22/12/2025

BIZ & FINANCE MONDAY | DEC 22, 2025

16

China’s rare earths El Dorado gives strategic edge

Japan sets ¥3 trillion

business target in Central Asia TOKYO: Japan unveiled a five-year goal on Saturday for business projects totalling ¥3 trillion (RM77 billion ) in Central Asia as Tokyo vies for influence in the resource-rich region. The announcement came after Prime Minister Sanae Takaichi hosted an inaugural summit with the leaders of five Central Asia nations – Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan – in Tokyo. Japan “set a new target of business projects at a total amount of ¥3 trillion in 5 years in Central Asia”, a joint statement said after Takaichi wrapped up her meeting with the five leaders. Like the United States and the European Union, Japan is drawn by the region’s enormous, but still mostly unexploited, natural resources in a push to diversify rare earths supplies and reduce dependence on China. “It is important for Central Asia, blessed with abundant resources and energy sources, to expand its access to international markets,” the statement said. The leaders agreed to promote cooperation that can help the “strengthening of critical minerals supply chains”, while also pledging to achieve economic growth and decarbonisation. The leaders agreed on Saturday to expand cooperation regarding “Trans-Caspian International Transport Route”, a logistics network connecting to Europe without passing through Russia. Efforts towards “safe, secure, and trustworthy Artificial Intelligence” were also agreed. Tokyo has long encouraged Japanese businesses to invest in the region, although they remain cautious. Other than rare earths, Kazakhstan is the world’s largest uranium producer, Uzbekistan has giant gold reserves and Turkmenistan is rich in gas. Mountainous Kyrgyzstan and Tajikistan are also opening up new mineral deposits. However, exploiting those reserves remains complicated in the harsh and remote terrains of the impoverished states. – AFP

o Crucial materials mined around the clock in the hills of Jiangxi province GANZHOU: Buried in the reddish soil of southern China lies latent power: one of the largest clusters of crucial rare earths is mined around the clock by a secretive and heavily guarded industry. The hills of Jiangxi province are home to most of China’s rare earth mines, with the materials used in a wide range of products including smartphones and missile guidance technology. The flourishing industry is closely protected by Chinese authorities and media access is seldom granted. In a rare visit to the region last month, AFP journalists were trailed and monitored by minders who declined to identify themselves. Companies did not accept requests for interviews. Business has been booming: the number of rare earth processing points in China observed by the US Geological Survey jumped from 117 in 2010 to 2,057 by 2017. Most of the 3,085 nationwide recorded by the USGS today are clustered in the hills of Jiangxi. Locals there told AFP that one rare earths mine was maintaining near-constant operations. “It’s busy 24 hours a day, seven days a week,” a resident in the town of Banshi said. Nearby, construction work was getting started for the day on a vast new industrial park housing facilities including rare earth processing sites. The bustling mining region is the result of a decades-long push by Beijing to build up its might in the strategic sector. Those efforts paid off this year, with a tentative truce in a trade war with the United States reached when China relaxed stringent export controls on rare earths. Washington is now racing to establish alternative supply chains, but experts warn such efforts will take years. In a sign of deepening concern among other Western governments, the European Union announced new measures this month to reduce the bloc’s dependence on China for securing the critical minerals. The bloc said it would earmark €3 billion (RM14.3 billion) to support projects in mining, refining and recycling vital materials, and proposed the creation of an EU supply hub – the

A view of the under-construction Rare Earth Industrial Park is seen in Anyuan county in Jiangxi province. – AFPPIC

years, as rainfall weathers igneous rocks, breaking them down and leaving elements concentrated near the surface. Jiangxi’s gentle slopes, high rainfall and natural stone make it a prime location for such elements. Mining methods in the region have evolved throughout the decades. Authorities have criticised highly destructive approaches and cracked down on what they call “chaotic extraction” since the early 2010s. One method – termed “moving mountains”– was described in 2015 by China’s top industry and technology regulator as “first cutting down trees, then clearing weeds and finally stripping away the topsoil, causing irreparable damage”. Unlicensed mining has been drastically reduced over time. Large signs in rural areas now warn against illegal extraction of rare earth resources. Others offer cash rewards for reporting such actions. The industry has been largely consolidated into two huge state-owned companies. On a Ganzhou street dubbed “Rare Earth Avenue”, construction workers bustled to complete a sprawling new headquarters for one of those giants, China Rare Earth Group. But the province’s hills still bear the scars of bygone mining practices, with bare patches of red soil visible where vegetation has struggled to regrow. – AFP

