs) surges, securing domestic production of key battery materials has become critical for nations worldwide. By building its first nickel matte facility, SMM is positioning Japan as a competitive player in the high-stakes race for battery-grade metals. This move also underscores the increasing importance of nickel in achieving sustainable energy goals and advancing EV technology.

Japan US Critical Minerals Cooperation Expands Into Deep-Sea Resources and Recycling

US, Japan critical minerals Cooperation

Japan US critical minerals cooperation is moving into a broader strategic phase as both countries seek more resilient supply chains for rare earths, copper, nickel, and battery materials. Japanese prime minister Sanae Takaichi and US president Donald Trump agreed to expand collaboration during a summit in Washington.

Japan US critical minerals cooperation now includes an initial agreement on deep-sea mineral development. The agreement covers resources such as rare earth-rich mud around Minamitorishima and manganese nodules, which could become alternative supply sources outside conventional land-based mining.

Japan US critical minerals cooperation also reflects a shared concern over China’s dominant position in rare earth separation and refining. Both governments are trying to combine Japanese technology, US regulatory frameworks, and private-sector investment to accelerate non-China supply options.

Deep-Sea Minerals Add a New Layer to Rare Earth Security

Deep-sea mineral development could become a strategic supply route for rare earths and other critical minerals. Japan has long studied rare earth-rich mud near Minamitorishima, while manganese nodules offer potential exposure to metals used in batteries, alloys, and advanced industrial systems.

The new working group between Japan’s trade and industry ministry Meti and the US Department of Commerce will focus on technical cooperation. This structure suggests both governments want to move beyond political statements and build practical project-level collaboration.

The industrial meaning is clear. Rare earth supply security depends not only on mining rights, but also on separation technology, environmental standards, financing, and downstream demand from magnets, EV motors, defense systems, and renewable energy equipment.

Recycling, Copper, and Nickel Projects Broaden the Supply Chain Agenda

The summit also highlighted private-sector initiatives that extend beyond deep-sea resources. Mitsubishi Materials is considering cooperation with ReElement Technologies on rare earth recycling in Indiana, targeting recovery from used magnets and other secondary sources.

This recycling angle is important because magnet scrap can become a strategic rare earth feedstock. It also reduces dependence on primary mining and supports a circular supply model for high-value elements such as neodymium, praseodymium, dysprosium, and terbium.

Mitsubishi is also advancing a feasibility study for the Copper World project in Arizona, where it holds a 30pc stake alongside Hudbay Minerals. The project aims to produce around 100,000 tonnes per year of copper from around 2029, strengthening North American copper supply for electrification, grids, and manufacturing.

Sumitomo Metal Mining’s plan to expand nickel matte production at its Hyuga smelter adds another battery materials dimension. Supported by Meti subsidies under Japan’s economic security framework, the project links Japanese refining capacity with battery material security for both Japan and the US.

The Metalnomist Commentary

The Japan-US agenda shows that critical minerals cooperation is no longer limited to mining deals. The real strategy is to connect deep-sea resources, recycling, copper projects, nickel refining, and government-backed industrial policy into one supply chain security framework.

🇺🇸 Japan’s Auto Industry Faces Crossroads Over US Tariff Strategy

🇺🇸 Japan’s

Tariff Pressures Stir Strategic Choices for Japanese Automakers

Focus Keyphrase: US auto tariffs impact on Japanese car industry

Japan’s automotive sector is at a critical juncture due to the 25% US import tariff imposed on April 3. Although the immediate impact has been muted, the industry is bracing for difficult decisions ahead.

The Ministry of Economy, Trade and Industry (Meti) reported on April 18 that Japanese carmakers haven’t yet seen significant fallout, thanks to existing inventories shipped before the tariffs took effect. However, manufacturers are now debating whether to pass on the cost to US consumers or absorb the losses.

Balancing Price and Demand

Raising prices risks dampening US demand — a major export destination accounting for over one-third of Japan’s vehicle exports. But absorbing the tariff costs would squeeze profit margins, especially for auto parts manufacturers, who are already under pressure to cut prices.

Meti’s survey noted growing concerns among component producers about production cuts if US demand falters. Japan Automobile Manufacturers Association chairperson Masanori Katayama hinted at production adjustments if the tariff persists.

Diplomatic Path Remains Murky

Japan and the US held ministerial talks on April 17, yet no clear resolutions emerged. Another round is planned this month. Still, analysts say the talks may stall unless the US addresses its auto trade deficit with Japan — a longstanding issue for former President Donald Trump, who has been vocal about the imbalance.

In 2024, Japan exported around 1.3 million passenger vehicles to the US, while importing only 23,000 US cars in 2023 — a stark contrast fueling trade friction.

