Katherina Reiche, German Minister of Economy and Energy.
TORONTO:
G7 energy ministers, meeting in Canada on Thursday, planned to launch a new alliance to counter China’s critical mining dominance, aiming to gain more reliable access to resources that power cutting-edge technologies.
The two-day Group of Seven meeting in Toronto opened hours after U.S. President Donald Trump and his Chinese counterpart Xi Jinping signed a one-year extendable deal on rare earth supplies to China.
German Economy and Energy Minister Katherina Reiche told reporters that the Trump-Xi deal was “a good sign,” highlighting Germany’s dependence on Chinese exports of key minerals.
But she stressed that the deal “cannot stop us” from expanding supply chains for materials used in everything from solar panels and cellphones to precision missiles.
“We need to diversify our raw material import routes,” Reiche said.
Facing growing concern over China’s overwhelming dominance in rare earth refining and processing, G7 leaders announced a “Critical Minerals Action Plan” at a summit in western Canada in June.
Canadian Energy Minister Tim Hodgson said the Toronto meeting would aim to formally launch a new initiative designed to limit China’s influence in the market.
The Critical Minerals Production Alliance “will ensure transparent, democratic and sustainable critical minerals supply chains across the G7,” he said.
Under the alliance, the governments of Britain, Canada, France, Germany, Italy, Japan and the United States would mobilize private investment to increase critical mineral production that bypasses China.
The head of the critical minerals division at the International Energy Agency, Tae-Yoon Kim, told AFP that the Toronto meeting offered “a major opportunity… to begin to shift market power.” “The high concentration of critical minerals refined in a single country creates economic and national security risks,” Kim said in an email ahead of the G7 negotiations. One of the main complaints about China’s behavior is that it does not respect market principles.
Since a high proportion of materials pass through Chinese-controlled companies, Beijing can build up stockpiles and control global supply. “For decades, we have faced a competitor that has consistently distorted free markets, used industrial subsidies, created overcapacity and undermined fair trade,” said Abigail Hunter, executive director of the Washington-based Center for Critical Minerals Strategy.
