South Korea would also reap a windfall in reserves of rare earths, which are used in electronics.
The minerals are so-called rare earths, which are used in products like wind turbines and hybrid cars.
China accounts for more than 95% of global production of rare earths, which are dangerous and costly to extract.
Rogue operations in southern China produce an estimated half of the world's supply of heavy rare earths, which are the most valuable kinds of rare earth metals.
Chinese customs officials appeared to block crucial exports to Japan of rare earths, which are metals vital to Japan's auto and electronics industries.
China produces over 90 percent of the world's rare earths, which are used in products including computers, cellphones, hybrid cars and wind turbines.
Rare earths, which are used in a range of high-technology products, including smartphones, electric cars and military equipment, are found in nature with radioactive contaminants that must be separated and disposed of during refining.
The Chinese commerce ministry has denied that it is blocking exports of the minerals, known as rare earths, which are used in products like hybrid cars and wind turbines.
The deal is the latest effort by Japan to diversify its sources of the minerals, known as rare earths, which are vital to the production of a wide range of high-technology products.
But the moves also have potential international trade implications and have started yet another round of price increases for rare earths, which are vital for green-energy products including giant wind turbines, hybrid gasoline-electric cars and compact fluorescent bulbs.
