Tokyo tutorial: countering China's rare earths choke, Pg21.

Key Highlights:

• China's temporary pause on rare earth export controls offers a chance for countries to strategize against potential future restrictions.
• In 2010, a maritime incident led China to halt rare earth exports to Japan, causing prices to surge and impacting Japan's auto industry.
• Japan responded by diversifying its rare earth sources, investing in non-China projects like Australia’s Lynas Rare Earths, and developing recycling technologies.
• Japan's dependence on Chinese rare earths has decreased to below 60% and is expected to fall below 50% due to these measures.

Detailed Insights:

• The 2010 Chinese blockade exposed Japan's vulnerability in rare earth supply, prompting the government to allocate over $1.1 billion to strengthen supply chain resilience.
• Japan's multi-pronged approach included stockpiling, recycling, investing in alternative technologies, and forming strategic partnerships to secure rare earth minerals from outside China.
• IREL Ltd, a state-owned company, leads India's domestic mining and refining efforts, with modest processing capacity compared to China's large-scale refining operations.
• India's rare earth imports from China accounted for 65% in 2023-24, highlighting the need for diversified sourcing and enhanced domestic capabilities through initiatives like seabed exploration and rare earth theme parks.
• The US and EU are also developing domestic rare earth processing capabilities to reduce reliance on China, with companies like Solvay aiming to supply a significant portion of Europe's demand by 2030.

Key Concepts Involved:

• Rare Earth Elements: A set of seventeen metallic elements crucial for various industries, including automotive, electronics, and renewable energy.
• Supply Chain Resilience: The ability of a supply chain to withstand and recover from disruptions, ensuring a stable flow of materials and products.
• Critical Minerals: Minerals essential for modern technologies and economies, with supply chains vulnerable to disruptions due to geographical concentration or geopolitical factors.