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A spokesperson from the company acknowledged the project but did not provide any additional comments on funding commitments or timelines.
According to Nikkei Asia, Shin-Etsu is expected to spend around ¥35 billion ($218.2 million) to build the refinery.
The news comes amid severe shortages of high-performance rare earth magnets and heavy rare earth materials outside of China following the implementation of export controls.
China introduced export controls on several categories of medium and heavy rare earths, as well as the high-performance magnets that contain them, in April 2025. Since then, continuing rare earths shortages outside of China have restricted trade and resulted in ex-China spot prices rising to exceptionally high premiums.
Rare earth permanent magnets are used in the drive trains of electric and hybrid vehicles. They are also used in compressors for air conditioners, industry robots and motors for the hard drive disks of digital home appliances.
In early January, China “strengthened” its export controls against Japan by prohibiting export of dual-use items to Japanese military users, for Japan’s military use, or to any other end users who may enhance Japan’s military capabilities.
Recent trade data shows the impact of China’s export controls. In January, February, March, and April this year, Chinese shipments of dysprosium and terbium oxide to Japan have fallen to zero.
Amid shortages of supply, Shin-Etsu has placed greater emphasis on recycling initiatives.
In April, Shin-Etsu announced it had formed a partnership with Daikin, the world’s largest air conditioner manufacturer, to recover and recycle rare earth magnets from compressors starting in 2027.
Recycling of rare earth permanent magnets accounts for an extremely small proportion of overall supply and is heavily concentrated in China, where most permanent magnets are produced.
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