Shin-Etsu Chemical Co., 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 the western Japanese prefecture of Fukui 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 yen ($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 US 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 Japanese Prime Minister Sanae Takaichi on Taiwan.
The latest Shin-Etsu project “is positioned as economically significant for national security,” Citigroup Inc. analysts wrote in a note.
Shin-Etsu is one of a trio of major Japanese magnet producers that also includes TDK Corp. and Proterial Ltd. In addition to the two existing plants in Fukui, the company has a rare earths operation in Vietnam.
