US and Japan join forces to develop the world's deepest undersea rare earth mine

GeopoliticsCommodity Impact 4
โดย Money & Banking·USJP·Read original
Summary · why it matters

The United States and Japan are moving ahead with plans to develop a deep-sea rare earth mine near Japan's Minami-Torishima island in the Pacific Ocean, aiming to extract resources from about 6,000 meters below the surface. If successful, it would become one of the deepest undersea mining projects in the world and could help reduce China's grip on the rare earth supply chains of both countries. The issue was raised in talks between US President Donald Trump and Japanese Prime Minister Sanae Takaichi during their meeting at the White House in March. Both countries see the deposits around Minami-Torishima as potentially vast enough to meet global industrial demand for several hundred years. The latest sampling results released by the Japanese government found several key minerals, including yttrium, gadolinium, and dysprosium, which belong to the heavy rare earth group where China holds overwhelming production dominance. Japan is preparing further test drilling and aims to complete a commercial plan by 2028. Several North American companies have begun showing interest in joining the project, including Deep Reach Technology, an offshore engineering firm based in Houston. Although discussions are still at an early stage, and Japan has so far carried out all exploration work, the expertise of US companies in the offshore oil and gas industry could play an important role if the project moves to the next phase. A key driver of the project is the desire to reduce dependence on China, which accounts for about 90 percent of global rare earth supply and has previously used export restrictions as a tool in trade disputes with the United States and in political tensions with Japan. For Japan, the issue has become even more pressing after China restricted rare earth exports to Japan late last year in response to Takaichi's remarks on Taiwan. Under the Japanese government's long-term growth strategy, roughly 5.7 billion dollars in public and private investment is planned by 2040 for undersea resource development, including the Minami-Torishima project. Although Japan has spent years trying to diversify its rare earth sources, such as investing in a separation plant in France and providing long-term financial support to Australian miner Lynas Rare Earths, it still imports about two-thirds of its total rare earths from China and relies almost entirely on China for heavy rare earths, especially dysprosium and terbium, which are critical materials for high-performance magnets used in electric vehicles. Chinese exports of both minerals to Japan have been at zero throughout this year. The potential of Minami-Torishima is considered enormous. A team of researchers from the University of Tokyo estimated in 2018 that the seabed mud south of the island may contain more than 16 million tonnes of rare earths. These minerals are strategic raw materials for the modern economy, from semiconductors and electric vehicle motors to missile guidance systems. Yttrium in particular, which is used in LED displays and semiconductor manufacturing equipment, is estimated by researchers to be sufficient to meet global demand for up to 780 years. Another advantage is that mineral samples from Minami-Torishima show no significant levels of radioactivity, unlike traditional onshore heavy rare earth extraction, which can release harmful radioactive elements. This could make processing easier. However, turning undersea resources into a commercial mine still faces major technical and economic hurdles, because the deposits lie about 6 kilometers deep, while current offshore oil drilling projects reach only about half that depth. Water pressure at the deposit site is about 600 times higher than at sea level, and there is still uncertainty about the impact on undersea ecosystems if full-scale commercial mining proceeds. Some private-sector assessments suggest the project could require several billion dollars in investment and take more than 10 years, while rare earth production costs could be about three times higher than extraction from onshore mines in China. Competition over rare earths also has a geopolitical dimension, after Chinese oceanographic survey vessels entered waters near Minami-Torishima on several occasions. An analysis of ship-tracking data by Bloomberg found that Chinese research vessels have surveyed the seabed up to the edge of Japan's exclusive economic zone. Tensions rose further in June 2025 when a Chinese aircraft carrier entered the exclusive economic zone around Minami-Torishima for the first time. While this did not violate international law, it caused serious concern in Tokyo, prompting Japan to protest to China and later deploy anti-ship missile systems to the island, as well as plan additional radar and defense infrastructure to monitor Chinese and Russian military activity. Japan plans to conduct a full-scale one-month mining test in February 2027, covering extraction, refining, and smelting, before assessing the feasibility of domestic commercial rare earth production the following year. If successful, the project would become Japan's only rare earth mine and could allow the country to build a supply chain from mining to magnet production entirely at home. However, some Japanese government officials acknowledge that the project has almost no chance of starting commercial operations within the remainder of Trump's term, raising questions about whether the United States will maintain long-term support. Even so, the Minami-Torishima project carries meaning beyond economics. It is also a strategic signal to China that the United States and Japan are building new alternatives, so they do not have to rely on China as the sole source of rare earths that are vital to both the technology industry and national security.

