Japan and France are strengthening cooperation to reshape rare earth supply chains that rely heavily on China.
According to the Nihon Keizai Shimbun (Nikkei) on Saturday, the two countries are expanding cooperation in key economic security areas such as rare earths and the space industry, going beyond the nuclear and energy sectors. They plan to begin rare earth recycling production in southwestern France in early 2027.
At the core of this cooperation is a joint investment in French rare earth company Caremag. The French government, Japan Organization for Metals and Energy Security (JOGMEC), and Iwatani Corporation are providing up to 40 billion yen (about 380 billion won) to build a recycling plant that extracts rare earths from spent fuel cells and other sources.
The plant aims to begin operations in early 2027, producing dysprosium, a heavy rare earth essential for permanent magnet manufacturing, which will also be supplied to Japan. The supply volume is equivalent to about 20% of Japan's domestic demand.
Nikkei explained that "Japan and France currently rely on China for virtually all of their heavy rare earths," adding that "since the Chinese government tightened export controls, rare earth prices have surged, making supply chain stabilization a common challenge for both countries."
According to British market research firm Argus Media, the price of dysprosium in Europe stood at $1,750 per kilogram (about 2.7 million won) as of mid-June, up about 90% from the end of last year. This is the highest level since related statistics began being compiled in 2015.
Japan is seeking to secure demand for electric vehicles (EV) and the defense industry, while France is pursuing the procurement of raw materials needed to produce motors for aircraft and wind power generation, aligning their interests in supply chain diversification.
Japan and France's cooperation also aligns with the G7's moves to reshape supply chains. At the recent G7 summit held in Évian, France, a goal to lower dependence on a single supplier of rare earths to below 60% by 2030 was included in a joint statement for the first time.
Japan and France are expanding cooperation not only in rare earths but also in the space and artificial intelligence (AI) sectors. During his visit to Japan in April, French President Emmanuel Macron, together with Prime Minister Sanae Takaichi, visited Japanese space startup Astroscale to inspect space debris removal technology, and companies from both countries are also pursuing cooperation in the field of space safety monitoring.
Céline Pajon, a researcher at the French Institute of International Relations (IFRI), told Nikkei that "China is not the only cause, but concerns over China's economic pressure, supply chain risks, and technological competition are promoting cooperation among countries that share values."
