Sixty Percent and Counting: The G7's Rare Earth Reckoning and the Clock Running Out in November

Introduction

On a Tuesday morning in late June, at the Grand Hôtel du Parc in Évian-les-Bains, the lakeside French resort town where mineral water flows from the Alpine foothills into glass bottles bound for the world's finest hotels, the leaders of the seven largest democratic economies signed their names to a document that attempted something far more consequential than branding. They pledged, in the careful language of multilateral diplomacy, to reduce their collective dependence on any single supplier outside the G7 for rare earths and permanent magnets to below 60 percent by 2030. The word "China" does not appear in the relevant passage. It does not need to.

The irony of the location was not entirely lost on those present. Évian, a town built on the commercial value of a single, irreplaceable geological resource, hosted a summit whose central anxiety was precisely the danger of depending too completely on what the earth produces in only certain places. The leaders drank the water, signed the declaration, and flew home to supply chains that, in the sectors that matter most, remain close to 90 percent reliant on Chinese processing infrastructure.

What emerged from the summit was more than a press release. It was, in the careful assessment of those who track these negotiations, the most numerically specific collective commitment the G7 has ever made on mineral supply chain security: below 60 percent by 2030, with an ambition to reach 50 percent "as soon as possible." Set alongside 195 announced projects and €64 billion in investment commitments since the start of 2026, the declaration has the texture of a genuine industrial mobilisation. Whether it has the substance of one is a harder question, and the answer may come not from a mine opening or a refinery commissioning, but from a diplomatic calendar entry: November 10, 2026.

The Architecture of Dependence

To understand what the G7 is actually up against, it helps to trace how the numbers assembled. Global rare earth mine production reached an estimated 390,000 tonnes of rare-earth-oxide equivalent in 2025. China accounted for 270,000 of those tonnes, a share of roughly 69 percent. The United States, which has made more noise about supply chain independence than perhaps any other G7 member, contributed 13 percent. Australia, which joined the Évian declaration as a partner country, added 7.4 percent.

But mining is the easy part of this story. The more alarming data lives downstream. The IEA's Global Critical Minerals Outlook estimated that China accounts for roughly 60 percent of global mined rare earth production while controlling more than 90 percent of global refined rare earth output and over 94 percent of permanent magnet manufacturing. For magnet production specifically, China's share was around 50 percent in 2005 and had expanded to 94 percent by 2024. The trajectory was not accidental. It was the product of three decades of deliberate industrial policy, subsidised refinery development, and a tolerance for environmental and social costs that Western nations were unwilling to absorb domestically.

The consequence is a supply chain architecture that looks, from the outside, like a funnel. Raw material enters from mines in China, Australia, the United States, and a handful of other countries; it narrows through Chinese separation plants; it narrows again through Chinese metallization and alloying facilities; and it emerges at the far end as a sintered permanent magnet that ends up inside an electric vehicle drivetrain, a wind turbine generator, a smartphone, a drone, or the guidance system of a precision munition. The G7 declaration is an attempt to redesign that funnel. The 60 percent target is a measurement of how much of it they intend to reroute.

Japan's experience offers the most instructive cautionary precedent. Tokyo has been attempting to reduce Chinese rare earth dependence since 2010, when Beijing imposed an informal export ban following a maritime border dispute that sparked a lasting policy effort. Fifteen years later, Japan still sources approximately 75 to 80 percent of its rare earth imports from China, depending on the element in question. Meredith Schwartz, an associate fellow for the Critical Minerals Security Program at the Center for Strategic and International Studies, put the lesson plainly: "It's taken over 15 years for Japan to make a significant dent in its dependence on Chinese rare earth materials." The G7 is giving itself four.

What Sixty Percent Actually Requires

The declaration's language is precise enough to be useful and vague enough to leave room for argument. The commitment covers rare earths and permanent magnets explicitly. Ministers were asked to set specific dependency targets for other critical minerals before the end of the year, beginning with lithium and nickel as pilot minerals. The mechanisms will gradually expand to cover five new minerals annually, with particular focus on rare earth elements. But the rare earth and permanent magnet target is the one that carries the most structural weight, because it is the one where the distance between current reality and the stated ambition is greatest.

