Finance ministers from the G7 and other major economies on Monday met in Washington to discuss ways to reduce dependence on rare earths from China, including setting a price floor and new partnerships to build up alternative supplies, ministers said.
The meeting, convened by US Secretary of the Treasury Scott Bessent, included finance ministers from G7 members Japan, the UK, France, Germany, Italy, Canada and the US, as well as officials from Australia, Mexico, South Korea and India.
US Trade Representative Jamieson Greer and representatives from the US Export-Import Bank and JPMorgan also attended, but no joint statement was issued by the meeting’s participants.
Photo: Reuters
The Treasury said in a statement that Bessent sought “to discuss solutions to secure and diversify supply chains for critical minerals, especially rare earth elements,” and expressed optimism that countries would pursue “prudent de-risking over decoupling” from China.
A US official on Sunday said that Bessent was going to urge participants to step up efforts to reduce reliance on critical minerals from China, which has imposed strict export controls on rare earths, most recently on supplies to Japan.
Japanese Minister of Finance Satsuki Katayama told reporters on Monday evening that there was “broad agreement on the need to swiftly reduce reliance on China for rare earths.”
She said she outlined short, medium and long-term policy approaches for G7 and like-minded countries to bolster non-Chinese rare earth supplies.
“These include creating markets based on standards such as respect for labor conditions and human rights, as well as deploying a range of policy tools — support from public financial institutions, tax and financial incentives, trade and tariff measures, quarantine measures and minimum price setting,” Katayama said. “I stressed the importance of committing to these measures.”
A spokesperson for China’s embassy in Washington could not be immediately reached for comment.
The participating countries and the EU account for 60 percent of global demand for critical minerals. However, China dominates the supply chain, refining between 47 and 87 percent of copper, lithium, cobalt, graphite and rare earths, the International Energy Agency said.
The minerals are essential for defense technologies, semiconductors, renewable energy components, batteries and refining processes.
Last week, China banned exports of items destined for Japan’s military that have civilian and military uses, including some critical minerals.
German Minister of Finance Lars Klingbeil said discussions at the meeting included a potential rare-earths price floor and partnerships to boost supplies, but added the talks had just begun with many unresolved issues.
He said rare earths and critical mineral supplies would be a central topic under the French presidency of the G7 this year.
However, he warned against an anti-China coalition, saying that Europe needs to move faster on its own to develop supplies of important raw materials.
“What is very important to me is that we in Europe do not sit back,” Klingbeil said. “Neither complaining nor self-pity helps us, we have to become active.”
He added that the EU needed more financing at the bloc level, pointing to a new German raw materials fund.
The EU must also move forward urgently on recycling, Klingbeil said, citing its “big potential” for reducing dependencies and broadening supply.
South Korean Minister of Finance Koo Yun-cheol said at the meeting that global value chains should be strengthened based on comparative advantage, emphasizing the importance of recycling critical minerals for resilient supply chains, its ministry said in a statement.
Koo also urged countries to pursue corporate projects-oriented cooperation, while Canada and Australia asked South Korea for technology collaboration, the ministry added.
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