Chinese media outlet Guancha.cn on the 21st published an article titled 'China's rare earth exports to Japan are sluggish, and Japan has no salvation even if it dismantles air conditioners or digs the seabed'.

The article cited data from the General Administration of Customs of China, reporting that China's rare earth magnet exports to Japan in June were 128 tons. Although this was an increase of 5 tons from the previous month, it remained at a low level. Meanwhile, the article emphasized that China's total exports to the world increased by approximately 19% month-on-month, and explained that while China's rare earth magnet exports to Japan had previously exceeded 200 tons per month, they decreased to the 180-ton range in March and April, and further dropped to the 120-ton range since May.

It then pointed out that Japanese companies' rare earth procurement costs are rising due to the impact of China's export restrictions. A survey conducted by supply chain risk management company Resilire (Resilire) targeting 400 companies that procure rare earths and related materials revealed that Japanese companies' procurement costs have increased by more than 20% since last year, and also mentioned that over 40% of companies responded that they have not been able to pass on even half of the cost increase to their selling prices, stating, 'The average dependence of Japanese companies on China for rare earth procurement has reached 61%'.

Furthermore, it was noted that experts have pointed out that 'if supply instability prolongs, it could affect Japan's domestic production activities', and based on estimates from Nomura Research Institute, it explained that 'if rare earth supply stops for three months, the loss to the Japanese economy could reach approximately 660 billion yen, and if it continues for one year, it could expand to 2.6 trillion yen'.

The article stated that 'the Japanese government is accelerating efforts to secure a stable supply of critical minerals to reduce dependence on China', and introduced efforts by Mitsubishi Electric and others to extract rare earths from used household air conditioners as an example. This process involves removing and dismantling the compressor from collected outdoor units, extracting magnets containing rare earths such as neodymium, refining them, and then reusing them in product manufacturing. Estimates suggest that approximately 35% of the rare earths required for air conditioner manufacturing could be replaced by recycled materials.

On the other hand, it mentioned that 'dismantling home appliances is difficult and costly, and there are also challenges with recovery rates and purity'. 'A single inverter-type air conditioner contains only about 20-30 grams of rare earths, and dozens of discarded air conditioners need to be dismantled to extract one kilogram of rare earths. Furthermore, it pointed out that 'what can be extracted are mainly light rare earths like neodymium, and their purity remains below 80%'.

It further reported that 'Mitsubishi Electric plans to collect approximately 230,000 air conditioners annually, but with this scale, only a few tons of rare earths can be recovered per year. Meanwhile, Japan's annual consumption of rare earth magnets amounts to approximately 20,000 tons, and this is pointed out as insufficient to resolve the immediate supply shortage'.

The article also listed challenges regarding Japan's plan to mine rare earth-containing mud from the seabed around Minamitori Island, including experts pointing out that 'it will take more than 10 years to realize' and that costs could be 20 times higher than those for Chinese rare earths. Regarding Japan's dispatch of a delegation to Greenland, which boasts one of the world's largest rare earth reserves, to conduct surveys, the article also emphasized that 'the Greenlandic government and residents are concerned about the impact on fisheries and the environment, and have shown a cautious or opposing stance towards rare earth mining'. (Translation/Editing by Kitada)