Japan aims to become rare earth powerhouse despite investment risks

During a campaign speech for the House of Representatives election in February this year, Japanese Prime Minister Sanae Takaichi expressed high expectations for the potential of mineral resources lying within Japan’s exclusive economic zone (EEZ).

“Japan will become a country that does not have to worry about rare earths. This, too, is a matter of national security.”

However, the road to becoming a “resource-rich nation” will not be easy.

About a week earlier, a government-led research team successfully recovered mud containing rare earths from the seabed off Minamitorishima Island, about 1,900 kilometers from central Tokyo.

Program director Shoichi Ishii recalled that moment. “The muddy water we raised after completing such a difficult operation looked almost golden.”

In test drilling planned for 2027, the team aims to collect up to about 350 metric tons of mud per day to evaluate the profitability of commercial use.

Even if stable supply can be secured, Japan will still need to develop technology to extract and separate the rare earth elements from the mud, as well as address environmental pollution caused by the refining process. The biggest challenge is the overwhelming supply capacity and price competitiveness of Chinese rare earths.

Seabed mineral resources are classified into four types: rare earth mud, manganese nodules, cobalt-rich crusts and seafloor hydrothermal deposits. Japan is said to be the only country in the world whose EEZ contains all four types.

Cobalt-rich crusts are rocks spread across seamount slopes and other areas and, like manganese nodules, contain critical minerals such as nickel and manganese.

Seafloor hydrothermal deposits are formed when metallic components contained in hot water gushing from volcanically active seabeds precipitate out. They are rich in copper, lead and zinc, and contain small amounts of gold and silver.

The Basic Plan on Ocean Policy approved by the Cabinet in 2023 included a policy to promote the assessment of resource volumes and the establishment of development technologies for all four types of seabed minerals with an eye toward future commercialization.

No country has yet achieved commercial production of any of them. Minerals on land are easier to access, and mining and transport costs are lower.

Compared with copper and iron, the markets for rare earths and rare metals are smaller and prices fluctuate more widely. Particularly for minerals whose production is concentrated in specific countries, the major producing nations wield significant influence over the market, making it difficult to forecast return on investment and adding risk to new development.

Yuzo Yamaguchi, chief of the Economy, Trade and Industry Ministry’s minerals division, said, with China in mind, “To reduce dependence on specific countries, we will look for every possible source of supply, on land and at sea, in order to diversify supply sources.”

Yuki Kobayashi, a senior researcher in the Security and Japan-U.S. Studies Unit at the Sasakawa Peace Foundation, said, “Even if domestic production eventually supplies less than 10% of demand at home, there is great significance in building a domestic supply chain for mining technology and refining. Possessing the technology itself can become a diplomatic card.” He also said that in negotiations over international rules governing seabed mineral mining, “Japan should lead the discussion based on the scientific data it has accumulated so far.”