The US-Japan Rare Earth Agreement, formally known as the Framework for Securing the Supply of Critical Minerals and Rare Earths through Mining and Processing, is a strategic accord aimed at strengthening the critical mineral supply chains between the two nations and reducing reliance on dominant foreign suppliers, particularly China.
Signed by President Donald Trump and Prime Minister Sanae Takaichi, the deal establishes a framework for cooperation across the entire supply chain, from mining to processing and recycling.
🔑 Key Details and Provisions
The framework’s primary objective is to achieve resilience and security in the supply of critical minerals and rare earths, which are vital components in modern technologies like electric vehicles (EVs), advanced electronics, and defense systems.3
| Provision | Description | Strategic Goal |
| Coordinated Investment | Mobilize government and private sector support (grants, loans, guarantees) for capital and operational expenditures in mining and processing projects in both countries. | Accelerate the development of diversified, liquid, and fair markets. |
| Project Identification | Jointly identify projects to address gaps in supply chains for critical minerals and their derivative products, such as permanent magnets, batteries, catalysts, and optical materials. | Build new capacity and secure end products for US and Japanese buyers. |
| Financial Support | Take measures to provide financial support to selected projects within six months to generate end products for delivery to the US, Japan, and “like-minded countries.” | Ensure rapid development and commercialization of alternative sources. |
| Permitting | Work to accelerate, streamline, or deregulate permitting timelines and processes for new mining, separation, and processing activities. | Speed up domestic production capabilities. |
| Stockpiling | Work together to consider a mutually complementary stockpiling arrangement utilizing existing national systems. | Provide a buffer against potential supply disruptions. |
| Rapid Response Group | Establish a U.S.-Japan Critical Minerals Supply Security Rapid Response Group (led by the US Secretary of Energy and the Japanese Minister of Economy, Trade, and Industry) to address supply vulnerabilities. | Enable swift coordination and planning during crises. |
| Recycling and Scrap | Commit to investing in mineral recycling technologies and managing critical minerals scrap to support supply chain diversification. | Promote sustainable sourcing and reduce primary material dependency. |
🌎 Context and Significance
- Countering Dominance: The agreement is a direct response to the global dominance of China in the rare earth and critical minerals processing supply chain (China currently processes over 90% of the world’s rare earths).
- EV Tax Credit: A separate Critical Minerals Agreement (CMA) signed earlier in March 2023 between the US and Japan related to EV batteries allowed Japanese-sourced critical minerals to count toward the EV tax credit requirements under the US Inflation Reduction Act (IRA). The current framework builds on this cooperation to deepen supply chain security.
- Strategic Alliance: The deal highlights the growing strategic importance of mineral security within the US-Japan alliance, as both nations seek to protect their high-tech and defense industries from geopolitical supply risks.
