Japan's Rare Earths Deal with Lynas: Unpacking the Systemic Implications of China's Supply Squeeze
Original framing: “Lynas surges 15% after revamp of rare earths deal with Japan” — The Japan Times
China's dominance in the rare earths market is a relatively recent phenomenon, dating back to the 1990s when the US imposed export restrictions on rare earths. This move was intended to protect the US's own rare earths industry, but it ultimately had the effect of driving China to become the world's largest producer of rare earths. Today, China's supply squeeze is a major concern for countries like Japan, which rely heavily on China for their rare earths needs.
The Japan-Lynas rare earths deal is a symptom of a broader structural issue in the global market, where China's dominance has created a supply squeeze for countries like Japan.
To address this issue, countries must diversify their supply chains, develop more sustainable mining practices, and invest in research and development. The rare earths industry must also recognize and respect the rights of indigenous communities and local residents who live near mining operations. By taking these steps, countries can ensure a stable and secure supply of rare earths, while also minimizing the environmental and social impacts of the industry.