Japan Tungsten Plant to Cut Sumitomo Electric’s Reliance on China

Sumitomo Electric

Japan tungsten plant investment by Sumitomo Electric Industries will expand domestic tungsten powder capacity and strengthen Japan’s critical mineral supply chain. The company plans to build a new facility in Toyama city with about ¥15.9bn, or $100mn, in investment.

The new plant will be operated by group company Allied Material and is scheduled to start operations in the first half of fiscal 2028. Sumitomo Electric said the project will expand its tungsten supply capacity by around 50%.

Japan tungsten plant development matters because tungsten is essential for cemented carbide cutting tools, semiconductors, electronic components and advanced industrial manufacturing. The investment also reflects Tokyo’s wider effort to reduce exposure to China-dominated critical material supply chains.

Tungsten Powder Capacity Supports High-End Manufacturing

The Toyama facility will expand production capacity for tungsten powder near Sumitomo Electric’s existing plant. The company has not yet disclosed the precise capacity of the new line.

Tungsten powder is a key input for cemented carbide tools used in metal cutting and precision machining. These tools support automotive, aerospace, electronics, machinery and industrial equipment production.

The material also has strategic relevance in semiconductors and electronic components. This makes tungsten more than a tooling metal; it is part of the materials base behind advanced manufacturing and technology supply chains.

Japan Backs Domestic Recycling and Supply Security

The Japanese government will cover about ¥7.5bn of the investment through a subsidy aimed at securing critical mineral supply chains. This public support shows that tungsten is now treated as a strategic industrial material.

Global tungsten supply remains heavily dependent on China. Sumitomo Electric said it currently relies on China for about 30% of its tungsten imports.

The new Japan tungsten plant will help the company strengthen its domestic recycling system and gradually reduce that dependence. Recycling will be especially important because secondary tungsten can improve supply resilience without relying only on new mined material.

The Metalnomist Commentary

Sumitomo Electric’s investment shows that tungsten security is becoming a manufacturing competitiveness issue. Japan is not only adding capacity; it is building a recycling-backed buffer for cutting tools, semiconductors and advanced components.

Stardust Power Secures 10-Year Lithium Supply Deal with Sumitomo

Stardust Power

Sumitomo's US Subsidiary Signs Agreement for Up to 25,000 Metric Tonnes of Lithium Carbonate Annually

In a significant move for the lithium supply chain, Sumitomo's US subsidiary has entered a 10-year nonbinding agreement with Stardust Power, a prominent lithium producer. The deal will see Sumitomo secure up to 25,000 metric tonnes per year (mt/yr) of lithium carbonate, a vital component for battery production, with an initial volume of 20,000 mt/yr.

Details of the Agreement and Supply Terms

Under the terms of the agreement, Sumitomo will initially receive 20,000 tonnes of lithium carbonate annually from Stardust's first production line. The volume could rise to 25,000 tonnes per year, depending on production capacity. Stardust began construction of its refinery in Muskogee, Oklahoma, in January, signaling that the first phase of production is underway.

The contract will come into effect once Stardust’s production meets the necessary qualifications for sale to Sumitomo's customers. Sumitomo also holds the option to extend the agreement for an additional five years, contingent on mutual agreement between the two companies.

Pricing and Future Prospects for Lithium Supply

The pricing for the lithium carbonate will be based on spot market rates, as reported by price agencies, with potential adjustments to meet specific customer requirements. Additionally, before producing battery-grade lithium, Stardust will supply technical-grade lithium in annual volumes or up to Stardust's production capabilities, ensuring a steady flow of material during the transition period.

This deal not only strengthens the supply chain for lithium, crucial in electric vehicle and energy storage applications, but also positions both companies for future success in the growing global market for lithium-based products.

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.

Queensland vanadium electrolyte plant investment backs Australia’s flow battery ambitions

Queensland Vanadium Plant

Queensland vanadium electrolyte plant investment signals a stronger push into long duration energy storage in Australia. The state government has committed A$10mn to Vecco’s Julia Creek mine and Townsville vanadium electrolyte plant. As a result, the Queensland vanadium electrolyte plant investment aims to anchor a domestic supply chain from ore to vanadium redox flow batteries.

Queensland vanadium electrolyte plant investment will support Australia’s first commercial scale electrolyte facility in Townsville. Vecco plans to build a 300 MWh per year plant starting in 2026, with operations targeted for 2028. This will scale up from its existing 35 MWh per year Townsville unit, which already produces vanadium electrolyte. Therefore, Vecco can leverage operational experience as it ramps to larger industrial volumes.

Julia Creek mine links vanadium ore to battery electrolyte

The Julia Creek mine forms the resource backbone of the Queensland vanadium electrolyte plant investment. Vecco plans to open the 8,700 t per year vanadium pentoxide operation in 2027. The mine will supply feedstock directly to the larger Townsville electrolyte plant, closing the loop between mining and chemicals.

