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Maria Siow

A US-led meeting with its allies to reduce the global reliance on rare earths from China was an “easy sell”, even as analysts warn that such an ambitious goal would depend on their long-term investment commitments and ability to narrow differences over national policy.
On Monday, the US hosted a meeting in Washington with G7 finance ministers and other allies, including Australia, India, South Korea and the EU, to address vulnerabilities in the rare earth supply chain, as they close ranks against what they perceive as coercive Chinese control of the export of the critical minerals.
Convened by US Treasury Secretary Scott Bessent, the talks were reportedly initiated following China’s announcement in October on such curbs.
The agenda items included proposals to set price floors to make non-Chinese rare earth projects more viable and explore new partnerships for alternative supplies.
“Urgency is the theme of the day. It’s a very big undertaking. There’s a lot of different angles, a lot of different countries involved, and we need to move faster,” an official associated with the event said.
Under Beijing’s export controls for rare earths, as well as related Chinese technologies, foreign firms have to acquire licenses for exports of these critical minerals.
The curbs are widely seen as targeting the defence and advanced technology sectors, particularly those in the US, Europe and Japan.
They recognise the vulnerable position they are in
Stephen Olson, ISEAS-Yusof Ishak Institute’s visiting senior fellow
Stephen Olson, visiting senior fellow at the Singapore-based ISEAS-Yusof Ishak Institute, said many countries were increasingly concerned about China’s dominant market position in the rare earths sector.
“These countries will work together cooperatively to develop alternative rare earth supplies. They recognise the vulnerable position they are in,” Olson added.
Jon Lang, senior director and head of economic security policy at APCO, a global advisory firm based in Washington, said while the US had taken the lead in diversifying critical minerals from China, its efforts were “an easy sell”, pointing to Beijing’s “broad economic coercion” due to its market clout.
China’s export controls had heightened economic and other security concerns for many countries, leading to a “unified resolve” among the G7 nations to tackle the problem, Lang said.
The meeting could also be seen as a show of support for Japan, as it had been an “early victim” of China using rare earths as a tool of trade coercion since 2010, he added.
Tensions have risen recently between Beijing and Tokyo after Japanese Prime Minister Sanae Takaichi said in November that a Chinese attack on Taiwan could trigger a military response under Japan’s self-defence laws.
Beijing sees Taiwan as part of China to be reunited by force if necessary. Most countries, including the US and Japan, do not recognise Taiwan as an independent state, but Washington is opposed to any attempt to take the self-governed island by force and is committed to supplying it with weapons.

China subsequently imposed retaliatory measures, including suspending Japanese seafood imports and restricting dual-use exports, such as rare earths.
Naoise McDonagh, MBA director and senior lecturer in the School of Business and Law at Edith Cowan University, said the meeting in Washington was a sign that the G7 and its allies were willing to invest heavily to lower the risks arising from China’s dominance in critical minerals.
“[This has] raised the prospect for China that its vice-like grip over processed critical minerals may finally be facing serious disruption,” he said.
McDonagh cited moves by mineral-producing countries such as Australia to invest in developing related facilities. One such project is the Eneabba rare earths processing plant being built by Iluka Resources in Western Australia.
Whether the talks among G7 nations would translate into tangible results depends on an alignment of their political goals and investment commitments as well as a resolution of their differences, according to McDonagh.
For instance, the Nato members within the G7 might disagree with the US plan to control Greenland, and this could affect plans by the bloc of advanced economies to cooperate on critical mineral production and supply, he said. Washington says it plans to tap Greenland for its rare earths, citing security reasons.
“Non-US Nato members are likely to consider whether they need their own independent supply chain to guarantee accessibility to critical minerals, while also being more nuanced towards how they frame competition with China,” McDonagh said.

China’s ‘substantial leverage’
On Monday, Chinese nationalistic tabloid The Global Times described the G7 meeting as reflecting America’s “strategic anxiety” in achieving “dominance” in critical minerals. It described Washington’s goal as “unachievable” due to what it calls “the current supply/demand dynamics”.
Nonetheless, China is concerned about countries around the world relying less on its critical minerals, given the increased investments to develop extraction and processing facilities in locations elsewhere, Lang said.
China’s announcement in October that the rare earth curbs would apply globally, instead of being more targeted, had prompted countries around the world to step up efforts to diversify their supply of rare minerals, Lang said.
“The global nature of the action drove an international response, better enabling coordinated diversification, including through the G7,” Lang said.
Nonetheless, McDonagh said that China’s enormous clout in the sector was safe in the short term, as the current diversification activities of other countries in key critical minerals would take three to five years to bear fruit.
Olson said, however, that the push towards diversification would not affect China’s market dominance for a much longer period.
“The good news is that they will continue to enjoy substantial leverage on rare earths for years, if not decades, to come. It will take a long time for the rest of the world to catch up.”


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The Sermitsiaq mountain, as seen behind Nuuk in Greenland. The US is seeking to control Greenland, in part to gain access to the territory’s critical minerals. Photo: AFP

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US President Donald Trump and Japan’s Prime Minister Sanae Takaichi during a signing ceremony for an agreement on critical minerals and rare earths in Tokyo on October 28. Takaichi has long been a proponent of exploiting Japan’s reserves of minerals and rare earth elements. Photo: EPA

Workers use machinery to dig at a rare earth mine in Ganxian county in central China’s Jiangxi province. China produces the bulk of the world’s rare earths. Photo: Chinatopix via AP

Workers check drilling machines on Japan’s deep-sea drilling vessel, Chikyu. Photo: AFP

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Economics

Washington is working with its allies to accelerate projects in rare earths and diversify their supply in response to China’s export curbs


Washington is working with its allies to accelerate projects in rare earths and diversify their supply in response to China’s export curbs.


Can US-led bloc ease China’s ‘vice-like grip’ on rare earths?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Washington is working with its allies to accelerate projects in rare earths and diversify their supply in response to China’s export curbs

Washington is working with its allies to accelerate projects in rare earths and diversify their supply in response to China’s export curbs