Whether Japan’s carmakers cut production, raise prices, or find alternatives will shape the trajectory of its auto trade relationship with the US.

Japan’s Nittetsu Joins Canadian Firm to Develop Chilean Copper Mine, Eyes Increased Output by 2033

Nittetsu

Japanese metal producer Nittetsu Mining has entered into a 50:50 joint venture with Vancouver-based Camino Minerals to advance copper production through the Puquios Copper Project in Chile's Coquimbo region, Nittetsu announced on October 8. This initiative aligns with Nittetsu’s mid-term goal of producing 50,000 tonnes of copper annually by 2033, a strategic objective in Japan's effort to bolster base metal self-sufficiency amid rising global demand for copper.

Investment and Production Outlook Remain Under Wraps

Although specific investment figures and expected production volumes of crude ore and copper concentrate have yet to be disclosed, the Puquios project is estimated to yield about 15,000 tonnes of copper equivalent annually. Commercial operations are projected to begin after environmental approvals, a process that could take several years. Nittetsu Mining's general manager, Shinichiro Mita, emphasized that this partnership leverages the company's technical prowess and longstanding expertise in copper production, underscoring Nittetsu's commitment to expanding its role in the global copper market.

The Puquios development is Nittetsu’s latest move in Chile. The firm has also been working on the Arqueros copper project, backed by the Japan Bank for International Cooperation (Jbic). Production at Arqueros is anticipated to reach 15,000 tonnes per year between April 2026 and March 2027, mirroring Puquios’ forecasted output.

Government’s Strategic Drive for Self-Sufficiency

Japan’s government has been actively encouraging domestic firms to secure copper sources abroad to address its base metal deficit. The country’s energy strategy, updated in 2021, targets a base metal self-sufficiency rate of 80 percent by 2030, up from 50 percent in 2018. Despite these ambitions, Japan’s Ministry of Economy, Trade, and Industry (Meti) recently acknowledged that the target is not on track, though it withheld details on current self-sufficiency rates.

Nittetsu expects copper prices to hold a bullish trend in the long term due to sustained demand for the metal, particularly for decarbonization and electrification initiatives. However, the company has cautioned that short-term copper price volatility may increase due to fluctuating global market conditions.

Japan's Lithium Imports Drop Amid Slow EV Market in 2024

Lithium Mining

Decline in Lithium Carbonate Imports and Slight Increase in Lithium Oxide and Hydroxide

Japan has experienced a significant reduction in lithium carbonate imports in 2024, signaling a shift in the country’s energy and automotive sectors. While lithium oxide and hydroxide imports have seen a modest rise, the broader context of a sluggish global electric vehicle (EV) market has heavily influenced these changes.

Sharp Decline in Lithium Carbonate Imports

In 2024, Japan’s imports of lithium carbonate plunged by 40%, with a total of approximately 11,520 tons imported, according to data from Japan’s finance ministry. This represents a stark contrast to previous years when imports showed more consistent growth. Imports from Chile, the top supplier, saw a dramatic drop of 55%, with imports falling to about 5,143 tons. Argentina also experienced a decline in exports to Japan, falling by 5.6%, while Chinese imports dropped by 34%, totaling around 1,908 tons.

Increase in Lithium Oxide and Hydroxide Imports

On the other hand, Japan’s imports of lithium oxide and hydroxide showed a slight increase of 6% in 2024, reaching approximately 37,640 tons. A key contributor to this increase was a rise in imports from China, which edged up by 4.6%, amounting to about 32,354 tons. Interestingly, imports from Chile saw a significant uptick, rising to 1,872 tons, a notable increase from the 138 tons recorded in 2023. However, imports from the U.S. dropped by 24%, falling to 3,338 tons.

Declining EV Demand and Impact on the Domestic Market

Japan’s domestic electric vehicle market also faced challenges in 2024, with sales of passenger EVs falling by 33% due to weaker demand for local brand vehicles. According to preliminary data from industry associations, such as the Japan Automobile Importers Association (JAIA) and the Japan Light Motor Vehicle and Motorcycle Association, this drop in sales reflects broader trends in consumer preferences and economic conditions.

To stimulate the domestic EV market and boost the steel industry, Japan’s Ministry of Economy, Trade, and Industry (METI) announced plans to increase subsidies for EV purchases starting from April 2024. This initiative aims to encourage the adoption of electric vehicles and provide relief to Japan’s steel sector.

Japan's Iron Ore Imports Decline in July Amidst Weak Steel Demand

Decrease in Australian Supplies and Rising Concerns Over Steel Imports

Japan imported approximately 8.4 million tons of iron ore in July, marking an 8.6% decrease compared to the previous year due to reduced steel demand. Imports from Australia, Japan’s largest supplier, fell by 13.6% to 4.6 million tons, while shipments from Brazil increased by 8.9% to 3.1 million tons.