This integrated structure reduces reliance on imported vanadium intermediates and marketing risk. Meanwhile, it supports Australia’s broader critical minerals strategy focused on value added processing, not just ore exports. Over the life of the project, Vecco aims to position Julia Creek as a stable source for flow battery grade vanadium.

Queensland vanadium electrolyte plant investment also fits into a wider end to end supply chain vision. Vecco, Sumitomo Electric and Idemitsu Australia signed a 2024 agreement to develop and sell vanadium redox flow batteries. Therefore, vanadium units from Julia Creek could ultimately flow into installed energy storage systems across Australia.

Building a regional hub for vanadium redox flow batteries

Queensland is using the Queensland vanadium electrolyte plant investment to establish Townsville as a vanadium processing hub. Since 2021, the state has been developing a shared use vanadium processing facility to support smaller miners. This shared infrastructure should lower entry barriers and encourage more junior projects to progress.

At the same time, the Townsville electrolyte plant will target utility and industrial scale storage markets. Vanadium redox flow batteries offer long cycle life and deep discharge, which suit grid firming and renewable integration. However, they require secure supplies of high purity vanadium electrolyte to remain competitive with lithium ion systems.

Queensland’s support for Vecco, alongside Japanese partners, strengthens cross border industrial ties. It also diversifies vanadium production away from traditional suppliers in China, Russia and South Africa. As a result, the Queensland vanadium electrolyte plant investment could reshape regional vanadium trade and pricing dynamics over time.

The Metalnomist Commentary

This move shows how relatively modest public capital can unlock strategic value in long duration storage supply chains. By backing integrated mining and electrolyte production, Queensland improves the bankability of vanadium redox flow projects and attracts Japanese technology partners. Market participants should watch how fast offtake and project pipelines grow, as this will determine whether Townsville becomes a genuine Asia Pacific hub for vanadium battery materials.

Indium Phosphide Exports Become China’s New Chokepoint in AI Data Centre Supply Chain

AI data centre

Indium phosphide exports have become a strategic pressure point in the global AI data centre supply chain as China’s licensing controls delay shipments of a material essential for high-speed optical chips. The restrictions are exposing a new vulnerability in AI infrastructure: the physical materials behind silicon photonics and optical interconnects.

The issue has moved quickly from a specialist semiconductor concern to a high-level trade and industrial policy problem. Coherent, a key optical components supplier backed by Nvidia, warned in early May that indium phosphide shortages were already affecting the market. Its chief executive then joined a US business delegation to China as companies sought relief from export licence delays.

Indium phosphide exports matter because AI data centres are moving beyond copper-based interconnects. As AI workloads grow, hyperscalers need faster, lower-latency and more energy-efficient data transmission between processors, accelerators, switches and optical modules. Indium phosphide is one of the core materials enabling that shift.

The material is used in high-speed optical chips, lasers, detectors and photonic components. These devices support the optical links that move huge volumes of data across AI clusters. Without reliable indium phosphide substrates and wafers, the expansion of advanced AI data centre networks could slow.

China’s control over indium phosphide exports shows that critical materials policy is becoming more granular. Beijing no longer needs to restrict only rare earths or finished technology products. It can also influence upstream compounds, substrates and wafers that determine whether advanced semiconductor supply chains can scale.

Export Controls Expose a Hidden Bottleneck in Silicon Photonics

Silicon photonics has become a critical technology for AI infrastructure because it allows data to move through light rather than electrical signals. This reduces energy use per bit and supports the bandwidth required by large AI systems.

But silicon photonics is not only a silicon story. The most advanced optical systems often require compound semiconductor materials such as indium phosphide, gallium arsenide, gallium nitride and germanium-based compounds. Indium phosphide is especially important for lasers and high-speed optical devices.

This creates a difficult supply chain problem. AI companies, hyperscalers and chipmakers are racing to scale optical modules, but one of the key substrate materials remains highly concentrated. China is the world’s largest indium producer, accounting for about 70% of global output in 2024.

That concentration became more serious after China introduced export restrictions on indium phosphide in February 2025. Since then, licence delays have created backlogs for companies that manufacture or source InP substrates from China.

AXT, one of the world’s largest indium phosphide substrate producers and a major supplier to Coherent, said export permits were its most significant challenge. The company manufactures most of its InP substrates in China and only received its first permits last June. It still faces a large order backlog.

The effect has spread beyond individual suppliers. Coherent, Lumentum, VPEC and LandMark Optoelectronics all sit inside the optical components ecosystem that depends on reliable substrate supply. When permit delays hit upstream InP material, the impact moves through wafers, chips, optical modules and AI data centre equipment.

