Rare-Earth Supply Chains Shift Away From China: Europe, Japan

Reducing dependence How Rare-Earth Supply Chains Slowly Begin to Shift Away From China

2026-09-17 From Detlev Karg 1 min Reading Time

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Efforts to build rare-earth supply chains outside China are beginning to take shape, with a planned processing facility in Kazakhstan set to supply heavy rare-earth materials to a new refinery in France.

Rare Earth supply will remain a bottleneck for European Defence companies as China controls most mining and production capacities. (Picture: AI generated) — Rare Earth supply will remain a bottleneck for European Defence companies as China controls most mining and production capacities.
(Picture: AI generated)

The projects are part of growing efforts by Europe and Japan to reduce their dependence on Chinese processing capacity. Australian mining company Lindian Resources has signed agreements with French rare-earth specialist Carester to develop an oxide separation facility at Stepnogorsk in Kazakhstan. The plant is designed to process up to 8,000 tonnes of rare-earth oxides per year. A definitive feasibility study is expected to be completed by the end of 2026. The project will use Carester's separation technology and existing industrial infrastructure at Stepnogorsk, including power, gas, rail connections and chemical supplies.

Franco-japanese cooperation for reliable supply chains

Under a binding long-term offtake agreement, Carester will purchase 70% of the mixed heavy rare-earth compound produced by the operation. The initial contract runs for ten years, with options to extend it for another ten.Part of the material will be shipped to Carester's Caremag refinery at Lacq in southern France, which is scheduled to begin operations in late 2026. The €216m project is backed by €106m from the French government and €110m from Japanese investors, including the state-backed Japan Organization for Metals and Energy Security (JOGMEC) and Iwatani.

Combination of recycled magnet material and concentrate

Caremag is designed to refine 5,000 tonnes of mining concentrates and recycle 2,000 tonnes of permanent magnets annually. Carester expects the plant to produce around 600 tonnes of dysprosium and terbium oxides a year, equivalent to about 15% of current global production, as well as 800 tonnes of neodymium and praseodymium oxides. The emerging supply chain is particularly important for Japan. China has sharply restricted shipments of several heavy rare earths to the country, including dysprosium, terbium and yttrium. These materials are used in high-performance permanent magnets and are critical for electric vehicles, aerospace, defence and other high-tech industries.

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