Japan’s seabed discovery is a message for Indo-Pacific rare earth sustainability

[TOKYO] In early 2026, Japan’s deep-sea drilling ship Chikyu successfully accomplished what its crew called a world first: the uninterrupted collection of mud containing rare earths from about 6,000 m under the Pacific Ocean, south of the isolated Minamitorishima Island.

An analysis released by Tokyo in late July 2026 showed that medium and heavy rare earth elements, such as dysprosium, gadolinium and yttrium, comprised 54 per cent of the overall amount of rare earths present in the samples.

Ahead of a large trial scheduled to start in February 2027, Tokyo plans to collect 350 tonnes of mud a day at the location and test whether there is potential for a commercially viable operation.

Although the importance of the find lies in its strategic signal rather than immediate yield – commercial production may remain years away – a key lesson for both the rest of the Indo-Pacific and Asean is the example of a resource-rich and technologically capable state taking steps to diversify its mineral supply chain, before a crisis forces action.

The numbers showing just how dependent countries are on China for accessing certain materials, such as rare earths, are not abstract.

For example, China controls almost 70 per cent of the world’s mined rare earths and more than 90 per cent of the processed products, including magnets which contain dysprosium and terbium.

Such magnets can withstand extreme temperatures in applications such as electric vehicles, wind turbines and fighter jets.

In 2025, the EU had access to only about 47 per cent of its rare earth imports from China. For lanthanum compounds specifically, the percentage rises to nearly 97 per cent.

Asean’s reliance on foreign-owned refineries

The paradoxical situation facing Asean states is even greater.

While they have an estimated 20 per cent of the world’s known rare earth reserves, they produce only about 8 per cent of the world’s mined rare earths.

Asean member states possess vast resources, but lack downstream processing capability to take full advantage of their deposits and reduce their vulnerability to supply chain disruptions caused by external factors.

This situation is further complicated by geographical and security considerations.

Myanmar has expanded from having fewer than 140 mines in 2020 to more than 370 mines in 2024.

Over half of China’s heavy rare earth feedstock comes from Myanmar mines, which operate with little to no regulatory oversight and are often located in regions embroiled in civil conflicts.

Vietnam possesses the second largest known reserves in the world, but lacks sufficient processing capacity.

Although Malaysia hosts mining company Lynas’ Kuantan facility – the world’s largest rare earth separation facility outside of China – it remains an anomaly, rather than an exemplar.

Therefore, while Asean member states hold significant amounts of natural resources and possess some processing facilities, they lack a complete, vertically integrated supply chain.

Consequently, these states remain heavily reliant on foreign-owned refineries, primarily in China, to process their raw materials before using them domestically.

The case for resilience

None of this implies an intent to either restrict or cut off Chinese rare earth supplies.

Containment strategies and/or complete decoupling would likely be both impractical and undesirable, due to the depth of interdependence within Asean manufacturing supply chains.

Rather, it is important to focus on reducing dependence on a single source of critical inputs, as any prudent nation would attempt to manage exposure to a single supplier regardless of that supplier’s intentions.

In recent years, Beijing has demonstrated a willingness to utilise its dominance as a source of policy leverage.

Since the country implemented new export licence requirements for several months in 2022 to 2023, it has become apparent that Beijing may limit or temporarily block exports of raw materials that require several months to move from the mines to a finished product.

Such actions create immediate problems for manufacturing schedules in automotive and defence industries, where production cannot occur without the timely availability of essential components.

Therefore, resilience is the proper objective when dealing with issues related to single-point dependencies, rather than attempting to separate oneself from a supplier.

Japan’s current efforts provide a good model for developing similar capacities throughout the rest of the Indo-Pacific, since the country is pursuing multiple levels of development rather than relying solely on one effort.

Deep-sea extraction is a long-term proposition.

To complement its ongoing efforts in developing deep-sea extraction technology, Tokyo is simultaneously engaged in recycling rare earth magnets from discarded electronic devices and establishing joint stockpiling arrangements with like-minded nations.

Additionally, it is investing directly in developing processing capabilities outside Japan, including in Australia and Vietnam.

Similarly, Asean member states can pursue participation in any of these areas, rather than attempting to replicate them on their own.

For instance, Indonesia and the Philippines have sufficient quantities of raw materials to potentially attract midstream processing investments, if they can establish reliable and predictable regulatory environments favourable to attracting private-sector investors.

Vietnam and Malaysia can increase their respective separation capacity using existing partnerships with Japanese and South Korean-based technology providers that are already working in the region.

Lastly, Singapore lacks mineral deposits, but possesses strong financial services capabilities and international trade facilitation structures.

It has an important role in coordinating transparent and traceable supply agreements among parties involved in various stages of producing diversified raw materials and processing these materials into usable forms.

Driving minerals cooperation

Many of the institutional frameworks required to facilitate this type of cooperative behaviour exist today, although most remain underutilised.

The Quad’s Critical Minerals Initiative, Japan’s bilateral resource diplomacy programmes with other like-minded countries and regions, and Asean’s frameworks for promoting minerals cooperation among members can be combined.

It can form a legitimate regional stockpiling and processing network, rather than having these initiatives be treated separately and under-resourced.

Historically, few obstacles have existed regarding either the presence of substantial mineral reserves, or willing partner governments.

Instead, many previous failed efforts have resulted from a failure to achieve consistent follow-up, once media attention surrounding newly announced initiatives fades.

Japan’s samples collected from the ocean floor will never independently dislodge dependence on Chinese-sourced rare earths.

However, they clearly illustrate the benefits associated with strategically prioritising supply chain resilience as a permanent feature of national security policymaking.

The writer is principal of Pendulum Geopolitical Advisory and a senior fellow at the Macdonald-Laurier Institute in Canada