Prices show the severity of the shortage. Since China introduced export restrictions, the average price of a 6-inch indium phosphide wafer has surged by 250% to about $5,000. That price increase reflects both physical scarcity and the strategic premium attached to non-disrupted supply.

The supply squeeze also comes at a time of aggressive photonics investment. Nvidia announced $2bn investments each in Coherent and Lumentum in March. Marvell Technology also moved into photonics through its acquisition of Celestial AI, reflecting stronger demand for optical technology in AI computing.

These investments show where the industry is heading. AI infrastructure needs optical interconnects to manage power, latency and bandwidth. But China’s indium phosphide controls mean that materials availability could become a gating factor for deployment.

Companies are trying to respond. Coherent plans to double its InP wafer capacity at its Texas plant this year and more than double it again by the end of 2027. US photonics firms are also seeking supply from non-Chinese producers such as Sumitomo Electric Industries.

However, capacity additions are slow. New substrate plants can take two to three years to bring online. Qualification cycles are also long because optical chipmakers cannot easily switch substrate suppliers without testing performance, reliability and consistency.

This makes the shortage difficult to solve quickly. Even if new capacity is announced, it may not arrive fast enough to meet near-term AI data centre demand. Meanwhile, many non-China producers already consume part of their own output internally, reducing the amount available to the broader market.

China’s Materials Chokepoint Strategy Strengthens Domestic Producers

China’s indium phosphide export controls are creating both pressure and opportunity. They restrict global supply, but they also support domestic Chinese substrate producers that are expanding capacity.

Yunnan Germanium, Guangdong Xiandao and Zhuhai Dingtai Xinyuan are among China’s leading domestic InP substrate players. Their role is becoming more important as Beijing uses materials controls to strengthen strategic leverage across semiconductor and AI supply chains.

Yunnan Germanium has already moved to expand. The company announced a 189mn yuan investment in April to raise production capacity to 450,000 single InP wafers annually. Its shipments of InP wafers rose by 74% in 2025, showing fast domestic market growth.

Guangdong Xiandao is also expanding through its subsidiary Guangdong Xianrui. The project is expected to produce 40 t/yr of indium phosphide crystals, which are used as raw material for substrates.

These investments fit a broader pattern. China is not only defending control over upstream critical materials. It is also building downstream processing capacity in higher-value compound semiconductor materials.

However, Chinese producers may not immediately solve the global shortage. Some are still seeking export approvals, and any overseas shipments may be limited. Domestic demand remains a priority, especially as China builds its own AI, optical communications and semiconductor ecosystem.

AXT

Supplier qualification creates another barrier. Companies such as Coherent and Lumentum are unlikely to switch easily from established suppliers. Coherent relies heavily on AXT, while Lumentum sources mainly from Sumitomo and JX Advanced Metals. New suppliers must pass demanding qualification cycles before they can enter critical optical chip supply chains.

This gives China’s export controls a long-lasting effect. Even if alternative suppliers exist, the market cannot instantly redirect demand. The bottleneck is not only production volume. It is qualified, high-quality, customer-approved substrate supply.

The strategic lesson is clear. AI supply chains are not only exposed to advanced chips, GPUs and packaging capacity. They also depend on a deep materials stack that includes indium, phosphorous chemistry, InP crystals, substrates, wafers, lasers, detectors and optical modules.

This is why indium phosphide exports have become so important. AI data centre buildouts need more optical links as clusters grow larger. Copper interconnects face limits in speed, distance and energy consumption. Photonics offers a solution, but only if the materials chain can scale.

For the US and its allies, the response will likely require more than emergency licence negotiations. It will require investment in indium recovery, InP crystal growth, substrate manufacturing, wafer capacity and long-term offtake agreements. It may also require strategic stockpiles for high-purity indium and compound semiconductor substrates.

The issue also strengthens the case for recycling and secondary recovery. Indium is often produced as a by-product, making primary supply difficult to expand quickly. Recovering indium from industrial scrap, displays, semiconductors and related waste streams could become more important if export controls persist.

For AI data centre developers, the risk is timing. Demand for optical modules is accelerating now, while new ex-China capacity may not fully arrive until 2027 or later. That mismatch could raise costs, delay deployments and intensify competition for qualified photonics suppliers.

The market may therefore see a split. Companies with secured InP supply will be better positioned to support hyperscaler demand. Companies exposed to licence delays, qualification bottlenecks or spot-market wafers may face higher costs and delivery risk.

The Metalnomist Commentary

China’s control over indium phosphide exports shows that the AI race is becoming a materials race. The next bottleneck may not be only GPUs or power supply, but the compound semiconductor substrates needed to move data fast enough inside AI clusters.

Nano One Secures Funding from Quebec Government for LFP Cathode Production

Nano One

In a significant boost for the Canadian battery materials industry, Nano One Materials Corp has been granted C$18 million ($12.7 million) by the government of Quebec to enhance its production capabilities of lithium iron phosphate (LFP) cathodes. This development marks a critical step forward in the company's growth and in the expansion of sustainable battery technologies in North America.

