The 60 Percent Line: How the G7's Rare Earth Gamble Became a Race Against Two Clocks

Introduction

The room at the Évian-les-Bains conference centre, perched above the southern shore of Lake Geneva, had the feel of a place where agreements are reached in the full knowledge that the hardest work lies elsewhere. On the afternoon of June 17, 2026, the leaders of the world's seven largest democracies signed off on a statement that committed their nations to reducing dependence on any single non-G7 supplier of rare earths and permanent magnets to below 60 percent by 2030, with a longer-term ambition to reach 50 percent. The language was careful. The target was not named after China. It did not need to be.

The numbers behind that 60 percent line are almost difficult to absorb. China currently accounts for more than 90 percent of global rare earth refining capacity, according to the International Energy Agency. Its share of permanent magnet production sits at roughly 94 percent. For the heaviest and most strategically sensitive rare earths, dysprosium and terbium, the minerals that give an EV motor its efficiency and an F-35 its guidance system, China's dominance exceeds 98 percent. If the G7 target is taken at face value, it requires the non-Chinese world to scale permanent magnet production by something approaching a factor of seven before the end of the decade.

Angus Barker, chairman of Australian Rare Earths, put the challenge plainly to the Australian Financial Review in the days after Évian. G7 manufacturers would require, he said, 'a lot of non-China projects to get off the ground' to meet the targets. Peter Prendiville, executive director at Norfolk Capital Management, called reducing reliance on a dominant supplier 'a sensible objective,' while cautioning it would be 'challenging given current market conditions.' Both men were being diplomatic. The gap between where the world is and where the G7 has said it wants to be is not a policy gap. It is a physics problem.

The Architecture of a Pledge

The Évian declaration did not arrive without scaffolding. France held the G7 presidency throughout 2026 and made critical minerals supply chain security a defining theme from the start, convening trade ministers in Paris twice before the summit to prepare the ground. The final text that emerged on June 17 committed G7 nations to more than just a percentage target; it outlined a coordinated institutional response that its architects hope can outlast a single presidency.

A new IEA-led coordination platform was established to monitor critical mineral markets, issue early warnings of supply disruptions, and provide analytical support for G7 policy decisions. A pilot stockpiling program for lithium and nickel was agreed, with a commitment to add five new minerals each year and to give particular attention to rare earths. Ministers were tasked with setting specific dependency-reduction targets for other critical minerals before the end of 2026, making Évian less an endpoint than a starting gun.

The investment numbers announced alongside the declaration are substantial by any historical measure. According to the official G7 text, 195 projects announced since the beginning of 2026 have together reached 64 billion euros of investment, encompassing equity participation, offtake agreements, and commitments spanning mining, processing, recycling, and manufacturing capacity. Translated at varying exchange rates across different reporting outlets, the figure sits somewhere between US$69 billion and US$74 billion. The projects span rare earths, lithium, nickel, and graphite, and come from both G7 members and partner countries including Australia, which endorsed the declaration.

France also proposed a permanent secretariat to carry the critical minerals agenda between G7 presidencies, a structural innovation that would represent a meaningful deepening of the alliance's institutional commitment. Whether other members back it will be, as one analyst noted, an early indicator of how seriously the Évian commitments are being treated. Coordination frameworks have a history of dissolving between summits when the host nation's urgency is no longer in the chair.

FORGE and the February Foundation

The Évian declaration did not emerge from nothing. The institutional groundwork had been laid four months earlier in Washington, when Secretary of State Marco Rubio convened the inaugural U.S. Critical Minerals Ministerial at the State Department on February 4, 2026. Representatives from 54 countries and the European Commission attended, including 43 foreign and other ministers. Vice President JD Vance was there, alongside Treasury Secretary Scott Bessent, Interior Secretary Doug Burgum, Energy Secretary Chris Wright, and U.S. Trade Representative Jamieson Greer. The event had the deliberate quality of an administration announcing that it had decided to fight.

The centrepiece of the ministerial was the launch of FORGE, the Forum on Resource Geostrategic Engagement, announced as the successor to the Biden-era Minerals Security Partnership. Rubio described the stakes in terms that left little room for ambiguity: 'The critical minerals marketplace has been plagued by opaque pricing, predatory state-owned enterprises, and coercive supply chain leverage. FORGE will address these challenges with bold, collaborative action.' All 17 members of the earlier MSP reportedly signed on. The Republic of Korea was named as chair through June 2026.

