The group of nations aims to significantly reduce its dependence on individual suppliers for rare earths and permanent magnets.
The G7 countries plan to expand their cooperation on critical minerals and reduce their dependence on imports. The leaders of the group of major industrialized economies agreed on the measures at their meeting in Évian-les-Bains, France.
Specifically, the G7 wants to reduce its dependence on individual suppliers of rare earths and the permanent magnets made from them. By 2030, no single supplier outside the G7 and its partner countries is to account for 60 percent or more of demand. Over the longer term, the goal is 50 percent. Similar targets are also to be set for other critical minerals.
Although China is not mentioned by name in the joint declaration (PDF), the measures are likely aimed primarily at the country, which dominates the global market for rare earths and many other minerals. China’s export controls have repeatedly restricted supply security for Western countries and exposed the vulnerability of their supply chains.
Coordinating Stockpiles, Setting Recycling Targets
The G7 also aims to expand national stockpiling of critical minerals and improve coordination among member states. Another focus is recycling and the circular economy. By the end of the year, the countries plan to develop targets for selected critical minerals or their derivatives.
Greater transparency in supply chains is also part of the G7 plans. Harmonization and traceability will initially be tested for lithium and nickel. After that, the mechanism is set to be expanded each year to include five additional critical minerals, with a focus on rare earths.
On financing, the G7 is relying on stronger coordination among development banks, export credit agencies, and private capital. Additional instruments are also being examined, including joint procurement, quotas, and price floors. The latter had been a recurring topic of discussion among G7 countries in recent months after the United States guaranteed minimum prices to its most important rare earth producer as part of a deal. However, some countries expressed reservations about this approach, Reuters reported, citing diplomatic sources.
IEA, OECD, and JOGMEC Involved
To implement the measures and facilitate exchange among all participating countries, a new platform will be established. The International Energy Agency (IEA) and the Organisation for Economic Co-operation and Development (OECD) will support the platform, including by providing early warnings about risks in supply chains. For strategic stockpiling, the G7 also plans to draw on the expertise of JOGMEC, the Japan Organization for Metals and Energy Security. Japan is often cited as a pioneer in resilient supply chains.
The 60 percent target for rare earths in particular will be challenging, Reuters cited analysts as saying. One market expert described the G7 declaration as an important signal, but said the pace of implementation will ultimately depend on political support, including investment in midstream and downstream parts of the value chain.
The targets are reminiscent of the EU’s Critical Raw Materials Act (CRMA). Under the CRMA, the EU aims to ensure that by 2030 it is no more than 65 percent dependent on a single third country for any strategic raw material. When the CRMA entered into force, its targets were also described as ambitious, while the path toward implementation was criticized as insufficiently concrete. Industry representatives mainly pointed to the lack of adequate financial support. This assessment was reinforced a few months ago by a report from the European Court of Auditors, which found that achieving the targets is at risk.
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