The Group of Seven (G7) countries will join forces to establish a strategic mechanism to strengthen the stability of rare earth and critical mineral supply chains, aiming to reduce reliance on China for various key materials and ensure the economic and national security of member countries remains uninterrupted. These minerals are commonly used in manufacturing high-tech and energy equipment such as smartphones, wind turbines, and more.
During the G7 summit, leaders reached a preliminary consensus and drafted a plan of action to address potential shortages in critical mineral supply chains to ensure stability.
According to draft documents obtained by Bloomberg, G7 leaders plan to issue a statement during the summit, jointly promoting an “action plan” to diversify sources of key metal supplies and encourage countries to “immediately and on a large scale invest” in relevant projects. While the draft does not directly mention China, it points out that the current industrial operating model poses a “threat” to the economies of the seven nations.
The draft states: “We have common interests in national security and economic security, which rely on resilient supply chains of critical minerals and should operate in accordance with market principles.” It further points out that “non-market policies and practices in the critical minerals sector are damaging or threatening our access to various important minerals, including those essential for manufacturing magnets and rare earth elements crucial for industrial production.”
Since April of this year, China has announced the suspension of exports of seven rare earth metals, including rare earths and magnet materials, and has implemented similar export controls on materials such as gallium, germanium, graphite, and antimony in the past two years, triggering disruptions in global supply chains and further exposing the risks of Europe and the United States’ reliance on China’s critical minerals.
Currently, China produces nearly 70% of the world’s rare earth minerals.
The document states: “We recognize the need for cooperative efforts to increase investment in G7 and global critical mineral projects. In order to ensure the stability of future supply chains, significant investments must be made immediately to ensure that these mining and processing projects can overcome obstacles such as delays in licensing and approval processes, market manipulation, and price fluctuations.”
The statement also encourages multilateral development banks and private sector lending institutions to provide more funding to help expedite critical mineral projects.
However, the draft has not yet been officially approved by the G7 leaders, leaving room for adjustments.
G7 members include the United States, Canada, Japan, Germany, the United Kingdom, France, Italy, and the European Union.