In a strategic move to diversify its supply of essential materials, Japan is deepening its partnership with Australian mining firm Lynas Rare Earths. The Japanese trading house Sojitz has announced a significant expansion of its rare earth imports from Lynas, marking a pivotal step in reducing reliance on dominant global suppliers.
A New Element Enters the Supply Chain
A key development in this expanded agreement is the forthcoming import of samarium, scheduled to commence in April 2026. This element is a critical component in the manufacture of permanent magnets required for defense systems and aerospace applications. The demand for samarium-cobalt (SmCo) magnets, prized for their stability in extreme temperatures, has prompted Lynas to accelerate its production timeline. The company has moved the launch of its samarium output forward to the first half of 2026, a full year earlier than its original 2027 target.
This acceleration and the broader partnership expansion occur against a backdrop of stringent export controls from China. China currently commands an estimated 85% to 90% of the world’s capacity for refining and separating rare earth elements. Lynas stands out as the only commercial-scale producer of separated rare earth oxides operating outside of Chinese territory.
Broadening the Portfolio of Imports
The collaboration between Sojitz and Lynas is not new; it dates back to 2011, initiated by Tokyo in response to Chinese export restrictions that previously caused significant supply disruptions for Japanese manufacturers. Currently, Sojitz already imports the heavy rare earths dysprosium and terbium from Lynas, elements vital for high-performance magnets found in electric vehicle motors and wind turbines.
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The new plan aims to substantially widen this procurement. By mid-2027, Sojitz intends to source up to six different medium and heavy rare earth elements from the Australian miner. This expanded portfolio is expected to include gadolinium, used in medical imaging and nuclear reactor control rods, and yttrium, a component in superconducting materials for medical equipment. Specific volumes for these future imports were not disclosed by Sojitz in discussions with Reuters.
A Coordinated Western Strategy
This bilateral agreement aligns with a wider initiative among Western nations to establish resilient supply chains independent of China. In early February 2026, U.S. Vice President JD Vance outlined plans to coordinate allies within a critical minerals trade bloc, including mechanisms for coordinated minimum pricing.
For Lynas, the enhanced deal with Sojitz solidifies its role as a strategic supplier for Western economies. For Japan, the United States, and European nations, reducing dependence on Chinese refining infrastructure remains a central challenge in securing a stable supply of these technologically crucial materials.
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