*

China expands curbs on rare earths

*

Rare earths, critical minerals are key electronic

components

*

Essential for items from cars to fighter jets

*

U.S. presses Japan to curb Russian energy imports

*

Japan steps up U.S. LNG investments

By Trevor Hunnicutt and Katya Golubkova

TOKYO, Oct 28 (Reuters) - U.S. President Donald Trump

and Japanese Prime Minister Sanae Takaichi signed a framework

agreement on Tuesday for securing the supply of rare earths, as

both countries aim to reduce China's dominance of some of the

key electronic components.

The leaders signed the documents, which included critical

minerals, at the neo-Baroque-style Akasaka Palace in Tokyo,

beneath three chandeliers decorated from top to bottom with gold

ornamentation, as aides applauded.

No direct mention was made publicly by the leaders about

China, which processes over 90% of the world's rare earths,

making it the source of each country's concern about its mineral

supply chain. Beijing has recently expanded export curbs.

Trump and Chinese President Xi Jinping are set to meet on

Thursday on the sidelines of the Asia-Pacific Economic

Cooperation in South Korea to discuss a deal that would pause

steeper U.S. tariffs and Chinese rare earths export controls.

Japan and the U.S. would use economic policy tools and

coordinated investment to speed up the "development of

diversified, liquid, and fair markets for critical minerals and

rare earths", and aim to provide financial support to selected

projects within the next six months, the White House said.

Both countries would consider a mutually complementary

stockpiling arrangement and cooperate with other international

partners to ensure supply chain security, it added in a

statement.

While dominated by China, the U.S. and Myanmar control 12%

and 8% of global rare earth extraction, according to Eurasia

Group, and Malaysia and Vietnam cover another 4% and 1% of

processing, respectively.

U.S. ENERGY SUPPLIES

Japan has pledged a $550 billion investment into the U.S.

economy, part of the wider bilateral trade deal, which could

include power generation and liquefied natural gas, among other

areas, according to sources familiar with the talks.

Ahead of Trump's Asia trip, the U.S. called on Russian

energy buyers, including Japan, to cease imports, and imposed

sanctions on Moscow's two biggest oil exporters - Rosneft

and Lukoil - to push the Kremlin to the

negotiation table to end the war in Ukraine.

Japan has stepped up U.S. LNG purchases in the last few

years as it tries to diversify away from its key supplier

Australia and prepare for supply contract expirations from

Russia's Sakhalin-2 LNG project, which Mitsui ( MITSF ) and

Mitsubishi ( MSBHF ) helped to launch in 2009.

In June, JERA, Japan's top LNG buyer, agreed to buy up to

5.5 million metric tons per annum of U.S. LNG under 20-year

contracts, with deliveries starting around 2030. This is roughly

the same amount Japan imports annually from Sakhalin-2.

Most supply from Sakhalin-2, which covers 9% of Japan's gas

needs, ends in 2028-2033. Japan buys less than 1% of its oil

imports from Russia under a sanctions waiver, with the bulk of

its oil supply covered by the Middle East.

Last week alone, Japan's biggest city gas supplier, Tokyo

Gas ( TKGSF ), signed a preliminary deal to buy 1 million metric

tons per annum of LNG from the Alaska LNG project, following a

similar announcement from JERA in September.

JERA pledged $1.5 billion for gas assets in Louisiana in

its first foray into upstream production in the U.S., where

Tokyo Gas ( TKGSF ) and Mitsui ( MITSF ) are already present.

To keep electricity prices in check, Japan wants to

continue Sakhalin-2 LNG imports, a senior official has said, as

it takes only a few days to deliver LNG to Japan compared to

around a week from Alaska and roughly a month from the U.S. Gulf

Coast.

"The U.S. said it wants Japan to stop importing Russian

energy - but this is Japan's closest LNG source and which is

also cheap," said Nobuo Tanaka, chief executive with Tanaka

Global, Inc. advisory.

"I think the question should be framed this way: can the

U.S. provide Japan with LNG as cheap as what currently comes

from Russia? Can gas from Alaska be that affordable?"