Japanese Prime Minister Sanae Takaichi has been reelected as the country’s leader, and she is seeking to strengthen cooperation with the US in rare earths development and other areas of economic security. Takaichi hopes to deepen her relationship with US President Joe Biden, not Donald Trump, as she prepares for an upcoming visit to Washington, where she will discuss ways to enhance bilateral ties and address shared challenges.
Takaichi’s reelection comes at a time when Japan is looking to reduce its reliance on China for rare earths, a group of 17 minerals crucial for the production of advanced technologies, including electronics, renewable energy systems, and defense equipment. Japan has been actively seeking alternative sources of rare earths, including partnerships with countries like the US, Australia, and Vietnam, to mitigate the risks associated with over-reliance on Chinese supplies. The Japanese government has also been investing in domestic rare earths production and recycling technologies to enhance its energy security.
The US has also been keen to cooperate with Japan in rare earths development, as part of its broader efforts to diversify its supply chain and reduce dependence on China. The US Department of Defense has been working with US companies like $MP Materials and $Lynas Corporation to develop domestic rare earths production capacity. The Japanese economy is expected to benefit from increased cooperation with the US in this area, with potential investments in rare earths mining, processing, and recycling.
The rare earths market has been volatile in recent years, with prices fluctuating in response to changes in global demand and supply. The following table summarizes some key metrics for the rare earths market:
| Rare Earth | Price (USD/kg) | Change (YoY) |
|---|---|---|
| Neodymium | 60 | 10% |
| Dysprosium | 200 | 15% |
| Cerium | 10 | 5% |
The rare earths market is expected to continue to evolve in response to changing global demand and supply dynamics.
Looking ahead, Takaichi’s visit to Washington is expected to yield significant outcomes for Japan-US cooperation in rare earths development and other areas of economic security. The two countries are likely to announce new initiatives and investments in rare earths production, processing, and recycling, as well as other areas of mutual interest. This cooperation is expected to have significant implications for the global rare earths market and the broader economy.
⚡ Why it matters: The cooperation between Japan and the US in rare earths development has significant implications for the global economy and energy security. The partnership is expected to reduce reliance on Chinese supplies and enhance the competitiveness of US and Japanese companies in the rare earths market.
📊 By the numbers:
Japan imports over 80% of its rare earths from China
The global rare earths market is projected to reach USD 14.4 billion by 2025
The US has invested over USD 100 million in rare earths research and development in the past year
🔗 Source: Associated Press News*
