Pacific Money | Economy | East Asia

Japan’s Takaichi to Forge Closer Cooperation With Australia in Rare Earths

In an era defined by geopolitical fragmentation, the Australia-Japan partnership shows how middle powers can cooperate to mitigate risk and enhance resilience. 

The upcoming visit of Japan’s Prime Minister Takaichi Sanae to Australia, scheduled for early May, marks a significant moment in the evolution of strategic ties between Japan and Australia, especially in the domain of rare earth cooperation. At a time of geopolitical tensions, where resource security, energy flows, and strategic competition are intertwined, this visit centers on rare earths. It is equally shaped by the ongoing Iran crisis and the instability in the Strait of Hormuz. The visit broadly reflects a shift toward resource diplomacy, strategic alignment, and resilience-building in the Indo-Pacific. 

Rare earth elements are essential for advanced technologies ranging from electric vehicles to defense systems and have become central to contemporary geopolitical competition. For decades, China has dominated the production as well as the processing of rare earth elements, which created a dependency for economies like Japan. Recent disruptions between China and Japan, including export controls and broader strategic rivalry, have reinforced Tokyo’s bid to pursue supply chain diversification strategies.

It is in this context that Australia emerges as a natural partner, with its vast mineral resources and a well-developed mining sector. Australian companies like Lynas play a crucial role in supplying rare earths to global markets. Japan has invested heavily in Australian projects, signaling a long-term commitment to secure stable and reliable supply lines. Takaichi’s upcoming visit must be understood as a part of a deliberate strategy to embed economic security within foreign policy. Through deepening cooperation with Australia, Japan seeks to reduce its vulnerability to external shocks and contribute to the rules-based supply networks. 

Japan and Australia have transformed their relationship over time into a “quasi-alliance,” underpinned by shared democratic values, mutual economic interests, and common threat perceptions. The rare earth agenda adds a new dimension to this partnership. The discussions during Takaichi’s visit will focus on strengthening the supply chains for rare earth elements and further expanding cooperation in critical minerals. This builds on the already existing frameworks of cooperation and complements initiatives like Australia’s Critical Minerals Strategy and Japan’s economic security policies. 

The ongoing conflict in the Middle East and the Iran crisis have accelerated Japan’s push to deepen its energy cooperation with Australia. Australia is one of the largest and most reliable suppliers of liquified natural gas (LNG), which plays a vital role in Tokyo’s diversification strategy. Australia provides around 40-42 percent of Japan’s LNG imports, making it Tokyo’s single largest supplier with stable supply chains. Japan has already urged Australia to increase its LNG output to compensate for supply shortfalls. The energy partnership between Japan and Australia, therefore, complements their cooperation in rare earths, which creates a dual framework of energy and resource security. The cooperation is institutionalized through joint investments and policy coordination aimed at ensuring resilience in energy and mineral supply chains. 

The visit is also likely to address maritime security and uphold the Free and Open Indo-Pacific (FOIP) vision. Japan is set to supply its Mogami frigates to Australia and boost the defense cooperation between the two nations. And thus, increased rare earth cooperation is intertwined with strategic considerations, and reinforces a multidimensional partnership spanning economic, political and security domains. 

The deepening of Australia-Japan cooperation in rare earths also has certain geopolitical implications. It represents an attempt by like-minded countries to counterbalance China’s dominance in supply chains. Such initiatives further contribute to an eventual decoupling from Chinese-dominated markets. The partnership also aligns with efforts among Indo-Pacific nations to build resilient supply chains. Japan’s agreements with the United States and France on rare earths underscore a networked approach to economic security, in which multiple partnerships reinforce one another. As countries seek to diversify away from China, Australia’s mining projects are attracting international investment and attention. This enhances Australia’s economic prospects and strengthens its strategic pertinence in the Indo-Pacific. 

Despite the deeper cooperation between the two countries, certain challenges prevail. The rare earth supply chain is complex; it also involves processing and refining, areas where China retains an advantage. With increased mining in Australia, the absence of downstream processing capacity could limit the efficacy of diversification efforts. In addition to this, rare earth prices are volatile and large-scale investments require stability and policy coordination. Both Japan and Australia will have to ensure that their cooperation is widely supported by robust financial mechanisms and technological innovation. There is also a question about the geopolitical risk. Both countries may face diplomatic or economic pushback from China, and managing this risk requires cautious balancing for both nations.

Takaichi’s upcoming visit to Australia reflects a crucial step in advancing Australia-Japan rare earth cooperation and economic security. Rare earth cooperation is part of a broader effort to shape the strategic architecture of the Indo-Pacific. This year also marks the 50th anniversary of the Basic Treaty of Friendship and Cooperation, which was signed in June 1976 and contributed to the transformation of a partnership that was primarily characterized by the commodities trade into the more expansive and varied relationship that it is today.  

By deepening the cooperation in critical minerals and energy, Japan and Australia are positioning themselves as key architects of a resilient Indo-Pacific. The partnership between the two countries showcases a pragmatic response to an uncertain world in which the security of supply chains, energy flows and maritime trade routes is central to the regional stability. In an era defined by geopolitical fragmentation, their partnership shows how middle powers can cooperate to mitigate risk and enhance resilience.