Impact on stocks 1

Defense & Geopolitical Fragmentation▲ · 1 stocks

Theme Impact 2

Off-coverage companies 1

Deep Reach TechnologyPrivate▲ Positive
Demandrelevance

Deep Reach Technology is named as a US company interested in joining the project, potentially providing offshore engineering services.

Related news

▼impact 4

China Rare Earth Group in talks to acquire Shenghe Resources, sources say

China Rare Earth Group, a state-owned rare earth giant, is in talks to acquire Shenghe Resources, according to two people familiar with the matter. The talks began this year, and China Rare Earth Group wants to take a controlling stake, the sources said. If a deal is reached, Shenghe's holdings in overseas companies would be transferred, including a 3% stake in US rare earth company MP Materials, which would put China Rare Earth Group in the position of investing in MP, whose largest shareholder is the US Department of Defense. A successful acquisition would bring one of China's last major privately owned rare earth mining and refining companies under China Rare Earth Group, ending a decades-long effort to consolidate the sector under state control. Shenghe acquired Australia's Peak Rare Earths last year. According to one of the sources, a deal would make it easier for Shenghe to secure the quotas the Chinese government uses to manage supply. China Rare Earth Group, Shenghe Resources and China's Ministry of Commerce did not respond to requests for comment.
0769.HK600392.CG
Defense & Geopolitical Fragmentation ▼Critical Materials & Supply Chain
ロイター·21hRead more →
impact 4

Trump and Xi to discuss trade in Washington, with agriculture, energy and rare earths in focus

US President Donald Trump is set to hold trade talks with Chinese President Xi Jinping in Washington on September 24, with trade in agricultural goods, energy and rare earths among the key issues both sides have used as bargaining chips in the trade war and which are likely to be raised again. On agricultural goods, one of the major US exports to China worth 29 billion dollars in 2024, China agreed to buy 25 million tonnes of soybeans a year from the United States through 2028, according to the White House, and US officials said China also agreed to buy an additional 17 billion dollars of other agricultural products during Trump's visit to Beijing in May. US Trade Representative Jamieson Greer said on September 3 that incentive measures to promote US agricultural sales to China could be announced. On energy, Bloomberg reported on Tuesday, September 15, that energy tariffs could be part of a 30 billion dollar reciprocal tariff reduction package, which was signalled after the May summit but has not yet been implemented. Meanwhile, US energy imports between 2020 and 2024 were worth between 7.5 billion dollars and 12 billion dollars a year. As for rare earths, where China controls production and has restricted exports to the United States, the issue has not been fully resolved. Reuters reported that US officials have demanded China honour its commitment to maintain continuous deliveries of these critical raw materials, and ahead of this summit the United States signalled the possibility of lifting some sanctions while threatening to impose additional ones. Trump said he would consider lifting some sanctions after the visit to Beijing.
SOYBEAN ▲
Critical Materials & Supply Chain Defense & Geopolitical Fragmentation Energy Transition & Power Demand
InfoQuest·1dRead more →
▲impact 4

EU Sets October Deadline for China to Rebalance Trade

The European Union is demanding concrete action from China to rebalance trade with the EU, setting a deadline for initial results by this October and warning that it will use every tool at its disposal if there is no progress. EU Trade Commissioner Maroš Šefčovič held a phone call with Chinese Commerce Minister Wang Wentao on September 17, covering issues including the management of goods exported to the EU, greater market access in China for European companies, and controls on rare earth exports. European Commission spokesperson Olof Gill said serious negotiations remain important, but the EU wants to see concrete initial results from the meeting in Beijing in October, which will show whether both sides are moving from words to outcomes. The EU currently runs a trade deficit with China of more than 1 billion euros, or 1.1 billion dollars, per day, prompting the European Commission, as well as Germany, to keep up pressure on China. EU leaders are scheduled to discuss and consider countermeasures to China's trade practices in mid-October. European Commission President Ursula von der Leyen warned on September 16 that the trade deficit with China has reached a critical turning point, and that while some see the EU as facing a second China shock, it has already arrived. Šefčovič stressed to reporters that he wants to see a clear signal that negotiations will move toward concrete positive results during next month's visit to China, where discussions will cover ways to increase exports of European goods to China as well as adjustments to customs tariff conditions.
Critical Materials & Supply Chain Defense & Geopolitical Fragmentation ▲
Bloomberg·1dRead more →
© 2026 MarketDXNews