Reducing below 60 percent is not simply a mining challenge. It requires new separation plants, metallization facilities, alloy production lines, finished magnet manufacturing capacity, chemical infrastructure, skilled labour, long-term financing, reformed permitting, and sustained customer commitments from automotive and defence buyers who have previously defaulted to cheaper Chinese supply. Cumulative planned production of metals, alloys and finished magnets from projects announced as of early 2026 amounts to around 18,000 tonnes on a rare earth element content basis, which represents roughly one third of the diversified mining capacity being targeted. The midstream remains the chokepoint.

Angus Barker, chairman of Australian Rare Earths, noted in comments to the Australian Financial Review that G7 manufacturers would require "a lot of non-China projects to get off the ground" to meet the targets, adding that manufacturers and defence-sector customers could increasingly seek supply agreements with developers capable of entering production before 2030. That is an important qualifier. Supply agreements require buyers who are willing to commit to above-market prices for non-Chinese supply, and that requires either regulatory mandates or strategic patience of a kind that quarterly earnings cycles tend to discourage.

Neha Mukherjee, research manager at Benchmark Mineral Intelligence, told Reuters that the pace of supply chain diversification will depend on whether policy support translates into investment across the midstream and downstream parts of the supply chain. The IEA estimated that $60 billion in public and private investment is required over the next decade to meet projected demand for rare earths from outside China across mining, refining, and downstream manufacturing. The Évian declaration's €64 billion in announced project investment, which converts to roughly $74 billion, looks adequate in aggregate but is spread across 195 projects of wildly varying readiness, most of which are at the upstream end where Chinese price suppression can most easily make them uneconomic.

Cirba Solutions CEO David Klanecky, with more than 30 years of experience in critical minerals, offered perhaps the most pragmatic framing of the target's purpose: "If you don't set a goal on a target for people to achieve, then nothing will happen." That is not a ringing endorsement of the 60 percent figure as a considered engineering estimate. It is an argument for the target as a forcing function, which may ultimately be a more honest description of what it is.

Beijing Responds, and Builds Its Own Architecture

China's foreign ministry did not take long to respond. Within 24 hours of the Évian declaration, spokesperson Lin Jian appeared at a regular press briefing and delivered a message that was both predictable and revealing. Beijing, he said, urged G7 leaders to "respect market economy principles and international trading rules rather than favoring small cliques." The Chinese Embassy in Washington added that Beijing's export control adjustments were consistent with international norms and intended to safeguard "world peace and regional stability." The language was familiar. The timing was not accidental.

What was more strategically significant than the foreign ministry's defensive posture was the simultaneous offensive move. On June 23, just days after the G7 declaration, Foreign Minister Wang Yi addressed the 16th Meeting of BRICS National Security Advisors in New Delhi. He called on BRICS countries to "strengthen cooperation on strategic mineral resources" and to "hold high the banner of multilateralism" against what he characterised as unilateralism and protectionism. Wang stressed that "the vitality of BRICS lies in equality and mutual benefit and the strength of BRICS lies in unity and mutual assistance." China will assume the rotating BRICS chairmanship next year.

The resulting picture is not one of retreat from global markets but of parallel bloc-building around the same materials. As my reporting on the G7's new minerals architecture noted in July, when covering the Évian summit's broader institutional outcomes, the contest is no longer simply about who mines what; it is about which coordination framework sets the terms of trade. Beijing's counter-move is to organise the producing world around a BRICS minerals compact at precisely the moment the G7 is attempting to organise the consuming world around a resilience alliance. BRICS includes Brazil, Russia, South Africa, and a growing roster of resource-rich associate members. China does not need to outmine the G7. It needs to ensure that enough of the world's ore, concentrate, and processing capacity flows through frameworks it controls or influences.

Also on June 24, Chinese authorities detained two Japanese nationals over alleged rare earth smuggling, a reminder that Beijing retains coercive tools beyond the formal export licensing regime. The detention came against the backdrop of a months-long pressure campaign against Japan following comments on Taiwan by Prime Minister Sanae Takaichi, during which China had already tightened export controls on dual-use goods destined for Japanese industry. The signal was unmistakable: the export control system is not merely an administrative mechanism. It is an instrument of geopolitical leverage, deployable with specificity against specific countries for specific purposes.

