G7 Unveils Strategic Plan to Counter China’s Critical Mineral Monopoly

G7 leaders have officially committed to a coordinated global strategy to reduce dependence on China for essential minerals required for defense, AI, and green energy. By implementing stockpiling, recycling, and new monitoring mechanisms, the group aims to secure supply chains against geopolitical volatility.

Setting Aggressive Diversification Targets for 2030

The G7 nations have established clear benchmarks to mitigate the risks associated with single-supplier dominance. While avoiding a direct naming of China, the leaders set a target to reduce reliance on any single supplier outside the group for rare earth elements and permanent magnets to below 60% by 2030. The long-term objective is to drive this figure down to 50% as soon as possible.

This urgency follows recent disruptions caused by China’s export restrictions on permanent magnets, which highlighted the extreme vulnerability of Western industries. To achieve these goals, the group is focusing on building "harmonised, interoperable mechanisms" for supply chains, starting with pilot projects centered on lithium and nickel. These pilots are designed to streamline movement without imposing excessive cost burdens on industries.

The Role of the IEA and New Monitoring Platforms

To ensure market stability, the G7 will establish a dedicated platform to coordinate policies, enhance data sharing, and respond rapidly to supply shocks. A significant component of this initiative is the expanded role of the International Energy Agency (IEA). The IEA will be tasked with monitoring global markets and providing critical "early warnings" regarding market distortions.

Following the initial lithium and nickel pilots, the G7 plans to expand its scope by adding five additional minerals each year, with a heavy emphasis on rare earth elements. This structured expansion is intended to create a predictable framework for investors and manufacturers involved in the electric vehicle (EV) and renewable energy sectors.

Massive Investment and the Recycling Mandate

Achieving mineral independence is a capital-intensive endeavor. Analysts note that China currently controls approximately 90% of global production for processed rare earths and permanent magnets. To bridge this gap, the G7 is calling for synergy between development finance institutions, export credit agencies, and private enterprises. This momentum is already visible, with 195 critical mineral projects announced since the start of 2026, representing an investment of roughly €64 billion ($74 billion).

Beyond extraction, the G7 is turning toward a circular economy. The group has pledged to expand recycling capacity so that recycled minerals account for a "significant share" of annual consumption by 2030. To protect against sudden shortages, members are also increasing domestic stockpiles. Notable examples include the United States' $12 billion "Project Vault" and the European Union’s shortlist of tungsten, rare earths, and gallium for its first joint stockpile.

Key Takeaways