The U.S. convened a meeting of G7 finance ministers to address China’s dominance in rare earth elements. South Korea was also present at the gathering.
Reuters and NHK reported that a Critical Minerals Meeting was held on Monday evening in Washington, D.C., at the initiative of the U.S. Finance ministers from G7 member countries – the U.S., Japan, UK, Canada, Germany, France, and Italy – along with representatives from Australia, Mexico, and South Korea attended the meeting.
The discussions centered on strategies to diversify supply chains for critical minerals, including rare earths, to reduce over-reliance on specific countries.
Sources indicate that the U.S. expressed grave concerns about the increasing dependence on China, outlined its own response efforts, and called for enhanced cooperation among nations.
Following the meeting, U.S. Treasury Secretary Janet Yellen issued a statement through the Treasury Department, saying they had discussed ways to secure and diversify supply chains for critical minerals, particularly rare earths.
Yellen noted that countries should pursue careful de-risking rather than complete decoupling, acknowledging the need to address current vulnerabilities in critical mineral supply chains. This approach suggests a strategy aimed at mitigating risks to withstand shocks, rather than entirely excluding China.
Secretary Yellen also urged participants to bolster the resilience of their supply chains.
The U.S. spearheaded this meeting. Yellen had previously met with G7 leaders last June to agree on an action plan for securing critical mineral supply chains, but frustration grew as those countries did not urgently implement the plan.
The participating countries collectively account for 60% of global demand for critical minerals. However, despite efforts to diversify supply chains, they still heavily rely on Chinese sources for these resources.
The International Energy Agency (IEA) reports that China refines 47% to 87% of copper, lithium, cobalt, graphite, and rare earths, effectively dominating the critical minerals supply chain. These minerals are crucial for defense technology, semiconductors, renewable energy components, batteries, and refining processes.
In light of China’s recent announcement of export controls on dual-use (military and civilian) goods, Japan, which faces increased pressure, expressed its concerns during the meeting.
Japanese Finance Minister Shunichi Suzuki recounted China’s intensified export restrictions on rare earths following the 2010 collision incident involving Chinese fishing vessels near the Senkaku Islands in Okinawa Prefecture. He highlighted Japan’s subsequent efforts to secure alternative suppliers and develop domestic technologies, as reported by NHK.
It remains unclear whether the participating countries reached any specific joint actions or immediate agreements during this meeting.
Minister Suzuki is scheduled to hold a press conference to elaborate on the discussions and outline future strategies.