Smartphones, EV motors, wind turbines, fighter jets, they all need rare earth elements, and nearly 90% of the world's rare earth processing capacity still sits inside one country: China. In spring 2026, a quiet push to redraw that map began moving in parallel across three fronts between Tokyo and Washington. A treasury secretary's visit, a corporate investment, and a new kind of magnet, three stories that looked unrelated, but together form the outline of a "Japan–US Rare Earth Alliance."

What is actually happening

Between the end of March and mid-April 2026, three pieces of rare-earth news came out of Japan back-to-back:

  1. March 31, Mitsubishi Materials invests in ReElement Technologies, a rare-earth and critical-minerals recycler headquartered in Indiana, by acquiring preferred shares. The two companies also sign an MOU to jointly build rare-earth recycling operations in both the US and Japan.
  2. April 15, On the margins of the G7 finance ministers and central bank governors meeting in Washington, Japan's Finance Minister Satsuki Katayama holds bilateral talks with US Treasury Secretary Scott Bessent. It is also reported that Bessent plans to stop in Tokyo in May, a visit that later took place on May 11–13.
  3. July 2025 (follow-up in 2026), Proterial (formerly Hitachi Metals) announces that its "heavy-rare-earth-free" neodymium magnet is now in sample production for EV traction motors.

At first glance, these look like one finance story, one corporate story, and one engineering story. Lined up together, they reveal a three-layer design: diplomacy sets the framework, capital builds the factories, technology shrinks the need in the first place. Running all three in parallel is what makes this moment different from previous "de-China" conversations in Japan.

Why rare earths are treated as strategic

A bit of background. "Rare earths" is the umbrella name for 17 metallic elements. They are not that rare in the Earth's crust, but economic ores are limited, and the chemical separation step is hard, capital-intensive, and environmentally demanding. As a result, supply is effectively concentrated in a small number of countries.

Among the 17, the neodymium-iron-boron (NdFeB) magnets that power EV motors and wind turbines often need a pinch of "heavy" rare earths, dysprosium (Dy) and terbium (Tb), to keep their magnetic force at high temperatures. Heavy rare earths sit overwhelmingly in southern China, and China also controls the refining step almost entirely.

That is why rare earths are both the "vitamins of industry" and a strategic lever. Japan still remembers 2010, when China's de facto tightening of rare-earth exports around the Senkaku Islands fishing-boat incident rattled the country's manufacturing base. The scar tissue from that moment is part of the reason Japan now reacts to supply-chain risk earlier than many peers.

Layer 1 (Diplomacy): Bessent's Visit

The first piece was diplomatic. In mid-April, multiple Japanese outlets reported that US Treasury Secretary Scott Bessent was arranging to stop in Tokyo in May, around the US-China summit in Beijing. The visit went ahead: Bessent was in Japan on May 11–13, meeting Prime Minister Sanae Takaichi and Finance Minister Satsuki Katayama on May 12 and also seeing Bank of Japan Governor Kazuo Ueda. Foreign-exchange moves and China's export controls on critical minerals were on the table.

Two Japanese counterparts were central:

  • Finance Minister Satsuki Katayama, for foreign exchange, financial markets, and Russia-related financial sanctions
  • Minister of Economy, Trade and Industry Ryosei Akazawa, who also serves as Minister in charge of Ensuring the Stable Supply of Critical Materials, covering the critical minerals portfolio

The agenda spanned:

  • Oil market instability flowing from the Middle East situation
  • Diversifying rare earth and other critical mineral supply chains away from Chinese dominance
  • The yen-dollar rate, which has been hovering around 158 yen per dollar
  • Coordination with the G7 finance ministers' meeting and the IMF/World Bank Spring Meetings

On the currency side, Katayama met Bessent in Washington around April 15 and later told reporters that the two agreed to keep updating each other at the minister level, adding that Japan was "prepared to take decisive action if necessary." On the same day, the yen firmed to the 158 range against the dollar in Tokyo, supported by verbal intervention and by expectations of renewed US-Iran talks.

Importantly, currency is not the only topic. A separate G7 track on critical minerals was also running in mid-April, and Tokyo has been treating "the currency" and "the critical minerals" as sibling issues, one is the bloodstream of finance, the other the bloodstream of industry. Both are being defended in parallel.

Why does a Treasury Secretary talk about rare earths?

In Japan, rare earths usually sit under the economy ministry. In the US, the Treasury Secretary is often the point person for trade, sanctions, and supply-chain strategy. Bessent in particular has been a central figure in the Trump administration's external economic negotiations, and he can handle FX, tariffs, and critical minerals in one conversation. That is why Japan is matching him with both its finance minister and its economy minister.

Layer 2 (Capital): Mitsubishi Materials × ReElement

Diplomacy can write the rules, but somebody has to actually build the plants. That role, for this alliance, is being picked up by Mitsubishi Materials and Indiana-based ReElement Technologies.

Who is ReElement Technologies?

  • Headquarters: Indiana, US. American Resources Corporation (NASDAQ: AREC) holds a minority stake.
  • Core competence: rare-earth separation and purification via chromatography
  • Compared with the dominant solvent-extraction method:
    • Far more compact equipment, which compresses capex and opex
    • No hazardous organic solvents, reducing waste, greenhouse gases, and water use
    • Recovers rare earth and rare metal products at 99.5%+ purity and 95%+ yield
  • Feedstock range: used magnets and batteries, natural ores, mine tailings, coal-derived byproducts

ReElement has already proven the technology on recycled magnets at a pilot plant in Indiana, with US federal support behind the project. A commercial-scale facility in the same state is scheduled to come online during 2026.

