G7 to accelerate critical minerals supply chain diversification and weaken Chinese hegemony

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An agreement has been reached among the Finance Ministers of the Group of Seven (G7) nations to increase the pace of critical minerals supply chain diversification in order to break free from the Chinese hegemony over the market. Held on Friday, in Washington, the G7 meeting agenda was to address the growing concerns over China’s dominance in critical minerals, including rare earth elements, focusing on securing supply chains and exploring coordinated strategies, including incentives to boost alternative sources. 

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The discussion was held among core partner economies and senior officials of the group, viz., Canada, France, Germany, Italy, Japan, the UK, and the US. Representatives from the Asian Development Bank and international financial institutions, and mineral-producing countries, such as Australia, Argentina, India, Indonesia, South Korea and South Africa, were also invited. 

The meeting was co-chaired by France and Japan. The latter nation was represented by the Japanese Finance Minister Katayama Satsuki. "We specifically discussed how to strengthen the supply chains of critical minerals," she stated.

Referring to the collaboration with the mineral-producing nations, she emphasised, “It's a win-win situation for everyone. We can secure stable suppliers across a wide range of countries,” and added that it provides them with “an opportunity for new business and growth.”

She further highlighted the “potential for collaboration” that is capable of delivering as a “significant promise for the future.” 

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On a global scale, China accounts for about 70 per cent of rare earth mining and almost 90 per cent of refining capacity, indicating its dominance in supplying materials critical to high-tech manufacturing.

Katayama advocated the urgency for other nations to reduce their overreliance on China for critical minerals trade and supply. She observed, “In any case, since China's weaponisation poses a threat to everyone, we need to do something about it.”

Japan also announced a USD 20 million contribution to a new initiative led by the Asian Development Bank, aimed at providing technical assistance for mining and infrastructure projects across resource-rich regions.

Participants reaffirmed their commitment to collaboration between producing and importing countries to develop more diversified and resilient supply chains.

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