On June 17, 2026, the Group of Seven (G7) issued a joint statement on critical minerals at its summit in Évian-les-Bains, France, formally setting a quantitative target for “de-risking” the supply chain of rare earths and permanent magnets: by 2030, no single country should account for more than 60% of the G7’s imports of rare earths and permanent magnets, with the aim of further reducing that share to 50% as soon as possible thereafter. Although the statement did not name any country directly, it was widely interpreted as a clear reference to China.
China’s dominance is the root of G7’s anxiety
The G7’s concern is not unfounded. China holds a near-monopoly position in the global rare earth supply chain. In 2025, China’s rare earth production reached 270,000 tonnes, accounting for 69.2% of the global total of 390,000 tonnes, while it also controlled roughly 90% of global rare earth refining and processing capacity. According to the International Energy Agency (IEA), among 20 major strategic minerals, China is the leading refiner for 19 of them, with an average market share of 70%. In certain specific areas, China’s dominance is even more striking – it produces 85% of the world’s processed cobalt and 99% of primary gallium.
In 2025, China imposed export controls on a wide range of critical minerals and rare earth products, which at one point threatened to disrupt the normal operation of global manufacturing supply chains. Several European and American automakers were forced to cut production due to shortages of permanent magnets. Goldman Sachs estimated that a 10% disruption in rare earth supply could result in economic output losses of up to $150 billion.
A historical lesson: Japan’s 15 years of effort, still unable to shake off 75% dependence
While the G7’s 2030 target is ambitious, the challenge of achieving it should not be underestimated. Japan’s experience offers the most direct warning. In 2010, China imposed export restrictions on rare earths to Japan. Since then, the Japanese government has invested significant resources in diversifying its supply sources, actively developing overseas mines and investing in alternative technologies. Yet 15 years later, Japan still sources about 75% of its rare earth imports from China. For heavy rare earth elements such as dysprosium and terbium, Japan’s dependence on China remains as high as 100%. This reality underscores that truly breaking free from China’s rare earth supply chain is by no means an overnight achievement.
The practical obstacles to building alternative supply chains
Diversifying the rare earth supply chain faces multiple structural hurdles. First, rare earth mining and refining are inherently polluting, costly, and technologically demanding activities. Many Western countries possess rare earth resources, but stringent environmental regulations and strong local community opposition often mean that new mine development can take over a decade. Second, the rare earth industry requires a complete processing and manufacturing ecosystem – from mining and separation to smelting and magnet production – and China has built a fully integrated industrial chain over several decades. Even if Western countries succeed in increasing mineral supply, without corresponding refining and manufacturing capabilities, they will still struggle to reduce their reliance on China.
The IEA’s projections reinforce this point: even based on current globally developing projects, China’s share of rare earth refining is expected to fall only from 91% to 77% by 2035. In other words, a decade from now, China will still control more than three-quarters of the world’s rare earth refining capacity.
Final thoughts
The G7’s move to set a “60% red line” for rare earth dependence is undoubtedly a significant declaration on critical minerals supply chain security. However, there is a wide gap between a quantitative target and actual implementation, with obstacles ranging from capital and technology to environmental constraints and time. For China, the “strategic card” of rare earths remains firmly in its hands for the foreseeable future; for the G7, the long road to reducing dependence has only just begun. This contest over critical minerals is destined to be a protracted one.
