A New Frontier: Japan’s Deep-Sea Mining at Minamitorishima for US Rare Earth Resilience

Introduction

The United States faces a critical vulnerability in its supply chain for rare earth elements (REEs) with a dependence on China, which controls an estimated 97% of global REE production and 85-90% of rare earth magnet manufacturing. Without these REEs, modern technologies, including renewable energy technology, consumer electronics, medical devices, and advanced military hardware simply cannot be built. China’s near-monopoly presents a significant geopolitical concern that is accelerated by its demonstrated willingness to impose arbitrary export restrictions on REEs used in US military technology.

The escalating global demand for REEs is projected to increase dramatically in the coming decade, with the International Energy Agency anticipating a 40% rise in rare earth demand by 2030, driven by the accelerating transition to green technologies. This urgent need to de-risk critical supply chains and maintain technological leadership has driven the United States to explore domestic sources, even opening old mines, but it has not given adequate attention to a promising source of rare earths – deep-sea mineral deposits.

Attempts to revive traditional REE mining in the United States have faced significant hurdles, thus limiting this as an option to diversify away from Chinese sources. The reopening of the Mountain Pass rare earth mine in California has been a contentious issue. The reopening of this mine has generated several controversies, mainly centered around environmental impact and, to a lesser extent, social and economic considerations. The mine has a history of past environmental issues. In the 1980s and 1990s, its previous owner (Unocal, and later Molycorp) was responsible for numerous spills of radioactive and hazardous wastewater onto the desert floor. This resulted in significant fines and cleanup, but this legacy naturally raises concerns about the current operation’s environmental practices. Past bankruptcies and reliance on Chinese processing of mined material also pull the mine’s continuity of operations into question.

While deep-sea extraction presents a potential alternative to traditional land-based mining, the current approach and prevailing assumptions warrant re-evaluation. The current technological readiness for integrated commercial-scale deep-sea mining systems and specialized REE processing is still in experimental or early prototype stages and faces significant development hurdles. Additionally, the lack of legal clarity for deep-sea mining is a major impediment for companies pursuing large-scale extraction.

Given these challenges, it is important that the United States consider alternative models to REE extraction and processing. While public-private partnerships are actively targeting the REE processing bottleneck, a comprehensive strategy is essential. This strategy must include legal clarity for companies making decades-long financial decisions, empowerment for US government agencies to conduct much-needed site surveys and research, and strategic investments in deep-sea extraction technologies.

The Minamitorishima Project

The Minamitorishima Project in Japan presents a compelling alternative model for the United States to extract rare earth elements and diversify its industry away from reliance on China. Japan is heavily dependent on rare earth imports from China. In 2023, China supplied approximately 58.05% of the import price and about 73.23% of the import volume of rare earth metals, including scandium and yttrium. Though these figures are down from its previous high of 85% import dependence from China in 2010, the 2023 figures show that Japan is still highly reliant on China for its critical rare earth element imports. Japan began to deliberately reduce its reliance on China for its REE imports in response to Chinese economic coercion following the 2010 Senkaku Islands incident.

The Senkaku Islands incident refers to an event on September 7, 2010, when a Chinese fishing vessel was illegally fishing near the Senkaku Islands and ignored a request by the Japanese Coast Guard to stop. The fishing vessel then collided with a Japanese Coast Guard ship and the captain was arrested for obstructing public duties. In response, the Chinese government requested Japan to immediately release the captain, with the Japanese government ultimately deciding to release him on September 24, 2010. It is believed that the Chinese government implicitly suggested that it would restrict rare earth exports to Japan if it did not comply.

This incident is the first recorded time that the Chinese government has shown its willingness to use REE export restrictions as a tool of economic coercion. In response to such vulnerabilities, Japan has actively pursued a strategy to reduce its dependence on China for rare earths. This included initiatives to develop technologies for reduced rare earth usage, alternative materials, recycling, stockpiling, and expanding rights to overseas rare earth mines. The Minamitorishima project is the natural continuation of this vulnerability-reduction strategy.

Minamitorishima, located 1,950km east of Tokyo, is an island with significant rare earth deposits within Japan’s Exclusive Economic Zone. In 2012, a University of Tokyo research team discovered 6.8 million tons of rare earth mud, equivalent to 230 years of Japan’s domestic demand for rare earths. By 2018, expanded surveys identified 15 types of rare earth elements totaling 16 million tons. These deposits are remarkably rich, containing an estimated 730 years’ worth of dysprosium and 420 years’ worth of terbium. The rare earth mud around Minamitorishima has a 50:50 ratio of heavy to light rare earths, unlike Chinese rare earths that have a 25:75 ratio.

This project is part of Japan’s Strategic Innovation Promotion Program, which is a collaborative effort between government agencies, the public, and the private sectors. This is a long-term plan that aims to extract and process this rare earth mud by 2028. Short-term goals include small-scale mining and mud extraction tests, primary processing tests, and large-scale mining and dredging verification tests.

The other benefit of the Minamitorishima project is a lower environmental cost. Unlike traditional rare earth mining, this rare earth mud contains minimal thorium and uranium, meaning that extraction will have a smaller environmental impact. Moreover, many of these rare earth elements can be extracted by soaking the mud in acid, which is a less intensive and wasteful process than traditional mining and processing. With a combination of shallow extraction, minimal thorium and uranium, and simple processing, the project has a significantly smaller environmental footprint compared to traditional mining.

Recommendations

To reduce their dependence on China for rare earths and safeguard national security, democratic nations must work together. The United States and Japan will be instrumental in leading this effort.

To take full advantage of their natural resource endowments, the United States and Japan will need to better collaborate on joint deep-sea mining. As it stands today, it is difficult to fully explore and extract resources on the seafloor. By improving technologies like autonomous underwater vehicles and improving rare earth processing, the two countries can create a standardized system for stable mining operations at Minamitorishima and future projects within the US EEZ.

Quad members – Japan, Australia, and India – already provide a cooperative framework. The United States can build on this existing framework to decentralize mining and processing, share rare earth stocks, and establish emergency reserves of REEs in the event of an emergency, such as economic coercion from China.

Supporting these efforts would also mean establishing international environmental standards and clarifying regulations for rare earth mining. It will be difficult to get every country on board with a new set of regulations, but setting environmental standards among allies and partners will increase stability and predictability in resource development, ultimately stabilizing rare earth prices and supply.

Conclusion

While technological development for mining at 6,000 meters remains a challenge, and China currently holds a cost competitiveness edge, the Minamitorishima project offers a sustainable and environmentally-conscious approach to rare earth extraction. For the United States, this project demonstrates another viable path toward domestic rare earth production, reducing reliance on unreliable Chinese imports and bolstering national economic and resource resilience. By investing in similar deep-sea exploration and extraction technologies and leveraging domestic underwater deposits, the United States can become a leader for a more resilient and diversified global supply chain for these critical materials.

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