Finance ministers from the G7 and a group of allied economies have opened talks on how to curb reliance on China for rare earths and other critical minerals, after Beijing tightened export controls and targeted supplies to Japan.
The meeting, held in Washington on Monday and convened by the US Treasury Secretary Scott Bessent, brought together finance ministers from Japan, Britain, France, Germany, Italy, Canada and the United States, alongside officials from Australia, Mexico, South Korea and India. The US Trade Representative Jamieson Greer attended, as did representatives from the US Export-Import Bank and JP Morgan.
No joint statement was issued. Officials from several delegations nevertheless described “broad agreement” on the need to move quickly to diversify supply chains and build alternatives to Chinese processing and refining.
The US Treasury said Mr Bessent had called the session to discuss “solutions to secure and diversify supply chains for critical minerals, especially rare earth elements”. The department said he was optimistic participating countries would pursue “prudent de-risking over decoupling” from China, a formulation used by Western governments to describe reducing exposure to strategic dependencies without a full break in trade.
Japan’s finance minister, Satsuki Katayama, told reporters after the meeting that the participants broadly agreed on the need to “swiftly reduce reliance on China for rare earths”. She said Japan had presented policy options across the short, medium and long term, covering both supply and market measures.
Ms Katayama said these approaches included the creation of markets governed by standards, and the deployment of a wide range of policy tools. She listed support from public financial institutions, tax and other financial incentives, trade and tariff measures, quarantine measures and the setting of minimum prices. She said she had stressed the importance of committing to such measures.
A rare-earths price floor, discussed in Washington, would aim to provide predictable returns for non-Chinese producers, who have often struggled to compete with Chinese supply at lower prices. Participants also discussed new partnerships to expand alternative supply and processing capacity.
The talks come as governments place increased weight on access to minerals used in defence technologies, semiconductors, renewable energy equipment, batteries and industrial refining processes. Rare earths, a group of 17 elements used in high-performance magnets and other components, have long been a focus because China dominates extraction, processing and downstream manufacturing.
The International Energy Agency has estimated that China refines between 47 per cent and 87 per cent of global supplies of key minerals including copper, lithium, cobalt, graphite and rare earths, depending on the commodity. While some allied countries are significant producers of certain minerals, processing and refining capacity remains concentrated in China.
The Washington meeting also followed a new round of Chinese export restrictions affecting Japan. Last week, China banned exports of items destined for Japan’s military that have both civilian and military uses, including some critical minerals. China has also imposed strict export controls on rare earths, and a US official said on Sunday that Mr Bessent planned to urge participants to step up efforts to reduce reliance on Chinese supply.
Germany’s finance minister, Lars Klingbeil, said the meeting had covered the idea of a rare-earths price floor as well as partnerships to boost supplies, while noting that discussions were at an early stage and many points remained unresolved. Mr Klingbeil said rare earths and critical mineral supplies would be a central topic during France’s presidency of the G7 this year.
He also cautioned against presenting the effort as an anti-China coalition, saying Europe needed to move faster on its own programme to secure supplies of important raw materials. “What is very important to me is that we in Europe do not sit back,” he said. “Neither complaining nor self-pity helps us, we have to become active.”
Mr Klingbeil pointed to a new German raw materials fund and said the European Union needed more financing at the bloc level. He also called for faster progress on recycling, describing it as having “big potential” to reduce dependencies and broaden supply.
South Korea’s finance minister, Koo Yun-cheol, told the meeting that global value chains should be strengthened on the basis of comparative advantage, and highlighted recycling of critical minerals as a means to improve supply resilience, according to a statement from his ministry. Mr Koo also urged countries to pursue cooperation centred on corporate projects. The ministry said Canada and Australia had asked South Korea for collaboration on technology.
Collectively, the participating countries and the EU account for about 60 per cent of global demand for critical minerals, but much of the supply chain runs through China, particularly in processing. Efforts to diversify supply therefore extend beyond mining to the construction of refining and separation facilities, and to the development of commercial markets that can support non-Chinese production.
Further discussions are expected under the French G7 presidency, with the Washington talks framed as an opening exchange rather than a finalised programme. The immediate focus, officials indicated, is on combining finance, trade and industrial policy tools to build additional supply, expand recycling and reduce exposure to export controls on strategically important minerals.