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The upcoming visit of Japan’s Prime Minister Takaichi Sanae to Australia, scheduled for early May, marks a significant moment in the evolution of strategic ties between Japan and Australia, especially in the domain of rare earth cooperation. At a time of geopolitical tensions, where resource security, energy flows, and strategic competition are intertwined, this visit centers on rare earths. It is equally shaped by the ongoing Iran crisis and the instability in the Strait of Hormuz. The visit broadly reflects a shift toward resource diplomacy, strategic alignment, and resilience-building in the Indo-Pacific. 

Rare earth elements are essential for advanced technologies ranging from electric vehicles to defense systems and have become central to contemporary geopolitical competition. For decades, China has dominated the production as well as the processing of rare earth elements, which created a dependency for economies like Japan. Recent disruptions between China and Japan, including export controls and broader strategic rivalry, have reinforced Tokyo’s bid to pursue supply chain diversification strategies.

It is in this context that Australia emerges as a natural partner, with its vast mineral resources and a well-developed mining sector. Australian companies like Lynas play a crucial role in supplying rare earths to global markets. Japan has invested heavily in Australian projects, signaling a long-term commitment to secure stable and reliable supply lines. Takaichi’s upcoming visit must be understood as a part of a deliberate strategy to embed economic security within foreign policy. Through deepening cooperation with Australia, Japan seeks to reduce its vulnerability to external shocks and contribute to the rules-based supply networks. 

Japan and Australia have transformed their relationship over time into a “quasi-alliance,” underpinned by shared democratic values, mutual economic interests, and common threat perceptions. The rare earth agenda adds a new dimension to this partnership. The discussions during Takaichi’s visit will focus on strengthening the supply chains for rare earth elements and further expanding cooperation in critical minerals. This builds on the already existing frameworks of cooperation and complements initiatives like Australia’s Critical Minerals Strategy and Japan’s economic security policies. 

The ongoing conflict in the Middle East and the Iran crisis have accelerated Japan’s push to deepen its energy cooperation with Australia. Australia is one of the largest and most reliable suppliers of liquified natural gas (LNG), which plays a vital role in Tokyo’s diversification strategy. Australia provides around 40-42 percent of Japan’s LNG imports, making it Tokyo’s single largest supplier with stable supply chains. Japan has already urged Australia to increase its LNG output to compensate for supply shortfalls. The energy partnership between Japan and Australia, therefore, complements their cooperation in rare earths, which creates a dual framework of energy and resource security. The cooperation is institutionalized through joint investments and policy coordination aimed at ensuring resilience in energy and mineral supply chains. 

The visit is also likely to address maritime security and uphold the Free and Open Indo-Pacific (FOIP) vision. Japan is set to supply its Mogami frigates to Australia and boost the defense cooperation between the two nations. And thus, increased rare earth cooperation is intertwined with strategic considerations, and reinforces a multidimensional partnership spanning economic, political and security domains. 

The deepening of Australia-Japan cooperation in rare earths also has certain geopolitical implications. It represents an attempt by like-minded countries to counterbalance China’s dominance in supply chains. Such initiatives further contribute to an eventual decoupling from Chinese-dominated markets. The partnership also aligns with efforts among Indo-Pacific nations to build resilient supply chains. Japan’s agreements with the United States and France on rare earths underscore a networked approach to economic security, in which multiple partnerships reinforce one another. As countries seek to diversify away from China, Australia’s mining projects are attracting international investment and attention. This enhances Australia’s economic prospects and strengthens its strategic pertinence in the Indo-Pacific. 

Despite the deeper cooperation between the two countries, certain challenges prevail. The rare earth supply chain is complex; it also involves processing and refining, areas where China retains an advantage. With increased mining in Australia, the absence of downstream processing capacity could limit the efficacy of diversification efforts. In addition to this, rare earth prices are volatile and large-scale investments require stability and policy coordination. Both Japan and Australia will have to ensure that their cooperation is widely supported by robust financial mechanisms and technological innovation. There is also a question about the geopolitical risk. Both countries may face diplomatic or economic pushback from China, and managing this risk requires cautious balancing for both nations.

Takaichi’s upcoming visit to Australia reflects a crucial step in advancing Australia-Japan rare earth cooperation and economic security. Rare earth cooperation is part of a broader effort to shape the strategic architecture of the Indo-Pacific. This year also marks the 50th anniversary of the Basic Treaty of Friendship and Cooperation, which was signed in June 1976 and contributed to the transformation of a partnership that was primarily characterized by the commodities trade into the more expansive and varied relationship that it is today.  

By deepening the cooperation in critical minerals and energy, Japan and Australia are positioning themselves as key architects of a resilient Indo-Pacific. The partnership between the two countries showcases a pragmatic response to an uncertain world in which the security of supply chains, energy flows and maritime trade routes is central to the regional stability. In an era defined by geopolitical fragmentation, their partnership shows how middle powers can cooperate to mitigate risk and enhance resilience.

Simran Walia is a Research Analyst at Manohar Parrikar Institute of Defence Studies and Analyses (MP-IDSA), New Delhi. She is pursuing PhD in Japanese Studies under the Centre for East Asian Studies from Jawaharlal Nehru University (JNU), New Delhi. Her research areas and interests include Indo-Pacific dynamics, Japan’s Politics and Foreign Policy.

Australia critical minerals

Australia rare earths

Australia-Japan energy trade

Australia-Japan quasi-alliance

Australia-Japan relations

Japan critical minerals

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