Key Players and Their Objectives
The G7 energy ministers announced on Thursday in Canada the launch of an “alliance” to counter China’s control over rare earths, ensuring more reliable access to these critical resources for future technologies.
This two-day meeting of energy ministers in Toronto took place shortly after the signing of an agreement between US President Donald Trump and Chinese President Xi Jinping on the supply of rare earths, which are used in numerous products, from solar panels to precision-guided missiles.
German Minister Highlights Dependence on China
“This is a positive sign,” said German Economy and Energy Minister Katherina Reiche at a press conference, emphasizing Germany’s reliance on Chinese exports of rare earths.
In response to China’s growing dominance in refining and processing rare earths, G7 leaders initiated a “Critical Minerals Action Plan” in June during their summit in Canada, separate from the Toronto meeting.
Formalizing the Plan in Toronto
Canadian Energy Minister Tom Hodgson confirmed that the meeting in Toronto will formalize this plan by creating the “Alliance for Critical Minerals Production.”
“The objective is to establish transparent, democratic, and sustainable critical minerals supply chains at the G7 level,” Hodgson added.
Investing to Reduce China’s Influence
The United Kingdom, Canada, France, Germany, Italy, Japan, and the United States will mobilize private investments to increase critical minerals production, avoiding dependence on China and thus reducing its market influence.
Tae-Yoon Kim, head of the Rare Earths division at the International Energy Agency, sees the Toronto meeting as “a significant opportunity” to start redistributing market power.
Risks of China’s Dominance
“The strong concentration of critical minerals processing in one country (China) creates economic and national security risks,” explained Kim to AFP.
Although many countries possess significant mineral reserves, China dominates due to its processing and refining capabilities, especially of rare earths, which are used in numerous daily and high-tech devices.
Since a significant portion of minerals passes through companies controlled by China, Beijing can consolidate its reserves and control global supply.
Key Questions and Answers
- What are rare earths and why are they important? Rare earths are a group of 17 chemical elements crucial for various modern technologies, including smartphones, electric vehicles, and renewable energy systems.
- Why is China’s dominance a concern? China’s control over rare earth processing and refining poses economic and national security risks, as it can manipulate supply and influence global markets.
- What is the G7 alliance aiming to achieve? The alliance seeks to establish transparent, democratic, and sustainable critical minerals supply chains among G7 nations to reduce dependence on China.
- How will the alliance be funded? The G7 countries will mobilize private investments to boost critical minerals production and processing capabilities.
