Japanese trading house Sojitz Corporation is actively scouting Southeast Asia and India for new rare earth supply sources, with the company’s CFO confirming Laos, Cambodia and Vietnam as priority target regions. The move reflects Japan’s accelerating push to diversify Sojitz rare earths supply away from both China-controlled chains and its existing dependence on a single Australian producer.
Why Sojitz Rare Earths Strategy Is Shifting
Speaking to Bloomberg News this week, Sojitz CFO Makoto Shibuya identified regions adjacent to southern China — including Laos, Cambodia and Vietnam — as areas the company intends to investigate for rare earth development. India was also named as a potential target if suitable investment opportunities emerge.
The rationale is geological as much as geopolitical. Southern China hosts the world’s largest ionic clay rare earth deposits, particularly for heavy rare earths including dysprosium and terbium used in high-performance permanent magnets. The bordering terrain across Laos and Cambodia shares broadly similar mineralization characteristics — making the region a logical extension of prospecting activity without the political exposure of Chinese-controlled supply.
Sojitz’s primary declared objective, however, is to reduce dependence on Mt. Weld in Western Australia — the flagship asset of Lynas Rare Earths, with which Sojitz and Japan’s state-backed energy agency JOGMEC have operated a joint venture for over a decade. In mid-March, Sojitz and Lynas agreed to open talks on mineral exploration and development of rare earth resources, including potential new mines both inside and outside Australia.
Japan’s Rare Earth Diversification: The Structural Problem
Japan imports the majority of its rare earths from China and processes them domestically, but Chinese export restrictions — including the controls imposed on heavy rare earths and magnet materials in 2023 and expanded since — have exposed the fragility of that model. For procurement teams and manufacturers dependent on NdPr, dysprosium and terbium, supply security has become a board-level issue.
The JOGMEC-Sojitz-Lynas structure was designed precisely to address this: a Japan-backed investment securing off-take from a non-Chinese primary producer. But Mt. Weld alone cannot insulate Japan’s downstream magnet industry from concentration risk, and the volume requirements of Japan’s EV and defence manufacturing sectors are increasing.
Southeast Asian exploration addresses the next layer: proximity to existing processing infrastructure in Japan and South Korea, lower political exposure than China, and geological potential that has been under-explored relative to Australia or North America. See our Asia critical minerals hub for the broader regional supply chain context.
What This Means for Rare Earth Supply Chains
For buyers and investors tracking rare earth prices, the Sojitz announcement signals medium-term supply development activity rather than near-term volume. Exploration in Laos or Cambodia is years from production at any scale — and finding ore deposits does not solve the processing bottleneck. China still controls the overwhelming majority of rare earth separation, metallisation and alloy production globally. New mining projects in Southeast Asia would require investment in processing infrastructure that does not currently exist in the region at commercial scale.
The more immediate read is strategic: Japan’s trading houses, which sit at the midstream of rare earth flows into Japanese manufacturing, are committing exploration capital to new geographies. That signals a medium-term conviction that the Lynas model — one major non-Chinese primary source — is insufficient for Japan’s needs. It also signals that Southeast Asian governments with rare earth geology may find themselves with significantly more leverage than they currently exercise.
For the broader picture on export control risk across critical minerals, see our analysis of China’s critical minerals export controls.
Sojitz Energy Portfolio: Alaska LNG Ruled Out
In the same Bloomberg interview, Shibuya confirmed Sojitz has no appetite for a stake in or offtake volumes from the proposed Alaska LNG project, citing cost. Energy accounts for roughly 10% of Sojitz’s total investments over the past decade, and management has been actively reducing that exposure. LNG remains among its few remaining energy holdings, pursued only when projects meet rigorous internal scrutiny.
The contrast is instructive: Sojitz is trimming energy exposure while actively expanding its critical minerals footprint. That reallocation mirrors the broader direction of Japan’s industrial policy, which has consistently prioritised supply security for materials feeding its domestic manufacturing base over commodity energy plays.
What is Sojitz Corporation’s rare earths strategy?
Sojitz is diversifying its rare earth supply sources beyond Australia’s Lynas Rare Earths, targeting Southeast Asian countries including Laos, Cambodia and Vietnam, as well as India. The company operates a long-running joint venture with JOGMEC and Lynas focused on the Mt. Weld deposit in Western Australia.
Why is Sojitz looking at Southeast Asia for rare earths?
The region adjacent to southern China — including Laos and Cambodia — shares geological characteristics with China’s ionic clay rare earth deposits, which are the world’s primary source of heavy rare earths like dysprosium and terbium. Japan is seeking supply with similar mineralisation but outside Chinese political control.
What is the JOGMEC-Sojitz-Lynas joint venture?
JOGMEC (Japan’s state-backed energy agency) and Sojitz have operated a joint venture with Lynas Rare Earths for over a decade, providing Japan with access to non-Chinese rare earth supply from the Mt. Weld mine in Western Australia. In March 2026, Lynas and Sojitz agreed to explore additional mining opportunities inside and outside Australia.
How does China’s dominance affect rare earth supply for Japan?
China controls the majority of global rare earth separation, metallisation, and magnet manufacturing. Even if new deposits are developed in Southeast Asia or elsewhere, processing infrastructure would need to be built to convert ore into usable materials. Japan’s diversification strategy addresses mining supply but faces a separate challenge at the processing stage.
What rare earths are most critical for Japan’s manufacturing sector?
Neodymium, praseodymium, dysprosium and terbium are the most strategically important for Japan’s EV motor and defence manufacturing sectors, where high-performance permanent magnets are essential components. These heavy rare earths are disproportionately concentrated in Chinese-controlled supply chains.