The November Countdown

All of this would be consequential enough as a medium-term policy contest. But there is a date that concentrates the mind considerably: November 10, 2026. On that day, a 12-month suspension of China's October 2025 expanded rare earth export controls expires automatically unless Washington and Beijing negotiate a renewal.

The controls in question, announced on October 9, 2025, were not merely a restriction on Chinese rare earth exports. They were an extraterritorial assertion of jurisdiction: any product worldwide containing Chinese-origin rare earth materials at a threshold of just 0.1 percent would require an export license from China's Ministry of Commerce. The October package also expanded the list of controlled elements to include holmium, erbium, thulium, europium, and ytterbium, in addition to the seven elements already restricted under the April 2025 first wave. The inclusion of holmium was particularly significant because many magnet manufacturers had already begun redesigning their products to replace the initially restricted elements with holmium.

The suspension of the October controls was agreed at the Trump-Xi meeting in Busan in November 2025 as part of a broader trade truce. It applied, subsequent EU-China discussions confirmed, to both the United States and the European Union. But the April controls remained in force throughout, and their effects have been severe. CSIS research published in May 2026 showed that yttrium exports to the United States fell from over 333 metric tons in the eight months before the April restrictions to just 17 metric tons over the eight months after, with aerospace manufacturers reporting shortages and rationing of the material critical for turbine blade coatings. BMI data show that exports of yttrium, dysprosium, and terbium are running at just 42, 41, and 49 percent respectively of pre-restriction volumes. Yttrium's price has risen roughly 15-fold since the controls took effect.

If the November suspension is not extended, those October 2025 controls snap back into effect immediately. The IEA, in an April 2026 report, estimated that full reimposition could impose an annual economic impact of $6.5 trillion on countries outside China. The automotive sector alone faces potential direct losses of over $3 trillion. The United States and Europe face estimated direct economic losses of more than $1.5 trillion each.

A June survey by the U.S.-China Business Council found that some critical minerals had already become "nearly unobtainable" from China despite the two sides' earlier commitments to ease restrictions. The May 2026 Trump-Xi Beijing summit produced a White House post-summit fact sheet acknowledging that China would "address" U.S. concerns regarding rare earth shortages, specifically citing yttrium, scandium, neodymium, and indium. China's official MOFCOM statement did not mention rare earths. Cory Combs, Head of Critical Minerals and Supply Chain Research at Trivium China, offered a telling observation about the licensing regime that persists even during the suspension period: "We do not see licensing requirements themselves as negotiable. They are the means for Beijing to tighten or loosen control over particular countries', companies', or industries' supplies, not the actual damage to be done."

As I reported in July on the broader set of converging deadlines facing American mineral policy, this November cliff edge does not arrive in isolation. U.S. defense procurement rules banning Chinese-origin rare earth magnets from the defence supply chain begin taking effect in January 2027, under the Defense Federal Acquisition Regulation Supplement deadline that requires contractors sourcing components for platforms like the F-35 to use domestically produced magnets. The two timelines are on a collision course: the moment when Chinese export controls might snap back is almost exactly the moment when American defence contractors need to demonstrate they have alternative supply secured.

The Investment Mobilisation and Its Gaps

Against this pressure, the G7 and its partners have assembled a response that is, on paper, substantial. The United States has committed $400 million through a Pentagon stake in MP Materials, a $1.6 billion funding commitment for USA Rare Earth, and a $500 million commitment to Phoenix Tailings for a midstream rare earth processing facility described as the "Freedom Facility," designed to separate and refine rare earth metals for use across U.S. industry and defence supply chains. The administration also launched a $12 billion critical minerals reserve titled Project Vault. MP Materials is building a second Texas-based magnet facility that, combined with its Fort Worth operation, aims to produce 10,000 metric tons of rare earth magnets.

Australia, which signed onto the Évian declaration as a partner country, is positioning its mining and refining sector as a central pillar of the allied diversification effort. Lynas Rare Earths remains one of the world's largest rare earth producers outside China. Export Finance Australia announced an additional A$475 million in financing for the Eneabba Rare Earths Refinery project, which will be Australia's first facility to produce separated rare earth oxides, on top of a 2022 government loan totalling A$1.25 billion. In May 2026, Canberra ordered Chinese investors to divest their stakes in Northern Minerals, requiring six shareholders to sell within two weeks. The signal was pointed: allied governments are now actively limiting Chinese influence over upstream assets within their own borders.

