Japan and France are moving closer together on the supply of rare earths. Both countries have agreed to expand their cooperation along the supply chains for these critical minerals. In doing so, they are responding to the persistently high dependence on China, which continues to play the dominant role in the global rare earths market. A key focus of the new cooperation is, among other things, the Caremag refinery project in southern France, for which both sides want to secure the supply of raw materials.
The agreement was reached during French President Emmanuel Macron’s three-day visit to Japan, where he held talks with Prime Minister Sanae Takaichi. In this context, representatives of both countries signed a roadmap for cooperation on critical mineral supply chains. For Japan and France, this is another step toward broadening their positioning in strategically important raw materials and organizing supply more reliably for key industrial sectors.
This is not merely about general political declarations of intent. A specific focus is the raw material supply for Caremag, a rare earth processing facility in southern France. The project involves the Japanese state organization Japan Organization for Metals and Energy Security, the gas company Iwatani, and the French government. Caremag is scheduled to begin production at the end of 2026.
Rare earths are at the heart of Caremag
For Japan, the Caremag project is of strategic importance because the country intends to cover around 20% of its demand for dysprosium and terbium from this refinery in the future. Both substances are among the heavy rare earths and are needed, among other things, for magnets in electric motors for electric vehicles, in offshore wind turbines, and in electronic components. This means the cooperation touches on key areas of modern industrial and energy technology.
The new cooperation shows how strongly rare earths are now being treated as an industrial policy issue. For France, the planned processing in southern France is linked to the goal of making supply chains within Europe and with partner countries more resilient. For Japan, the agreement is part of a longer strategy to be less vulnerable to geopolitical tensions in critical raw materials.
In this context, Tokyo and Paris also want to advocate, in a joint declaration at their summit meeting, for diversifying the supply of rare earths and other critical minerals. The direction is clearly defined: both states want to spread procurement more broadly across multiple sources and build supply chains that do not depend on individual countries.
China remains the decisive factor in rare earths
The backdrop to this rapprochement is China’s market power. The country is the world’s most important producer and supplier of rare earths. For Japan, Western governments, and many industrial companies, this has been a strategic issue for years. The current steps are taking place at a time when numerous states and manufacturers are deliberately reorganizing their raw material supply in order to reduce dependence on China.
The situation gained additional urgency in February, when China imposed export bans on so-called dual-use goods against 20 Japanese entities that, according to China, supply Japan’s military. This measure followed tensions between the two countries after Sanae Takaichi caused irritation in Beijing in November with remarks about Taiwan. The Chinese rules affect seven rare earths and related materials on the dual-use control list, including dysprosium and yttrium, as well as other controlled critical minerals.
This is precisely why the question of diversification is of great importance for Japan. The country has already reduced its dependence on China in recent years. After a diplomatic incident in 2010, as a result of which Beijing restricted Tokyo’s supply of rare earths, China’s share of Japan’s supply fell from 90% to 60%. This development shows that Japan has been addressing the issue strategically for some time.
Japan is expanding its international rare earths network
Cooperation with France is only one part of a broader approach. In recent years, Japan has expanded its investments in overseas projects. This includes the cooperation between trading house Sojitz and Australia’s Lynas Rare Earths. In parallel, Japan is promoting the recycling of rare earths and is working on corresponding processing and manufacturing methods to open up additional sources of supply.
Only this week, Mitsubishi Materials agreed to acquire a stake in the US company ReElement, which is active in rare earth element recycling. This, too, is linked to efforts to build alternatives to China. In addition, Japan and the US are examining joint development of mud-rich deposits with high rare earth concentrations near the remote island of Minamitori. At the same time, Japan is holding talks with India about joint exploration of rare earths in the desert state of Rajasthan.
For Japan and France, the current agreement therefore has a dual significance. On the one hand, it concerns a concrete industrial project in the form of Caremag. On the other hand, the cooperation fits into a broader picture in which raw materials policy, industrial production, and geopolitical risks are becoming ever more closely intertwined. The fact that both countries also want to work more closely in the space sector and that companies on both sides are preparing agreements on twelve joint projects shows that the strategic partnership extends beyond the issue of rare earths.
