Japan, Australia Team Up to Withstand China's Rare Earth Supply

The United States seeks support from allies and joins hands with Japan, India, Australia, Canada and other countries to establish rare earth procurement and supply chains to reduce its dependence on China's rare earths. Especially under the trend of electric vehicles, aluminum is an important raw material. And Mitsubishi Corporation of Japan announced that it will acquire a 30% stake in the Australian Aurukun mine owned by Swiss resource giant Glencore to strengthen its aluminum smelting business.

Rare earth elements (REEs) are important raw materials for smartphones and electric vehicles, and are the crucial elements of high technology such as military equipment. However, in addition to its production, China has mastered the world’s important rare earth minerals and markets. For this reason, the proposed ban on the export of REEs is an attempt to choke the world’s major countries as a bargaining chip in diplomatic negotiations.

Earlier, the four countries of the United States, Japan, India, and Australia launched a four-party security dialogue. It was reported that they would reorganize the supply chain and develop low-cost radioactive waste discharge refining technologies. Japan and the United States held the ‘Japan-U.S. Security Consultative Committee (2+2)’ in Tokyo, and confirmed that they will have closer discussions on the establishment of a diversified secure supply chain, with semiconductors and rare earths being the focus.

60% of Japan's rare earth depends on China's imports. To this end, Japanese companies are expanding the supply chain. Kyodo News reported that Mitsubishi Corporation (MC) announced that it has reached an agreement with Switzerland's Glencore Plc to acquire a 30% interest in undeveloped Australia’s Aurukun Bauxite Project, the amount of the acquisition would not be disclosed.

The report pointed out that MC's purchase of the Aurukun mine's rights is mainly to mine bauxite and smelt it into aluminum, which is an important raw material for EVs. MC has carried out aluminum smelting and other businesses, but it is the first time to participate in the mine development. It is expected to expand upstream areas and strengthen aluminum-related businesses in the future.

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