What Mitsubishi Materials gets out of this

Mitsubishi Materials' 2026–2028 medium-term strategy is explicitly built around "becoming a company that shapes the future through resource-circulation businesses." This investment is one of the flagship moves under that banner. The setup has two sides:

① In the US

  • Off-take agreements for ReElement's output
  • Tolling: feeding Mitsubishi-collected scrap into ReElement's facilities for refining
  • Complementary interplay with Mitsubishi's E-Scrap (electronic scrap) collection network

② In Japan

  • A joint feasibility study on domestic rare earth and rare metal recycling
  • Combining Mitsubishi's pre-treatment and metal recovery know-how from home-appliance and automotive recycling with ReElement's separation technology
  • A joint venture as the eventual target structure

If this plays out, it creates a genuine trans-Pacific loop: Japanese end-of-life appliances and EVs → Japanese pre-treatment → US separation technology → high-purity rare earths → back into Japanese and American manufacturing. A commercial supply chain that does not route through China, something that has been talked about for years but rarely assembled at this level.

Old vs new

Item Conventional solvent extraction ReElement chromatography
Equipment footprint Very large plants Compact, modular
Solvent use Large volumes of hazardous solvents No hazardous solvents
Environmental impact Significant waste and emissions Reduced waste, GHG, and water use
Purity Process-dependent 99.5%+
Yield Process-dependent 95%+

Layer 3 (Technology): Proterial's Heavy-Rare-Earth-Free Magnet

Rules and recycling help on the supply side. But if the motor itself no longer needs heavy rare earths, dependence on China shrinks from the demand side. That is the game Proterial, the former Hitachi Metals, has been playing.

In July 2025, Proterial announced that it had developed a high-performance neodymium sintered magnet that uses zero heavy rare earths and is still strong enough for EV traction motors.

Key specs

  • Grades: NMX-F1SH-HF and NMX-G1NH-HF
  • Remanence (Br): 1.40 T
  • Coercivity (HcJ): ≥1,671 kA/m
  • Applications: electric power steering, compressors, and, crucially, EV drive motors
  • Status: prototype samples already being supplied from mass-production lines

The breakthrough is the combination: heavy-rare-earth-free and drive-motor grade. Low-dysprosium magnets already existed, but matching the heat resistance demanded by EV motors (which routinely run above 100 °C) without adding dysprosium or terbium was widely assumed to require compromises.

Proterial holds more than 600 neodymium-magnet-related patents globally (over 200 in Japan) and says microstructure and composition control, not any single new element, was the key.

Why this is a potential game-changer

  • Geopolitical exposure shrinks: dysprosium and terbium are heavily concentrated in southern China. Not using them means less sensitivity to export restrictions.
  • Cost volatility drops: spikes in heavy-rare-earth prices stop hitting the motor bill of materials as hard.
  • ESG alignment: magnets with low depletion risk fit better with EU sustainability rules.
  • Recycling synergy: the rare earths recovered by the Mitsubishi–ReElement loop are a mix of light and heavy. If magnets start needing fewer heavies, recycling math for the rest improves too.

The three layers together: reduce, recycle, re-anchor

Lined up on the rare-earth demand-supply timeline, the three stories form a single pattern:

  • Reduce (substitution): Proterial's heavy-rare-earth-free magnet shrinks the need in the first place.
  • Recycle (circulation): Mitsubishi × ReElement closes the loop on material already in use.
  • Re-anchor (diplomacy): Bessent's visit and the G7 track align the political and capital framework.

Cut the demand, spin the stock, hold the line with allies. All three layers moving at once is unusual by Japanese industrial-policy standards.

Any one of these alone would have modest impact. Stacked, they start to look like a realistic path toward meaningful distance from Chinese dominance, just in time, because every growth story right now (EVs, offshore wind, data centers, AI accelerators) eats rare earths.

What still needs to be solved

This is not an already-won story.

  • Scale: recycled rare earths are still a small share of total supply. Demand is growing faster than the loop.
  • Cost: chromatography-based refining outside China may not immediately beat Chinese virgin material on price. How much of the gap governments or defense demand absorb is an open question.
  • Design trade-offs: heavy-rare-earth-free magnets sometimes require motor redesign, and automakers' adoption timing will be decisive.
  • Political continuity: US administration changes, or Chinese policy swings (either tighter restrictions or a charm offensive), can move the ground.
  • Environmental honesty: "recycling = green" depends on power mix and byproduct handling. Transparency matters.

Wrapping up: this is how it looks from Japan, how about your country?

In spring 2026, "Japan-US rare earth alliance" quietly entered the vocabulary of Japanese news coverage. Government, trading houses, and materials makers may look like they are moving separately, but they are leaning the same direction: away from single-country dependence. Some in Japan applaud the coordination; others argue it is overdue, or that it leans too heavily on the efforts of a few companies, or that both Japan and the US are just repackaging protectionism.

Meanwhile, the "de-China" reshoring debate is now a global homework assignment, EU Critical Raw Materials Act, US Inflation Reduction Act, Australia's Lynas, Canada's divestment orders against Chinese capital in lithium mining.

So, how does it look where you are?

  • How aware is the general public in your country of rare earths and critical minerals?
  • Are recycling and substitution technologies being discussed domestically?
  • Is "dependence on China" treated as an industrial question, or more as a national security question, in your country's debate?

Let us know in the comments. Japan's view of the rare-earth map is only one vantage point; your country's view is another. Put together, the picture gets a lot more dimensional.

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