Expansion of Production Capacity

Nano One, which commissioned a 200 metric tonne per year piloting line in 2023 in Candiac, Quebec, plans to use the newly acquired funds to pilot and expand its LFP cathode active material production capacity. The strategic investment by the Quebec government underscores the province's commitment to fostering innovative technologies and sustainable industries. With plans to increase its production capacity in 2025 and 2026, Nano One is poised to play a pivotal role in the supply chain for electric vehicles and energy storage solutions.

Strategic Partnerships and Funding

The funding from Quebec is not the only financial backing Nano One has received recently. The US Department of Defense also granted the company $12.9 million in September to support its initiatives. Additionally, major mining companies Sumitomo Metal Mining and Rio Tinto each hold up to a 5% stake in Nano One, highlighting the significant industry confidence in the company's technology and business model.

These collaborations and financial injections are instrumental in advancing Nano One's capabilities in producing high-quality, efficient battery components critical for the burgeoning electric vehicle market and renewable energy sectors.

Phoenix Tailings Raises $76M to Launch First US Standalone Rare Earth Metals Plant

Phoenix Tailings

Phoenix Tailings rare earth plant to meet US defense demand

US-based startup Phoenix Tailings has raised $76 million in Series B funding to build a rare earth metals plant in New Hampshire. The Exeter facility will be the first standalone US rare earth refinery capable of producing finished metals directly from diverse feedstocks. Once fully operational, the site will have a 500t/yr production capacity—matching the entire annual demand of the US defense sector.

Exeter facility to refine key rare earth elements for magnet manufacturers

Initial output from the Phoenix Tailings rare earth plant will start this summer at 200t/yr, ramping up to 500t/yr in time. The facility will produce neodymium-praseodymium, ferro-dysprosium, dysprosium, and terbium—all essential for permanent magnets used in defense, electric vehicles, and medical devices. It will process feedstocks from mines, coal ash, recycling streams, and other industrial byproducts, offering flexible sourcing.

Global investors back strategic US supply chain expansion

The oversubscribed $76 million Series B round was led by Envisioning Partners of Korea and included Escape Velocity, Builders Vision, Yamaha Motor Ventures, M Power, and Sumitomo’s Presidio Ventures. This strong international investor support highlights the growing urgency to establish domestic rare earth supply chains. Phoenix Tailings already runs a 40t/yr commercial facility and sources concentrates from allied nations.

The Metalnomist Commentary

The Phoenix Tailings rare earth plant represents a major step in reshoring critical mineral processing to the US. Its feedstock flexibility and defense-aligned production profile could reduce dependence on China’s REE dominance. This deal also shows that global capital is actively fueling secure and resilient rare earth value chains.

Chile Projects $83.2 Billion in Mining Investments Through 2033

Chile mining

Chile is poised to solidify its position as a global mining powerhouse with projected investments of $83.2 billion spanning 2024-2033.

Massive Investments in Mining Projects

The Chilean Copper Commission (Cochilco) unveiled its latest study highlighting a significant increase in mining investments for the coming decade. The forecast includes 51 mining projects, up from 49 in the previous study for 2023-2032, which projected $65.7 billion in investments. This growth signals Chile's commitment to bolstering its mining sector and enhancing its global competitiveness.

Key players in Chile's mining expansion include major domestic entities like El Abra, Antofagasta, and state-run copper miner Codelco, which collectively account for 64.5% of the total investment. International stakeholders are also playing a vital role:

• Canadian companies such as Teck, Capstone Copper, Los Andes Copper, and Kinross will represent approximately 10% of investments.
• Japanese corporations, including Sumitomo Metals and Mitsubishi Corp, will contribute 5.7%.
• Australian firms, spearheaded by BHP Billiton, will make up 5.2%.

Copper Production and Diversification

The influx of capital is projected to increase Chile’s copper production capacity by 2.23 million metric tonnes annually, adding to the 5 million tonnes produced in 2023, according to the US Geological Survey (USGS). This aligns with Chile’s status as the world’s largest copper producer.

Additionally, $4.7 billion of the investments will be allocated to 15 projects focusing on "metals other than copper," including lithium and gold. Chile already ranks as the world's second-largest producer of lithium, a critical material for batteries and renewable energy storage.

Driving Forces Behind the Investment Surge

This investment boom highlights Chile’s strategic approach to capitalizing on the global demand for essential minerals. Increased copper production will cater to infrastructure and green energy projects worldwide, while lithium investments target the surging electric vehicle and renewable energy sectors.

Cochilco’s report emphasizes the country’s appeal to global mining giants and underscores Chile’s robust regulatory framework and resource-rich landscape as key factors driving foreign investment.