G7 Struggle to Contain China’s Critical Minerals Dominance
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- 5 min read
Date: 13/05/2026
The leaders of the G7 bloc, meeting in the Alpine spa town of Evian-les-Bains, on 17/06, tried to show a common front against China's dominance of the global critical minerals supply chain.
They only partially succeeded.
The discussions ended with a joint statement wherein the leaders committed to cooperation, but actual concrete measures were strikingly absent. All members agreed that China’s dominance over the critical minerals industry is a matter of national and international security.
In recent years, China has shown increasing boldness in using critical mineral exports as leverage in broader geopolitical disputes. When Japan’s Prime Minister, Sanae Takaichi, made comments about Taiwan in January, China immediately banned exports of certain rare earth elements. Since April 2025, amid the US-China tariff war, Beijing also introduced export controls on several key rare earths and magnets, with China adding 10 more American defence and rare earth companies on its export control list on 22/06.
However, despite this common agreement, G7 members severely differ in their preferred response, and this gap seems to only be widening.
The G7’s architecture
The G7 nations made a fair attempt at building a coordination architecture. The Évian declaration commits members to align stockpiling of minerals and share information on national systems, as well as recognizes the importance of recycling and transparency. More importantly, it stands up a non-binding Critical Minerals Resilience and Production Alliance, with the International Energy Agency (IEA) and Organisation for Economic Co-operation and Development (OECD) tasked to supply market data and early warnings of supply distortions. This initially might sound significant, but none of these agreements are binding or include actual steps to achieve these goals.
Additionally, the declaration sets the target of reducing dependence on any single supplier outside the G7 for rare earths and permanent magnets to under 60% by 2030, and lower thereafter. China is not named, but it is the only supplier the target description applies to.
This relatively toothless statement appears to be a diplomatic settlement, where the bloc’s common direction is announced, but any significant disagreements are left unresolved.
The common problem
China's sustained investment in the critical minerals industry means it now handles most of the world's rare earth processing. The problem goes beyond the extraction of minerals, where several G7 countries have already started to bridge the gap, and extends into midstream and downstream processing. China processes roughly 70% of the world's lithium, 65% of its cobalt and 85% of its rare earth elements.
Extraction is comparatively diversified: Australia leads global lithium output, the Democratic Republic of the Congo accounts for most mined cobalt, and the Lithium Triangle of Argentina, Chile and Bolivia holds vast brine reserves. Yet a mineral can be dug up outside China and still reach the market dependent on Beijing, because it must first be refined there. Almost 80% of the world's cobalt is processed in China despite being mined in the DRC, and the bulk of Australia's lithium is shipped to Chinese refineries.
This is why the G7's instinct to open new mines addresses the wrong stage of the chain. Catching up on extraction is slow in any case: the average lead time from discovery of a deposit to first production runs to around 15 years, and sites in Africa need heavy additional investment in power and logistics before they can produce at all.
It is here that the G7 most needs to catch up, but it is here, above all, that its responses diverge.
Different approaches
Under President Trump, the US has invested heavily in securitising its critical mineral industries and now wants to move quickly. An executive order has directed a ramp-up in domestic production, which Washington has paired with equity stakes in producers such as MP Materials and USA Rare Earth and a federal stockpile, Project Vault, capitalised at over $10 billion. Above all, it has closed a run of overseas supply deals at a pace no other G7 member has matched.
Most of these target extraction. Through its mediation of the Rwanda-DRC peace process, the US signed a Strategic Partnership Agreement with the Democratic Republic of the Congo on 4 December 2025, securing preferential access to copper, cobalt, zinc and gold. In April 2025, Ukraine agreed to a Reconstruction Investment Fund granting Washington preferential access to new mineral licences, including rare earths, titanium and lithium, in exchange for continued military support. And the January 2026 intervention in Venezuela, which removed President Maduro, is widely read as driven in part by the country's mineral and hydrocarbon wealth.
Canada has likewise ramped up domestic output, and unlike most partners it is investing in processing as well as extraction. It has also leaned into stockpiling, offering the other G7 members priority access to its critical mineral reserves.
Japan is the one G7 member with a substantial downstream base, presiding over a sophisticated rare earth magnet industry that is the only credible non-Chinese node in that part of the chain. Yet it remains far smaller than China's, and Tokyo has struggled to convert this into G7 backing after Beijing targeted the sector with its January 2026 export ban.
The UK has recently been investing significantly in reducing its import reliance regarding critical minerals, announcing another £50 million invested spread across the extraction, processing and recycling aspects of the supply chain on 22/06.
The EU has moved more cautiously. It has continued to engage Beijing diplomatically and has been slower than Washington to build domestic capacity or strike resource deals abroad, though it signed its own critical-minerals memorandum with the US in April 2026 and was due to debate tougher trade defence measures against China the day after the summit closed. France and Canada, meanwhile, have used successive summits to press for a multilateral solution, a G7-led trading bloc with shared governance.
The US has shown little interest in that approach, and it is this divergence over speed and structure that the rest of the response now turns on.
Dyami’s Assessment
The G7 will struggle to assemble a coordinated counterweight to China's control of the critical minerals supply chain in 2026.
The G7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) have just concluded a complex summit from 15-17/06 which showcased their common concern about China’s critical minerals influence. However, despite a shared posture, cracks have immediately appeared in the G7’s ability to form a common front and put together a long-term coordinated counter-balance.
Dyami assesses it is highly likely that the US course of fast bilateral resource deals, backed by domestic stockpiling and price intervention, becomes the de facto Western response, while European efforts toward a multilateral trading bloc stall for want of US participation.
This will see critical minerals remain a national-level policy, with any response aimed at China at risk of seeing Beijing weaponize its control of the downstream mineral supply chain.