European Centre for Critical Raw Materials. “The Middle East has oil, China has rare earths,” former Chinese leader Deng Xiaoping said in a 1992 speech. Since then, China has taken advantage of its natural reserves – the largest of any country – to dominate processing and innovation in the field. The country’s rare earths industry is concentrated in two main hubs. One is the Inner Mongolia region’s Bayan Obo mining district on the edge of the Gobi Desert, which is rich in “light” rare earths used for magnets in everyday items. The other hub, around the city of Ganzhou in Jiangxi, specialises in “heavy” rare earths – harder to extract but more valuable because of their use in heat-resistant magnets, fighter jet engines, missile guidance systems and lasers. The rugged hills surrounding Ganzhou are home to the world’s largest mining and processing operations of the strategic “heavy” elements, including dysprosium, yttrium and terbium. And in the county-level district of Longnan alone, USGS counted 886 such locations, accounting for 31.5 percent of Jiangxi’s total. An AFP team in Longnan saw rows of large rare earths processing plants in an industrial district adjacent to that dense smattering of extraction sites. Heavy rare earths are formed over millions of The initial public offering, originally expected this month, was pushed back due to the 43-day-long US government shutdown, which ended in November. PayPay’s market debut, likely to raise more than US$20 billion, is now expected in the first quarter of next year, according to one direct source and another person familiar with the efforts. The Japanese conglomerate is also looking to cash out some of its holdings in Didi Global, the operator of China’s dominant ride-hailing platform, which is looking to list its shares in Hong Kong after a regulatory crackdown forced it to delist in the US in 2021, a source with direct knowledge said. Investment managers at SoftBank’s Vision Fund are being directed toward the OpenAI deal, two of the above sources said.

SoftBank races to fulfil US$22.5 billion funding commitment to OpenAI TOKYO: SoftBank Group is racing to close a US$22.5 billion funding commitment to OpenAI by year-end through an array of cash-raising schemes, including a sale of some investments, and could tap its undrawn margin loans borrowed against its valuable ownership in chip firm Arm Holdings, sources said. Son’s firm is working to take public its payments app operator, PayPay. SoftBank’s scramble to marshal funds offers a window into the strain faced even by the world’s biggest dealmakers as they scramble to finance ambitious AI data center projects worth hundreds of billions of dollars. SoftBank declined to comment. additional funding from investors, including Amazon, tripling its valuation to close to US$900 billion, one of the sources added, which would give SoftBank a significant paper gain once the transaction is completed.

A major pool of capital for SoftBank is its undrawn capacity of margin loans borrowed against its ownership of British semiconductor and software design company Arm Holdings. SoftBank recently expanded its margin loan capacity by US$6.5 billion, bringing the total undrawn capacity to US$11.5 billion. Arm’s stock has since tripled from its IPO price, providing SoftBank with additional collateral headroom to expand its borrowing capacity. SoftBank reported parent-level cash of ¥4.2 trillion (RM111 billion) as of Sept 30. The group still owns about 4% of T-Mobile US, a stake worth roughly US$11 billion at the end of September, according to LSEG data. – Reuters

OpenAI has not yet received the remaining funding, but expects the money to come in by the end of 2025, as stipulated in the contract, sources said. SoftBank has multiple sources of capital it could tap, including margin loans, cash on its balance sheet, stakes in listed companies, and corporate bonds or bridge loans, sources said. Son has strong reasons to draw on a range of funding mechanisms to fulfill those obligations. SoftBank secured a deal to invest in OpenAI at a US$300 billion valuation in April. Since then, the valuation of OpenAI has risen dramatically and the company is in talks to raise

The “all-in” bet on OpenAI is among the biggest yet by SoftBank CEO Masayoshi Son, as the Japanese billionaire seeks to improve his firm’s position in the race for artificial intelligence. To come up with the money, Son has already sold SoftBank’s entire US$5.8 billion stake in AI chip leader Nvidia, offloaded US$4.8 billion of its T-Mobile US stake, and slashed staff. Son has slowed most other dealmaking at SoftBank’s Vision Fund to a crawl, and any deal above US$50 million now requires his explicit approval, two of the sources told Reuters.