Shin-Etsu Chemical, one of Japan¡¯s largest rare-earth magnet makers, plans to build a new domestic refinery, the latest attempt by a company outside China to diversify its supply chain.
The plant will be the company¡¯s third in Fukui Prefecture and will help Shin-Etsu ¡°to ensure a stable supply of rare-earth-related products and magnets,¡± a spokesperson for the firm said, confirming an earlier report by the Nikkei newspaper.
Shin-Etsu declined to give details about the scale, cost or timeline for the project. The Nikkei reported that the company plans to invest more than ?35 billion ($218 million) in the new plant, with around half of that coming from government subsidies.
Rare earths have emerged as a flash point in trade relations in recent years, with the United States and other major economies seeking to challenge China¡¯s dominance of their mining and processing. The issue is set to feature on the Group of Seven¡¯s agenda at a summit in France next week.
Beijing is currently putting pressure on Japan with a complete halt to exports of some key materials since the start of 2026, amid a simmering dispute over comments made by Prime Minister Sanae Takaichi on Taiwan.
The latest Shin-Etsu project ¡°is positioned as economically significant for national security,¡± Citigroup analysts wrote in a note.
Shin-Etsu is one of a trio of major Japanese magnet producers that also includes TDK and Proterial. In addition to the two existing plants in Fukui Prefecture, the company has a rare-earths operation in Vietnam.
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