U.S. and Allies Intensify Efforts to Reduce Reliance on Chinese Critical Minerals

U.S. Treasury Secretary Scott Bessent is set to host a high-level meeting of finance ministers from the Group of Seven (G7) nations, the European Union, Australia, India, South Korea, and Mexico in Washington, D.C. The meeting, which begins with a dinner on January 11, 2026, aims to address the urgent need to reduce reliance on critical minerals sourced from China. This initiative comes in response to China's significant control over the global supply chain for these essential materials, which are crucial for defense technologies, semiconductors, renewable energy components, and batteries. The G7 countries collectively account for 60% of global demand for critical minerals.

ReutersUnited States pushes G7 and global partners to reduce dependence on China’s critical mineralsABC News Australia

The urgency of this meeting stems from China's dominance in the critical minerals sector, where it refines between 47% and 87% of essential materials such as copper, lithium, cobalt, graphite, and rare earth elements. The G7 leaders previously agreed on an action plan during a summit in Canada in June 2025 to secure supply chains and strengthen their economies, but progress has been slower than anticipated. Japan has been particularly vocal in advocating for coordinated action following recent Chinese export restrictions affecting rare earths.

United States pushes G7 and global partners to reduce dependence on China’s critical mineralsABC News AustraliaReuters

In parallel, Australia has announced a $1.2 billion (A$1.2 billion) strategic reserve aimed at stockpiling critical minerals, including antimony, gallium, and rare earth elements. This initiative is designed to bolster supply chains and mitigate vulnerabilities associated with China's market dominance. Australian Treasurer Jim Chalmers emphasized that the reserve will ensure Australia remains a key player in the global critical minerals market, providing essential resources to allies while stabilizing prices and enhancing investment in local mining projects.

Australia bets on $1.2 billion critical minerals reserve to beat China’s dominanceReutersCityLab

Bessent has expressed frustration over the lack of urgency among G7 members regarding their dependence on Chinese minerals, stating, "Urgency is the theme of the day. It's a very big undertaking... we really just need to move faster." Chalmers echoed this sentiment, highlighting that "the world needs critical minerals—Australia has plenty of them," and the reserve will help weather global economic uncertainty.

Critical Minerals Focus Of G7+ Ministers Meetings In US

Despite the positive outlook from U.S. and Australian officials, some experts caution that building alternative supply chains will take years and require substantial investment. Critics argue that focusing on new mining projects in regions like Greenland may not yield immediate results, as many of these initiatives are still in exploratory stages and face significant logistical and environmental challenges.

The Globe and Mail (Toronto)

The G7 meeting is expected to result in discussions about shared stockpiling strategies and financing mechanisms to support alternative supply sources. However, no immediate collective actions are anticipated. The U.S. is also pursuing bilateral agreements with countries like Ukraine to further reduce reliance on Chinese minerals, reflecting both economic and strategic imperatives.

US hosts G7 talks on rare earths to counter China’s supply dominance

While there is a consensus on the need to diversify supply chains, discrepancies exist regarding the effectiveness of current initiatives. Some reports indicate that China continues to fulfill its commitments to supply critical minerals to the U.S., while others highlight ongoing tensions and export restrictions affecting Japan and other nations.

US hosts G7 talks on rare earths to counter China’s supply dominance

• “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 really just need to move faster,” — U.S. Treasury Secretary Scott Bessent

Reuters

• “The world needs critical minerals, Australia has plenty of them, and that's where we see a big opportunity.” — Australian Treasurer Jim Chalmers

Critical Minerals Focus Of G7+ Ministers Meetings In US

• “It's not solved,” — Anonymous U.S. official on the current state of critical minerals supply chains.

Reuters