The decline in imports is attributed to weakened steel demand, particularly from the automotive sector. In June, orders for ordinary steel used in automobiles dropped by 10.4%, as reported by the Japan Iron and Steel Federation (JISF). This downturn is expected to persist through September due to ongoing production suspensions by some manufacturers, including Toyota.

Japanese steel producers are concerned about an influx of foreign steel, particularly from China. Imports of ordinary steel products from China surged by 43% from April to June, exacerbating worries about a demand-supply imbalance. Despite these concerns, Japan's Ministry of Economy, Trade, and Industry (Meti) is currently monitoring the situation without immediate plans for intervention.

Nissan Advances Electrification with New LFP Battery Plants in Kyushu

Nissan

Strengthening Japan's Position in the Global EV Market

Nissan, a leading Japanese automobile manufacturer, has announced plans to establish new lithium-iron-phosphate (LFP) battery plants in Kyushu, aligning with its aggressive electrification strategy. Set to begin construction during the fiscal year of April 2025 to March 2026, these facilities are a pivotal step in Nissan's commitment to enhancing its battery production capabilities and supporting the expanding electric vehicle (EV) market.

Financial Backing and Production Goals

The new plants are anticipated to start mass production in 2028-29, aiming for a production capacity of about 5 GWh per year. This initiative is supported by Japan's Ministry of Trade and Industry (Meti), which will provide a substantial subsidy of ¥56 billion ($359 million), covering approximately one-third of the total investment. This financial support underscores the government's commitment to fostering domestic battery technology advancements.

Nissan's Global Battery Strategy and Market Challenges

As part of its broader strategy to secure a global production capacity of 135 GWh per year by 2030-31, Nissan is focusing on strengthening its battery supply chain. The Kyushu plants are expected to contribute 10 GWh per year to this goal. However, Nissan faces challenges in the EV market, including a significant drop in net profit and a reduction in global car production capacity, which has affected its profitability and competitive stance.

Mazda to Establish 10GWh Lithium Battery Pack Plant in Japan

Mazda lithium battery

Mazda Motor has announced plans to construct a new lithium battery module pack plant in Yamaguchi, Japan. The facility will have an annual production capacity of 10GWh and will produce modules and packs for automotive cylindrical lithium-ion battery cells. These cells will be supplied by Panasonic Energy, a Japanese battery manufacturer.

Supporting Mazda's EV Platform

The battery packs produced at the new plant will be installed in Mazda's battery electric vehicles (BEVs) built on a dedicated EV platform and manufactured at Mazda's vehicle plant, also located in Japan. 

This move follows a partnership agreement established between Mazda and Panasonic in September 2024 for the supply of batteries for Mazda's upcoming BEVs, which are set to launch in 2027.  Their joint initiative, aimed at expanding battery production and advancing technology development, has received approval from Japan's Ministry of Economy, Trade and Industry (METI).

Japan’s Iron Ore Imports Drop in March Amid Weak Steel Demand

Iron Ore

March Iron Ore Imports Dip Despite Monthly Rebound

Japan's iron ore imports declined by 1.2pc year-on-year in March, reflecting weak steel demand and lower shipments from Brazil. The country imported 8.1mn tonnes of iron ore, although this marked a 28pc rise from February, according to preliminary finance ministry data.

The average import price was $102.20/t, down 17pc from the same month last year.

In yen terms, the price averaged ¥15,283, also a 17pc year-on-year decline, underscoring a softer raw materials market.

Brazil Shipments Fall Amid Weather and Maintenance Disruptions

Shipments from Brazil—Japan’s second-largest iron ore supplier—were disrupted by heavy rainfall and terminal maintenance. Brazil’s overall iron ore exports fell by 10pc year-on-year in February, reaching 24.5mn tonnes, the lowest level for that month since 2023.

Japan reportedly imported around 2.6mn tonnes from Brazil in March, but country-specific data will be confirmed later in April. The shortfall in Brazilian supply likely contributed to Japan’s reduced overall iron ore intake.

Domestic Steel Output Outlook Remains Sluggish

Japan's steel production is expected to fall by 4.9pc year-on-year in the April–June quarter. The trade and industry ministry (METI) projects steel output at 20.2mn tonnes, reflecting sluggish domestic demand in construction and manufacturing.

Lower steel production directly impacts iron ore requirements, weakening import volumes and softening global iron ore prices.

The Metalnomist Commentary

Japan's lower iron ore imports in March reflect a broader industrial slowdown and disrupted raw material flows. As steel production forecasts weaken, pressure mounts on iron ore prices and global supply chain predictability.

