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# The G7 Just Pledged to Break China’s Rare Earth Grip — There’s a Lot of Work to Do

For decades, the world’s advanced economies have enjoyed the benefits of globalization while quietly allowing a critical vulnerability to emerge: dependence on China for rare earth minerals and permanent magnets.

Now, the Group of Seven (G7) nations are finally attempting to confront that reality. At their recent summit in Evian, France, G7 leaders agreed on an ambitious goal: by 2030, no single country should account for more than 60% of their imports of rare earth elements and permanent magnets. Beyond that, they hope to reduce reliance further, targeting a 50% threshold as soon as possible.

The message is clear. The world’s leading democracies have concluded that China’s dominance over critical minerals has become both an economic and national security risk.

The challenge? Breaking that dependence may take far longer than the politicians would like.

## Why Rare Earths Matter

Rare earths are a group of 17 metallic elements that play an essential role in modern technology. On their own, these materials may seem obscure. But when processed into permanent magnets—particularly neodymium-iron-boron (NdFeB) magnets—they become indispensable.

Their unique properties allow manufacturers to build lighter, stronger, and more energy-efficient motors and electronic systems. In other words, rare earth magnets have become one of the foundational technologies of the 21st century.

## China’s Dominance Is Overwhelming

This dominance wasn’t built overnight. For years, China invested heavily in mining, refining, processing expertise, and manufacturing infrastructure while many Western nations outsourced these activities due to environmental concerns, lower costs, and regulatory hurdles. The result is a supply chain where much of the world depends on China not merely for raw materials but for the highly specialized processing required to make those materials usable.That processing stage has become the true strategic bottleneck.

## Why the G7 Is Acting Now

The urgency stems from recent geopolitical tensions.

Over the past several years, Beijing has increasingly used export controls on critical minerals as a policy tool. Since 2020, China has imposed multiple restrictions on key materials used in defense and clean energy technologies.

Last year, China introduced sweeping export controls on rare earths and other critical minerals, raising fears that manufacturing lines across North America, Europe, and Asia could face severe disruptions.

The issue became even more visible during escalating trade disputes with the United States and amid growing tensions surrounding Taiwan.

Officials across the G7 have come to a sobering realization:

If China chose to significantly restrict exports, major sectors of the global economy could be affected almost immediately. The International Energy Agency has warned that trillions of dollars of economic activity outside China could be exposed to supply disruptions if export controls were fully implemented.

For military planners, the concern is even more immediate. Rare earth magnets are embedded in everything from fighter aircraft and missile guidance systems to surveillance drones. Dependence on a geopolitical rival for these materials creates a strategic vulnerability few governments are comfortable accepting.

## Lessons From Japan

The G7 is not the first group to recognize this problem. Japan learned the lesson more than a decade ago. In 2010, following a maritime dispute with China, Japanese companies suddenly found themselves facing restrictions on rare earth exports. Tokyo responded with a long-term strategy to diversify suppliers, invest in overseas mining projects, and build stockpiles. Yet even after more than 15 years of effort, Japan still sources roughly 75% of its rare earth imports from China.

That reality offers a sobering perspective on the G7’s latest pledge.

Diversification is possible. Rapid diversification is much harder.

## Building a Western Supply Chain

Despite the challenges, efforts are underway to create alternative supply chains. In the United States, several companies are positioning themselves as key players in what policymakers increasingly call a “mine-to-magnet” strategy.

### MP Materials

### USA Rare Earth

Another emerging player is USA Rare Earth. The company is developing mining, processing, and magnet manufacturing operations designed to produce rare earth permanent magnets domestically. Backed by federal incentives through the CHIPS and Science Act, the company aims to establish large-scale production capabilities and become a cornerstone of a Western rare earth ecosystem. These efforts represent important progress. But they are only the beginning.

## The Hard Part: Heavy Rare Earths

One major complication is that not all rare earths are equal. Many Western projects focus primarily on so-called “light” rare earth elements.

China, however, remains especially dominant in the production and processing of “heavy” rare earths—materials that are crucial for many advanced defense and high-performance industrial applications. Without secure access to these heavier elements, building a truly independent magnet supply chain remains difficult. Industry experts caution that current Western investments, while encouraging, do not yet solve this deeper problem.

## Obstacles Ahead

The G7’s target may be politically appealing, but achieving it will require overcoming significant obstacles.

China’s advantage isn’t just geological.

It also possesses decades of accumulated processing knowledge, engineering expertise, and industrial capacity that cannot be replicated overnight.

Defense manufacturing may become a particular focus, with governments potentially requiring portions of critical materials to come from non-Chinese sources. Such policies could help create the guaranteed demand necessary for new projects to attract financing.

## The Bottom Line

The G7’s commitment marks one of the strongest collective efforts yet to reduce dependence on China for critical minerals. The goal is ambitious, and perhaps necessarily so. Without clear targets, governments and industries often fail to act. But ambition alone will not be enough.

China’s dominance in rare earths was built over decades through sustained investment, industrial policy, and strategic planning. Reversing that dominance will require the same level of long-term commitment from the United States, Europe, Japan, and their allies.

The good news is that the process has begun. The difficult reality is that diversification is not a five-year project—it may be a generation-long effort.

The G7 has taken an important first step.

Now comes the hard part: turning a political pledge into a functioning supply chain.