Highlights

• Japan allocated ¥39 billion (~$250M) via JOGMEC to diversify rare earth supply chains.
• This allocation is a response to China's export controls.
• Japan's allocation is modest compared to:
  • U.S.: $2B+ initially in Australia deal alone
  • Australia: $1.3-2.6B+
  • EU: investments running into billions
• Funding targets overseas mining and smelting co-investments.
• Japan's strategy echoes the post-2010 diversification playbook.
• Japan's efforts lack midstream ambition (separation, metals, magnets).
• This approach is needed to address global supply bottlenecks.
• Japan's move indicates diversification intent amid geopolitical pressure.
• The scale of the investment underwhelms—real resilience requires capital flowing beyond upstream equity into processing and manufacturing capacity.

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Tokyo is moving again on rare earth security—but the scale matters. On January 20, Japan announced (opens in a new tab) it will allocate ¥39 billion to diversify rare earth supply chains in response to China’s tightening export controls on dual-use goods, potentially including rare earth elements. The funding will flow through Japan Organization for Metals and Energy Security (JOGMEC), which will co-invest with Japanese companies in overseas mining and smelting projects. An additional ¥2 billion will support Japan’s fishing industry amid China’s import suspension.

The Numbers, in Context

• ¥39 billion ≈ USD ~$250 million
• ¥2 billion ≈ USD ~$13 million (fisheries support; not minerals).

For investors and policymakers, the headline isn’t just the yen figure—it’s how modest this commitment looks when benchmarked against peers.

How Japan Compares

United States

Since 2020, U.S. federal commitments tied to rare earths and critical minerals—across DoD Title III awards, DOE processing grants, and Inflation Reduction Act programs—run into the low single-digit billions of USD. Individual tranches (e.g., separation, magnet manufacturing, processing pilots) often exceed $100–300 million per award cycle, with cumulative support well north of Japan’s $260M for rare earths alone. The U.S. and Australia signed an $8.5 billion critical minerals deal in October 2025, committing at least $1 billion each (totaling $2 billion initially) to fast-track mining and processing projects, aiming to diversify supply chains away from China for minerals vital to defense and tech, including rare earths, by accelerating development and establishing price floors. The agreement creates a significant investment pipeline for resources valued at $53 billion, boosting U.S. access to Australia's strategic minerals through joint ventures and streamlined permits, with a focus on Alcoa's gallium project as a key priority. 

Australia

Canberra has paired A$2–4 billion+ (USD ~$1.3–2.6B) in financing, loans, and equity-style support (via agencies like Export Finance Australia and the Critical Minerals Facility) with state-level backing. Australia’s approach emphasizes mine-to-midstream capability and anchor offtake agreements—again, multiples of Japan’s new allocation.

Europe (EU)

Through the Critical Raw Materials Act (CRMA), EIB financing, and national co-funding, Europe’s mobilization is fragmented but larger in aggregate, spanning several billion euros across mining, refining, recycling, and magnet projects. Execution remains uneven, but the headline capacity exceeds Japan’s latest move.

What’s Notable—and What’s Missing

What’s notable: Japan’s strategy is targeted and pragmatic—co-investing via JOGMEC to secure overseas mines and smelting, echoing the playbook that once anchored Japan’s post-2010 rare earth recovery (e.g., diversification away from sole reliance on China). Note also that Japan secures a considerable supply from Lynas Rare Earth (Australia/Malaysia).

What’s missing: Scale and midstream ambition. $250M is meaningful for pilots and minority stakes, but insufficient to materially shift global dysprosium/terbium or NdPr bottlenecks without parallel investments in separation, metals, and magnets.

Bottom Line

Japan’s ¥39B is a signal, not a solution. It reinforces diversification intent amid China’s trade pressure, but—relative to U.S., Australian, and European efforts—it underwhelms on scale. For real resilience, capital must follow the chemistry: midstream capacity, not just upstream equity.

Source: Jiji Press (Jan. 20, 2026).