Japan and South Korea Prepare for Economic Impact of US Metal Tariffs

Japan Manufacturing

Japan Takes a Cautious Approach, While South Korea Moves Quickly to Shield Its Automotive Industry

The imposition of US tariffs on metal products has left Japanese and South Korean industries scrambling to mitigate potential damages. Following US President Donald Trump's announcement of sweeping tariffs, Japan’s metal firms are proceeding with caution. Tokyo is currently working on a strategy to strike a middle ground while preparing for any potential long-term effects. South Korea, on the other hand, has moved quickly to put measures in place to support its automotive industry, which stands to be significantly impacted by the tariffs.

Japan's Response to US Tariffs

In 2024, Japanese exports of machinery and electrical equipment to the US amounted to ¥7.8 trillion ($53 billion), reflecting a 5.3% increase from the previous year. Despite this growth, Japan's metal industry is not experiencing significant immediate impact from the new 24% tariffs imposed on steel and automobile products. However, companies are still closely monitoring the situation to understand the full extent of the potential damages. While some industry leaders remain uncertain, one Tokyo-based battery material producer noted that no damage had been reported yet from clients. Still, Japanese authorities are wary of long-term effects, especially in sectors like electronics and automotive, which would face major setbacks should the tariffs persist.

The Japanese government is refraining from retaliatory measures as negotiations with the US government continue. Japan hopes to reach an agreement that could either reduce the tariffs or potentially exempt the country from them entirely. On April 8, Japan’s Ministry of Trade and Industry (METI) will hold a ministerial meeting to discuss comprehensive measures in response to the tariffs.

South Korea Takes Swift Action to Support Its Economy

South Korea, with a more direct approach, is preparing to unveil measures aimed at mitigating the negative effects on its automotive sector. In 2024, South Korea exported $127.8 billion in goods to the US, including nearly $34.7 billion worth of passenger automobiles, $7 billion in auto parts, and nearly $3 billion in lithium-ion batteries. With such significant exports to the US, the potential impact of these tariffs could be severe.

The South Korean government, led by acting president Han Duck-soo, has vowed to work with the private sector to minimize damage. The government is planning follow-up measures to protect vulnerable sectors, such as small-medium enterprises and mid-sized companies. However, the country’s political instability, with the impeachment of former president Yoon Suk Yeol, may delay the response. South Korea’s aluminium sector is also on high alert, with companies looking to devise strategies to weather the storm.

Additionally, South Korean tech giant LG Electronics has warned that any further escalation in tariffs could have a pronounced impact on its operations, especially if the US introduces import quotas or safeguard measures. The company’s major production sites are spread across South Korea, China, Mexico, and Vietnam. LG's CFO, Changtae Kim, emphasized that higher tariffs would directly affect the company’s competitive position.

Looking Ahead

Both Japan and South Korea face uncertain futures as they navigate the complex landscape of US tariffs. Japan remains cautious, hoping for negotiations to alleviate the pressure, while South Korea moves swiftly to protect key sectors like automotive manufacturing. The coming weeks will be crucial in determining how both nations adapt to the evolving trade situation and whether their efforts to shield their industries from the tariffs will be successful.

Japan Invests in French Rare Earths to Diversify Supply Chain

Iwatani

Jogmec and Iwatani to secure dysprosium and terbium from France by 2027

Japan is expanding its rare earth supply base through a strategic investment in France. On 17 March, Japan’s state-owned energy agency Jogmec and metals trading firm Iwatani announced a joint investment of up to €110 million ($120 million) in Lyon-based rare earths company Caremag.

Rare earth supply to start by 2027

Under the agreement, Iwatani will secure term contracts for around 250t/year of dysprosium and 45t/year of terbium. Jogmec said these quantities represent about 20% of Japan’s projected heavy rare earth (HRE) demand. Deliveries are expected to begin as early as 2027, assuming Caremag starts operations in late 2026.

Caremag plans to process both recycled magnets (2,000t/year) and raw ore (5,000t/year) at a new facility in the Lacq industrial zone in southwestern France, according to Japan’s Ministry of Economy, Trade and Industry (Meti).

Japan pursues supply diversification strategy

Tokyo continues efforts to reduce reliance on China, which dominates the global rare earths market. Jogmec emphasized the importance of diversifying rare earth sources for permanent magnets—classified as strategically critical since 2022.

In 2023, Jogmec and Sojitz also invested in Australia-based Lynas Rare Earths, securing 65% of its dysprosium and terbium output. The new partnership with France aligns with the broader bilateral "Japan-France Declaration on Cooperation in the Field of Critical Minerals," signed in May 2024.