G7 Drafts Rare Earth Action Plan to Counter China’s Magnet Grip

Highlights

• G7 drafting a plan to reduce dependence on China’s rare earth magnet processing capacity, which currently dominates over 90% of global production.
• China’s recent export restrictions on seven key rare earth materials pose a threat to economic and national security in the clean energy, defense, and automotive sectors.
• The strategic initiative requires significant investment, permitting reforms, and diplomatic coordination to create resilient global mineral supply chains.

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The Group of Seven (G7) economies are preparing a coordinated “action plan” to diversify global sourcing of critical minerals—specifically rare earth elements—as China’s export restrictions on rare earth magnets raise alarm. A draft communiqué, seen by Bloomberg and Reuters, outlines the G7’s intent to reduce dependence on China, which currently accounts for more than 90% of rare earth magnet processing capacity.

The draft does not explicitly name China, but refers to “non-market policies” in the critical minerals sector as a threat to economic and national security. China’s latest move, effective April 4, imposes export license requirements on seven key rare earths and related magnets—materials vital to clean energy, defense, and automotive industries.

The G7 plan calls for “immediate and scaled investment” in responsible mining and processing, with a focus on overcoming permitting delays and price manipulation.

The U.S. and China recently struck a separate deal allowing continued U.S. access to Chinese rare earth magnets, but the G7 remains intent on long-term diversification.

India, an invited participant, is also impacted—China’s restrictions have disrupted India’s auto supply chain, and negotiations continue. Meanwhile, Japan’s success in securing non-Chinese supply via Lynas is cited as a model.

Bottom line: The G7 is waking up to the strategic vulnerability of its dependence on rare earths. But transforming pledges into supply chain resilience will require capital, permitting reform, and sustained diplomatic coordination. The challenge is real and urgent.