Vance went further. He described FORGE as an opportunity to create 'a preferential trading zone for critical minerals,' one that would establish reference prices reflecting 'real-world fair market value' and enforce them through 'adjustable tariffs to uphold pricing integrity.' The proposal was frank in its ambition: to construct a price floor system for critical minerals that would insulate allied producers from Chinese market undercutting, which Goldman Sachs and others have documented as a deliberate long-term strategy. China built its global dominance partly by operating mines at a loss, suppressing prices until Western competitors could no longer justify staying in the market.

Alongside FORGE, the administration announced Project Vault, a ten-billion-dollar domestic strategic minerals reserve backed by the largest loan in the Export-Import Bank's history, plus approximately two billion dollars in private capital. General Motors, Boeing, and Google signed on as participants, committing to purchase materials at agreed-upon prices and replenish the stockpile after drawing from it. The model was explicitly compared to the Strategic Petroleum Reserve, an analogy that captures both the ambition and the implicit acknowledgment of how exposed the United States currently is. The U.S. government mobilised, by its own count, more than thirty billion dollars in letters of interest, investments, loans, and other support in the six months surrounding the ministerial. The Department of Defense had already invested $400 million in rare earth magnet producer MP Materials in July 2025, providing offtake agreements for ten years at a price floor of $110 per kilogram, roughly $50 above spot.

On the bilateral front, the U.S. signed eleven new critical minerals frameworks or memoranda of understanding on February 4 alone, with Argentina, the Cook Islands, Ecuador, Guinea, Morocco, Paraguay, Peru, the Philippines, the United Arab Emirates, the United Kingdom, and Uzbekistan. Combined with earlier deals, the total reached 21 bilateral critical minerals frameworks in five months. At the Évian sidelines in June, Kenya's President William Ruto announced a near-final agreement requiring Kenya to process its rare earths and strategic minerals domestically rather than exporting raw ore, positioning the country as East Africa's processing hub. The diplomatic tempo was, by any recent standard, extraordinary.

The Fault Line Inside the Alliance

Not everything at Évian went according to the script that Washington had written. The most revealing fracture was not between the G7 and China but within the alliance itself, over the question of price floors and who should design them.

The U.S. arrived at Évian with a specific proposal: a global price floor mechanism for critical minerals, crafted using an AI pricing programme developed by the Pentagon's Defense Advanced Research Projects Agency. The formula was designed to estimate fair market prices by taking production costs into account while excluding what Washington characterises as distortions caused by Chinese state subsidies and market manipulation. USTR Greer had previewed the idea at the OECD ministerial in Paris in early June, telling reporters the U.S. would use price supports 'to protect production of critical minerals and derivative products. We want to phase it in. If other countries want to join us in that, they're welcome to do that.'

Europe was not, at least not on those terms. EU Commission President Ursula von der Leyen acknowledged at a June 15 press conference that China controls access to around 'seventy percent of the world's supply' of critical minerals. But European allies cooled on the idea of a price scheme derived from a Pentagon AI model, according to three sources who spoke to Reuters. Key concerns included who would ultimately bear the cost premium, how far down the supply chain subsidies should extend, and how governance of such a system would work across sovereign jurisdictions. The EU, one analysis noted, led the resistance.

Behind the disagreement lay a structural divide about strategy. Canada and France wanted a trading bloc led by the G7 as a multilateral body; the United States wanted to move fast through bilateral deals and expand later. The final Évian agreement is described by analysts as a coordination framework rather than a binding arrangement. The DARPA pricing model was not adopted. A road map is to be delivered by the end of 2026. Rich Nolan, CEO of the National Mining Association, offered a telling hedge in his own submission to USTR Greer: 'While market interventions such as pricing mechanisms may play a role in certain circumstances, incentive-based approaches are better suited to addressing challenges facing the domestic mining industry.' Even the domestic industry was hedging.

