China shipped no gallium, dysprosium, terbium or yttrium to Japan in June, extending an eight-month halt in shipments of critical magnet materials — pushing Japan to search for alternative rare earth sources almost six kilometres beneath the Pacific Ocean.
Exports of dysprosium and terbium oxide to Japan have remained at zero since November, Chinese customs data show. The squeeze is targeted: China’s worldwide rare-earth magnet exports rose 19% month-on-month in June to 5,649 tonnes.
Japan’s potential answer lies in rare-earth-rich mud near Minamitorishima, a remote island about 1,900 kilometres southeast of Tokyo.
Recent analysis found medium and heavy rare earths, including yttrium, gadolinium and dysprosium, made up 54% of the rare-earth content in mud recovered during a government-backed trial earlier this year.
The drilling vessel Chikyu raised about 50 tonnes of mud, excluding seawater added during extraction, from three deposits over a three-day test. Japan described it as the first continuous recovery of seabed sediment from a depth of 5,569 metres.
The deep-sea mining project plans to extract mineral resources from the ocean floor, but, for now, remains an experimental operation, not a commercial mine. This is possible as the deposit sits inside Japan’s exclusive economic zone, it is outside the jurisdiction of the International Seabed Authority, which regulates mining beyond national waters.
Yttrium, terbium and dysprosium are rare earth elements used in heat-resistant magnets for electric vehicles, wind turbines and weapons, and in coatings that protect aircraft and power-generation turbines. Japan has the world’s largest rare-earth magnet industry outside China and, before the latest restrictions, China accounted for 80% of Japan’s rare earth imports.
Beijing introduced licensing controls on seven medium and heavy rare-earth families in April 2025. It tightened restrictions on Japan early this year after Prime Minister Sanae Takaichi’s comments about Taiwan deepened a diplomatic dispute. China says the controls protect national security and support its non-proliferation obligations.
The impact is spreading beyond specialist materials companies. More than two-thirds of almost 200 Japanese corporate filings that mentioned rare earths in May and June said the controls were hurting business or could do so, according to a recent Reuters analysis.
Tokyo plans a month-long seabed trial in February 2027, covering extraction, dewatering, transport, separation and refining. It expects to complete an economic assessment by March 2028.
Commercial supply remains years away. Operating at extreme depth, transporting material from one of Japan’s most isolated territories and rebuilding domestic separation capacity will be expensive. The government’s closed-loop lifting system is designed to limit sediment plumes, but analysis of the wider environmental effects is continuing.
Japan is therefore pursuing several routes at once: stockpiling, recycling, financing overseas producers and working with the US and other Group of Seven countries on alternative supply. A Japanese-backed processing and recycling plant in France is expected to supply dysprosium and terbium equal to about 20% of future Japanese demand.
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