Canada's government announced 13 new partnerships with more than eight countries expected to unlock over $5 billion in capital investment across Canada's critical minerals value chain. In the European Union, the Critical Raw Materials Act identified five projects in France, Italy, Poland, and Sweden focused on rare earth extraction, processing, manufacturing, and recycling. European Commission President Ursula von der Leyen announced the RESourceEU initiative for joint purchasing and stockpiling of rare earth elements. Energy Fuels, a North American producer, agreed to acquire Vacuumschmelze, the German magnet manufacturer, in a transaction valued at approximately $1.9 billion, a deal that would represent one of the most significant downstream integration moves by a non-Chinese company in the sector's history.

And yet the structural problem that Gracelin Baskaran, director of the Critical Minerals Security Program at CSIS, articulated does not yield to announcements alone: "The U.S. still has to tread carefully in its relationship with China to avoid those disruptions, given how long it takes to transform rare-earth announcements, funding, and partnerships into actual supply." Even where G7 governments succeed in securing upstream mining access through bilateral investment treaties or the Minerals Security Partnership, the absence of sufficient Western refining capacity means that ore and concentrate frequently still passes through Chinese processing infrastructure before reaching manufacturers in Detroit, Stuttgart, or Nagoya. The funnel has not yet been redesigned. It has been partially rerouted at the top, while the narrow midstream remains largely unchanged.

China's strategic response to Western investment has been, historically, to suppress prices sufficiently to make new non-Chinese projects uneconomic at the moment of their greatest vulnerability: the transition from construction to production. Analysts tracking the sector note that China "weaponizes control, not scarcity," using temporary and reversible restrictions to maintain pricing power and extract strategic concessions while simultaneously preventing large-scale Western alternative investment from reaching commercial scale. The G7's coordination framework, the IEA monitoring platform, and the proposed permanent secretariat that France has advocated for are, in part, attempts to build collective purchasing power and demand guarantees sufficient to make non-Chinese projects investable even during periods of Chinese price suppression.

The View From the Lakeside, Four Years Out

German Chancellor Friedrich Merz, speaking to reporters at Évian, chose his words with the deliberate carefulness of a politician describing an aspiration he believes in but cannot fully guarantee: "We agreed in various formats to work even more closely together on critical raw materials. We had very in-depth discussions with our guests about how we can diversify." The phrasing captured something honest about the moment. The G7 has agreed on a direction. The path from here to below 60 percent is not yet fully mapped, and the obstacles are not merely geological or financial.

The declaration itself acknowledged "the high degree of market concentration, the need to reduce vulnerabilities regarding those resources and the growing use of arbitrary trade restrictions." The leaders committed to deter economic coercion and to act "in a coordinated manner" against it. They did not agree on floor prices for critical minerals, a Pentagon-drafted proposal that Trump pushed but European members declined to support. The final framework is a coordination mechanism, not a binding treaty. Cullen Hendrix, a senior fellow at the Peterson Institute for International Economics, observed that internal G7 coherence is itself a variable: "The other members of the G7 are doing as well, and I think that's a reflection of the fact that the G7 isn't what it once was, insofar as you have unprecedented levels of policy disputes and trade disputes among the various members."

What holds the declaration together is not institutional architecture but a shared vulnerability that has become too costly to ignore. Rare earth magnets are embedded in every significant technology the G7 values: electric vehicles, wind turbines, smartphones, industrial motors, data centres, and the drones and precision weapons that define modern military capability. A shortage, as the CSIS's Meredith Schwartz put it plainly, can "quickly move from a factory problem to a national security problem." China has now demonstrated twice, in April and October of 2025, that it is willing to convert that dependency into leverage. The suspended October controls are not a concession. They are a loaded instrument, held in reserve.

In Évian, the mineral water still flows. Somewhere upstream, in the Préalpes, snow melts through limestone and emerges filtered and cold twenty years later, a process so slow and geological that it defies any quarterly planning horizon. The G7's rare earth ambition runs on a tighter schedule: four years to 60 percent, a November deadline that could reshape the entire effort, and a Chinese foreign minister in New Delhi telling the BRICS world to organise around the same materials the G7 is trying to secure. The question is not whether the target is bold enough. It is whether the machinery assembling around it can move faster than the forces working to ensure it fails.