Toronto (Canada) (AFP) – The G7 announced two dozen new projects Friday aimed at reducing China’s dominance of critical mineral supply chains, as Canada’s energy minister vowed the alliance was “serious” about reforming the global market. The deals, announced as Group of Seven energy ministers concluded a meeting in Toronto, involve a range of metals essential to high-tech products, including the rare earth materials where China has built outsized control.
The initial steps taken by the newly launched G7 Critical Minerals Production Alliance “sends the world a very clear message,” Canada’s Energy Minister Tim Hodgson told reporters. “We are serious about reducing market concentration and dependencies,” he said, referencing China. Ministers from Britain, Canada, France, Germany, Italy, Japan, and the United States met in Toronto after US President Donald Trump and China’s President Xi Jinping reached a deal that will see Beijing suspend certain rare earth export restrictions for at least one year.
Rare earths are needed to make the magnets used in a range of sophisticated products, and the prospect of China limiting exports had rattled markets. China has overwhelming dominance in the processing of rare earths, and Hodgson conceded that broadening supply chains would take time. He said the goal was building systems that stretch from “from mine to magnet.” “That doesn’t exist in the West today… It will take time,” he said.
The 26 projects announced include partnerships across the G7 and its allies, but the United States has not initially signed on to a specific arrangement.
By US Energy Secretary Chris Wright, who attended the meeting, had earlier told reporters that Trump’s administration was in full alignment with G7 allies on countering China’s market influence. There was “no disagreement within the group,” Wright said. He also said the G7 will have to use “non-market” tactics to counter China’s position.
“China, frankly, just used non-market practices to squish the rest of the world out of manufacturing those products, so it got strategic leverage. Everybody sees that now,” Wright told reporters.
“We need to establish our own ability to mine, process, refine, and create the products that come out of rare earth elements,” Wright said. “We’re going to have to intervene and use some non-market forces.” Repeating a widely shared accusation made against Beijing, Wright said China had used its rare earth stockpiles to manipulate global prices. “As soon as you start to invest, someone floods the market and crushes the prices. (China has) chilled investments,” he said.
© 2024 AFP
