Japan Pushes G7 for Rare Earth Price Floors vs China
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- Japan's Prime Minister Sanae Takaichi told the G7 Evian Summit on June 16 that China's export controls threaten allied supply chains, urging multilateral development banks to help build resilient mineral supply chains and channel support to producer countries.
- G7 leaders agreed to coordinate critical-mineral stockpiling, launch a new coordination platform expanding the International Energy Agency's role, and set a target of reducing dependence on any single non-G7 rare earth and permanent magnet supplier to below 60% by 2030, with lithium and nickel as pilot metals.
- China banned exports of all dual-use items to Japanese military users in January after Takaichi suggested a Taiwan conflict could constitute a survival-threatening situation for Japan, with a Chinese commentator noting domestic rare earth prices in Japan have since tripled.
- Shin-Etsu Chemical plans a new rare earth magnet refinery in Fukui prefecture costing more than 35 billion yen (US$218 million), with roughly half the funding coming from Japanese government subsidies.
- Lynas Rare Earths renewed its supply agreement with the JOGMEC-Sojitz joint venture JARE on March 10, locking in 7,200 metric tons per year of neodymium and praseodymium through 2038 and a US$110-per-kilogram price floor on 5,000 metric tons, a figure seen as a reference point for a broader G7 framework.
- China's Foreign Ministry spokesman Lin Jian defended the export bans as a measure to contain Japan's 'remilitarization' and accused Tokyo of 'stitching together exclusive groupings against China within the G7,' a position the article notes contradicts Beijing's stated support for stable global critical-mineral supply chains.
Why it matters: If G7 members commit to a binding price floor, allied rare earth miners like Lynas and emerging projects in Brazil and Australia gain the economics to survive Chinese supply flooding, which bankrupted Molycorp's Mountain Pass mine in 2015. Japanese firms have already locked in multi-decade supply deals anchored to a US$110/kg neodymium-praseodymium floor, making the G7 framework less a question of policy and more one of formalizing a price war Beijing has already been fighting for over a decade.
