The U.S.-Japan Rare Earth Framework: How History, Technology, and Strategy Interlock

On October 28, 2025, in Tokyo, U.S. President Donald Trump and Japanese Prime Minister Sanae Takaichi signed the "U.S.-Japan Policy Framework for Cooperation on Critical Minerals and Rare Earths" covering joint investment across mining, separation, refining, alloying, and magnet production, plus stockpile sharing, deep-sea R&D, and third-country project finance. [Reuters] [Reuters agenda] [Guardian]

1 | Where It Began — The Birth of the Neodymium Magnet

In 1983, Japanese scientist Masato Sagawa showed that mixing neodymium, iron, and boron (Nd-Fe-B) creates an exceptionally strong permanent magnet, roughly an order of magnitude stronger than ferrite magnets — enabling smaller, lighter, and more efficient motors. [Nature 2023 overview]

Around the same time, General Motors (USA) and Sumitomo Metal (Japan) achieved commercialization via different processes: GM’s route offered flexible shapes and high performance; Sumitomo’s favored simpler mass production. They signed a cross-licensing deal that sped global diffusion of Nd-Fe-B technology. [Sagawa 2025 lecture] [Materials review 2023]

As devices shifted from “brute force” to precision control, compact high-torque motors became central to EVs, robots, drones, and wind turbines — all anchored by Nd-Fe-B magnets.

2 | From Patents to Production Hegemony — Magnequench and China’s Rise

GM created Magnequench in 1986 to commercialize Nd-Fe-B for defense and autos. In 1995 it was sold to a consortium later linked to Chinese state interests; over the following years, production lines were moved from the U.S. to China and the U.S. plant closed by 2003 — a case study in technology and capacity relocation. [Heritage 2008 PDF] [Heritage explainer] [FT analysis 2025]

Guided by the policy vision often summed up as “The Middle East has oil; China has rare earths,” Beijing built an integrated rare-earths sector spanning mining, separation, refining, and magnets; by the 2010s China accounted for the majority of mining and over 90% of processing/magnet output in many estimates. [U.S. Army War College primer] [FT 2025]

3 | Security Shock — The 2022 F-35 Pause

In September 2022, the Pentagon stopped accepting F-35 jets after a Chinese-origin alloy was found in a magnet. Deliveries resumed in October with a waiver — underscoring how even defense supply chains had become exposed to Chinese rare-earth inputs. [Reuters 2022-09-07] [Reuters 2022-10-08] [DefenseNews]

4 | Thermal Weakness and Dysprosium — Keeping High-Torque Motors Stable

Nd-Fe-B magnets lose coercivity as temperatures climb (often near or above 100°C in fast-rotating motors). Small additions of heavy rare earths such as dysprosium (Dy) or terbium (Tb) raise the effective demagnetization temperature, preserving performance for EV powertrains, wind turbines, and aerospace. [Materials review 2023]

5 | The Heavy Rare Earth Bottleneck — Myanmar and China

Most Dy/Tb supply today flows from southern China and northern Myanmar. Investigations document how Myanmar’s largely unregulated mines feed Chinese processing hubs, creating both environmental damage and strategic dependence. [Global Witness 2024] [Mongabay 2025]

Outside China/Myanmar, confirmed commercial-scale Dy-rich resources are limited. Greenland and parts of Siberia are often cited, but Western producers have struggled to find and commission Dy-centric deposits at scale. [Reuters on Greenland context]

6 | Japan’s Hidden Card — REE-Rich Seabed Mud near Minamitorishima

University of Tokyo-led teams reported exceptionally REE-rich mud (including Dy/Tb/Y) within Japan’s EEZ near Minamitorishima. Because these deposits form via hydrothermal processes rather than igneous concentration, they may contain fewer radioactive impurities — potentially easing downstream processing risks. [Scientific Reports 2018] [University of Tokyo explainer] [Phys.org summary]

Japan is preparing pilot recovery tests around 2026–2027, subject to engineering, environmental, and economic validation. [Mining.com]

7 | Technology Race and Maritime Tension

China is advancing deep-sea mining technologies (e.g., 4,000 m-class robots) and conducting trials in Pacific zones, while Japanese forces monitor increased PLA Navy activity near its EEZ. The strategic competition now spans science, industry, and maritime security.

8 | Japan’s 2010 Shock — Senkaku and the Case for Stockpiles

In September 2010, following a boat collision near the Senkaku/Diaoyu Islands, media reported that China had halted REE exports to Japan (Beijing officially denied an outright ban). The episode jolted Japanese industry and accelerated diversification and stockpiling strategies. [CEPR/VOXEU retrospective] [Reuters 2010 denial report]

Since then, Japan has locked in supplies with Australia, Vietnam, and Kazakhstan and expanded strategic reserves, improving its ability to ride out future disruptions. [Reuters 2025 on imports]

9 | Inside the 2025 U.S.-Japan Framework — What It Actually Does

• Joint investment tools — subsidies, guarantees, loans — across the full chain from mining to magnets. [Reuters]
• Priority supply — output from supported projects prioritized for the U.S. and Japan. [Reuters agenda]
• Stockpile swap/sharing — mechanisms to buffer short-term shocks.
• Third-country project finance — co-investment with trusted partners (e.g., Australia, Vietnam, Kazakhstan) to reduce concentration risk. [Supply Chain Dive summary]
• Deep-sea R&D cooperation — joint exploration and engineering for seabed REE resources in/around Japan’s EEZ. [University of Tokyo] [Mining.com]

10 | The Big Picture

• The U.S. and Japan are rebuilding trusted rare-earth supply chains to reduce exposure to single-country risks.
• Japan contributes both process technology and potential resources via EEZ seabed mud.
• The framework buys time for allied alternatives to scale while smoothing volatility through stockpiles and swaps.
• Minerals strategy has become a core dimension of Indo-Pacific economic security — as strategic as oil once was.

Sources (direct links)

• Framework signing and scope: Reuters, Reuters agenda, Guardian
• Nd-Fe-B background: Nature, Materials review, Sagawa lecture
• Magnequench and China: Heritage PDF, Heritage explainer, FT 2025
• F-35 delivery pause: Reuters 2022-09-07, Reuters 2022-10-08, DefenseNews
• HREE bottleneck and Myanmar: Global Witness 2024, Mongabay 2025
• Minamitorishima REE-rich mud: Scientific Reports 2018, Phys.org, University of Tokyo, Mining.com
• 2010 episode and diversification: CEPR/VOXEU, Reuters 2010, Reuters 2025

Note: Some figures and timelines are plans or research-stage estimates and may change during commercialization. Where multiple outlets provide different figures, links show the range of reporting.