Ashley Zumwalt-Forbes, a minerals investor who previously ran the Department of Energy's batteries and critical minerals portfolio, offered perhaps the most candid assessment of the whole exercise when asked about the price floor debate: 'It is a very hard thing to do, and I'm happy I'm not the one doing it.' The DYAMI Services analysis published in June reached a similar, if less personal, conclusion: the G7 'only partially succeeded' in showing a common front, and it is 'highly likely that the U.S. course of fast bilateral resource deals, backed by domestic stockpiling and price intervention, becomes the de facto Western response, while European efforts toward a multilateral trading bloc stall for want of U.S. participation.'

Beijing's Counter-Move

China's foreign ministry did not wait long to respond. The morning after the G7 declaration, on June 18, spokesman Lin Jian took the podium at a regular ministry briefing and delivered a rebuttal that was polished precisely because it had been anticipated. China's export controls, Lin said, were 'in line with international practices,' aimed at safeguarding 'world peace and regional stability' and fulfilling 'international obligations related to non-proliferation.' He urged G7 leaders to stop 'imposing rules of small cliques' that undermine the international economic and trade order. The language was familiar, calibrated, and designed to land in the Global South as well as in Brussels and Washington.

The more consequential move came five days later, on June 23, when Foreign Minister Wang Yi arrived at a BRICS National Security Advisors meeting in New Delhi and made the strategic geometry explicit. BRICS nations, Wang said, should 'hold high the banner of multilateralism' and 'firmly oppose unilateralism and protectionism.' He called on members to 'strengthen cooperation on strategic mineral resources' and to 'take the lead in speaking up for justice and delivering fair outcomes.' The timing was not coincidental. Within a week of the G7 announcing its diversification architecture, China was rallying the alternative institutional bloc around the same commodity category.

The pattern is important for understanding what kind of contest this actually is. As I examined in my July 2026 analysis of the G7's rare earth reckoning, China controls over 90 percent of global rare earth refining. But its strategic posture is not simply defensive. Beijing is simultaneously using export controls as leverage, building aligned supply relationships through the BRICS framework, and managing the pace of disruption carefully enough to prevent large-scale Western alternative investment from becoming economically viable. One analysis from the Andersen Institute captured the logic precisely: China is 'weaponizing control, not scarcity.' Temporary, reversible restrictions maintain pricing power and extract strategic concessions without triggering the kind of sustained Western panic that would make alternative projects bankable.

The timeline of China's export controls illustrates the pattern with clinical precision. In April 2025, Beijing introduced controls on samarium, terbium, dysprosium, and certain permanent magnet materials. Export volumes fell sharply in April and May, forcing automakers in the U.S. and Europe to cut production or reduce utilisation rates. By July 2025, Beijing eased some restrictions after U.S. pushback, then introduced a second wave in October. On November 7, it suspended those October measures until November 10, 2026. On January 1, 2026, it added new controls on rare earth compounds through its updated Export Licensing Catalogue. On June 22, just after Évian, it issued Announcement No. 23 of 2026, a fresh addition to the control list. The November 10 reinstatement date now looms as the most immediate pressure point on the G7's entire post-Évian architecture, a date that arrives before a single new non-Chinese refinery has come online at scale.

The economic consequences of the 2025 wave were severe enough to constitute a demonstration of leverage. Prices of affected rare earth elements spiked by up to sixfold outside China. Licensing approval rates for European firms fell below 25 percent in some sectors. Chinese yttrium exports to the United States fell from 333 tons in the eight months before restrictions to just 17 tons in the eight months following April 2025. European imports eventually rebounded; U.S. imports never returned to pre-restriction levels. The IEA has estimated that China's export controls could put up to $6.5 trillion of economic activity outside China at risk annually. Goldman Sachs calculated that even a 10 percent disruption in rare earth supply could produce economic output losses of $150 billion.

The Gap That Numbers Cannot Close

The hard arithmetic of the 60 percent target deserves to be stated plainly, because it is the variable against which every other part of this story must ultimately be measured. If alternative suppliers currently account for roughly 6 percent of global permanent magnet production, then meeting the 60 percent target requires a roughly 6.7-fold scale-up in non-Chinese magnet capacity within four years. The IEA, which has modelled the full pipeline of globally developing projects, projects that even under those scenarios China's share of rare earth refining falls only from 91 percent today to 77 percent by 2035. That is a decade from now, five years after the G7's declared deadline. The gap is not a rounding error.

