Highlights

• G7 announces $6.4B critical minerals alliance to challenge China's monopoly.
• China controls 85% of rare earth oxide refining and 90% of magnet production, maintaining its strategic leverage despite Western funding pledges.
• Capital commitments don't equal capacity: bringing new separation facilities online takes years.
• Even U.S. facilities still ship concentrate to China for processing, exposing the midstream gap in Western supply chains.
• Projects span Canada with partners from Japan, Germany, France, and the U.S., targeting graphite, scandium, and rare earth refining.
• Political theater risks funding exploration without securing industrial-scale processing capacity.

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The G7’s newly minted “critical minerals alliance,” announced in Toronto, sounds ambitious: C$6.4 billion (US$4.57 billion) pledged to fund mines, refineries, and R&D aimed at breaking China’s rare earth monopoly. But despite the headlines, the reality on the ground—and in the supply chain—is far messier. As one Chinese analyst noted bluntly, rare earths will “remain an important card” in Beijing’s diplomacy. That statement, while defensive, is accurate.

A Canadian-driven deal of potential magnitude and scale, USA involvement was nowhere to be found.

Promises Are Easy, Processing Is Hard

The G7’s plan to diversify mineral supply sounds impressive until one recalls that China didn’t gain dominance through announcements—it built it through decades of investment, state-directed subsidies, and brutal price wars that wiped out competitors. Today, China refines over 85% of the world’s rare earth oxides and produces roughly 90% of NdFeB magnets.

Canada’s promised billions may seed projects, but bringing new separation facilities online takes years, not months. Even the U.S., with Mountain Pass running at full tilt, still ships its concentrate to China for final processing. Investors should note: capital commitments don’t equal capacity.

The Card Beijing Keeps Close

An official Canadian Government report (opens in a new tab), and other media, correctly underscore China’s continued leverage. The October 30 Trump–Xi “Busan truce” only suspended one round of controls—it left all meaningful export restrictions untouched. Beijing can still squeeze terbium, dysprosium, and NdFeB magnets at will. That means the G7 alliance launches from a position of dependency, not dominance. The timing isn’t a coincidence; this is China reminding the world who holds the metallurgical keys.

Between Hope and Hype

The G7 alliance could, over time, seed a genuine alternative ecosystem—if the funds are deployed strategically across refining, magnet production, and recycling. But there’s a risk of political theater: the West funding exploration without securing midstream capacity will only shift dependency from ore to oxide. The media spin suggests a “new dawn,” but the numbers show a long dusk before any true independence.

Investor Takeaway

This initiative is directionally sound but insufficiently muscular. China’s grip remains ironclad for the foreseeable future. Until the G7 nations fund processing and magnet-making on an industrial scale, Beijing’s “important card” will keep playing itself.

Projects

Company/Project	Location	Key Partners & Offtakes	Investment/Financing	Strategic Impact
Nouveau Monde Graphite – Matawinie Mine	Montreal, Quebec	Government of Canada; Panasonic (Japan); Traxys (Luxembourg); Government of Japan (investment intent)	> $35 M from Canada Growth Fund; LOI from Canada Infrastructure Bank; up to US$430 M LOI from Export Development Canada; additional contributions from Panasonic Energy and Mitsui & Co.	Creates North America’s largest fully integrated natural graphite facility; strengthens global graphite diversification and Canada’s supply-chain leadership.
Rio Tinto – Scandium Production Plant	Sorel-Tracy, Quebec	Government of Canada (offtake agreement)	~$25 M equity-like royalty investment from Canada Growth Fund	Expands demo plant to commercial scale; significantly boosts allied scandium supply security.
Ucore Rare Metals Inc. – Kingston Facility	Kingston, Ontario	Vacuumshmelze (Germany); Permag (USA); feedstock MOUs with Hastings and ABx (Australia); tech agreement with Metallium (Australia); support from Gov. of Ontario (permitting)	Up to $36.3 M from Gov. of Canada ($26.3 M NRCan + $10 M FedDev Ontario)	Scales RapidSX™ processing for samarium and gadolinium; first-of-its-kind commercial refinery in North America; bridges midstream rare earth gap.
Torngat Metals – Strange Lake Project	Northern Quebec	Carester (France) – offtake and technology collaboration	Not disclosed	Integrates Canadian REE mining with French processing expertise; enhances Western REE cooperation.
Vianode – Synthetic Graphite Facility	St. Thomas, Ontario	GM (USA) – offtake agreement; Germany (export credit guarantee interest)	LOI up to US$500 M from Export Development Canada; LOI from Canada Infrastructure Bank; up to US$300 M export credit guarantee interest from German Gov.	Supports large-scale synthetic graphite production for EV batteries; deepens transatlantic financing links.
Northern Graphite – Lac des Iles Project	Montreal, Quebec	Alkeemia (Italy) – offtake and toll processing LOI; graphite purification pilot in Porto Marghera

Summary:

This REEx analysis dissects the G7’s new critical minerals alliance—ambitious in rhetoric but years from changing the balance of power. The article clarifies what’s real (funding pledges, R&D cooperation) versus what’s speculative (short-term decoupling). For investors, the takeaway is clear: China still controls the midstream, and the West’s challenge has just begun.

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