On August 18, 2021, the relevant ministries announced their plan to add new sectors relating to rare earth metals to the “designated sectors” and the “core sectors” within the Japanese foreign investment regulations, which are subject to prior notification and screening. The new sectors include metal mining businesses, metal mining equipment manufacture/repair/software businesses and port construction business in designated islands which are relevant to rare earth metals. This latest addition to the “designated sectors” and “core sectors” will have implications for foreigners and foreign entities who are investing in or have plans to invest in Japanese entities conducting businesses in the relevant rare earth metal businesses. The amendment is part of the Japanese government’s attempt to secure a stable supply of rare earth metals and to overcome the vulnerability in the supply chain currently dependent on imports from overseas. The last time an addition to the sectors was observed was in June 2020, when medical sectors were subjected to screening and prior notification in the wake of Covid-19. The public consultation period regarding the addition of new sectors on rare earth metals will last until September 16, 2021 and the amendment is expected to be enforced around November 2021.