Neha Mukherjee, research manager at Benchmark Mineral Intelligence, told Reuters that the pace of diversification 'will depend on whether policy support translates into investment across the midstream and downstream parts of the supply chain.' That sentence contains the whole problem. Mining operations typically take five to ten years from discovery to production. Refining and processing for specialty materials take additional years. The midstream and downstream are where China's advantage is most deeply embedded and where Western capital is least comfortable. Japan spent fifteen years diversifying after the 2010 crisis and still relies on China for roughly 80 percent of its rare earth imports. Japan is also, as DYAMI Services noted in June, 'the only credible non-Chinese node' in rare earth magnet manufacturing, the single G7 member with a downstream base capable of supporting the alliance's ambitions.

There are genuine advances to point to. In May 2025, Lynas Rare Earths became the first company outside China to produce commercial quantities of dysprosium oxide at its Malaysia facility, using feedstock from Australia's Mount Weld mine. Australia attracted $64 million in rare earth exploration investment in 2024, roughly 45 percent of global spending in the sector, and hosts 89 active projects compared to 18 in Canada and 12 in the United States. The Australian government has backed a $1.25 billion loan to Iluka Resources to build a domestic refinery tied to allied offtake. David Merriman, research director at Project Blue, told S&P Global that 'the ex-China market will continue to face bottlenecks in the supply of HREE products over 2026 and 2027 as alternative suppliers are constructed and commissioned.' The bottleneck is structural, not incidental.

Dr. Sarah Chen, a critical minerals analyst at CSIS, has described the situation as a 'strategic trilemma': the G7 can accept managed dependence on China, pursue costly independence at $30 to $50 billion over five to seven years, or adopt a hybrid resilience model combining stockpiling, diversification, and innovation. The Évian framework is, in effect, an attempt to pursue all three simultaneously while avoiding a decisive commitment to any one of them. EBC Financial Group's analysts noted that even a single supplier holding 59 percent of permanent magnet output 'would still shape pricing, qualification timelines, and industrial availability.' The 60 percent target, they concluded, 'is best read as a first resilience line, not the end state of diversification.' That framing is honest, but it also means the G7 has committed to a threshold that, if met, would still leave it structurally exposed.

The Clock That Was Already Running

On the last morning of the Évian summit, German Chancellor Friedrich Merz told reporters that the G7 had agreed 'in various formats to work even more closely together on critical raw materials' and that leaders had held 'very in-depth discussions with our guests about how we can diversify.' The phrasing was the language of process, of beginning, which is perhaps the honest register for a commitment that will take years to test.

The more revealing scene came six days later, in New Delhi, where Wang Yi was not announcing a beginning. He was consolidating an existing architecture. China's BRICS coordination on strategic minerals builds on a foundation of infrastructure deals, state-backed loans, and long-term offtake agreements assembled across the Global South over the better part of two decades. Western capital was often reluctant to venture into the fragile states where much of that foundation was laid. As I documented in my earlier reporting on the new gatekeepers of the mineral economy, resource nationalism is no longer a Chinese monopoly; but China's version was never simply nationalism. It was patient institutional construction.

The November 10 date sits on the calendar like a marker. That is when China's suspended October 2025 export controls are scheduled for reinstatement, and the question of whether Beijing will exercise them, suspend them again as a concession, or deploy them selectively against specific allies will do more to determine the real-world trajectory of the G7's Évian commitments than any road map delivered before the end of 2026. Switching costs for critical mineral suppliers run into billions of dollars per firm, and decoupling simulations project first-year operating profit losses of 15 to 50 percent. The €64 billion announced at Évian is real money. It is also, measured against the scale of the transformation required, a first instalment on a bill whose total has not yet been presented.

Chris Berry, an independent battery metals analyst, offered a summary that has the quality of the obvious stated at the right moment: 'As long as China continues its saber-rattling regarding dual use and export restrictions, this will serve to impede trade flows and elevate prices.' The G7 has, at Évian, placed a bet that it can build fast enough to make those elevated prices irrelevant before they become unbearable. The answer will not arrive at a summit. It will arrive in quarterly production reports from processing facilities that do not yet exist, in licensing decisions made by governments that have not yet committed, and in the quiet arithmetic of refineries that will need to be running before November of a year that has not yet been named.