Sun Jan 11 14:17:55 UTC 2026: # U.S. Urges G7 and Allies to Reduce Reliance on Chinese Critical Minerals

The Story:
U.S. Treasury Secretary Scott Bessent is set to host a meeting of finance officials from the G7 nations, the European Union, Australia, India, South Korea, and Mexico on January 12, 2026, to address the urgent need to reduce dependence on critical minerals sourced from China. This initiative follows concerns raised by Bessent at a G7 leaders summit in Canada last June, where he highlighted the risks associated with the current reliance on China for rare earths and other essential minerals. The U.S. seeks to galvanize action amongst its allies, citing China’s dominant position in the refining of these materials and its potential to impose export controls.

Key Points:

  • U.S. Treasury Secretary Scott Bessent is pushing for increased urgency in reducing reliance on critical minerals from China.
  • A meeting of top finance officials from G7 nations, the EU, Australia, India, South Korea, and Mexico is scheduled for January 12, 2026.
  • The included nations represent 60% of global demand for critical minerals.
  • China dominates the refining of critical minerals like copper, lithium, cobalt, graphite, and rare earths, controlling 47% to 87% of the process.
  • The U.S. has signed an agreement with Australia to counter China’s dominance, including an $8.5 billion project pipeline.
  • China has reportedly begun restricting exports of rare earths and magnets to Japanese companies and banning dual-use items to the Japanese military.

Critical Analysis:

The U.S.’s push for diversification of critical mineral sources is a direct response to China’s increasing economic and geopolitical influence, particularly its control over the refining of materials vital for defense, technology, and renewable energy sectors. The restrictions imposed on Japan highlight the potential for China to weaponize its control over these resources, underscoring the urgency of the situation.

Key Takeaways:

  • The U.S. is actively seeking to de-risk its supply chains and those of its allies from dependence on Chinese critical mineral sources.
  • The initiative reflects a broader strategy of containing China’s economic power and countering its potential to leverage its dominance for strategic advantage.
  • The involvement of countries like Australia, India, and South Korea indicates a concerted effort to build alternative supply chains.
  • The U.S. is prepared to move forward with partners who share its level of urgency, signaling a potential for differentiated levels of cooperation.
  • China’s recent actions against Japan serve as a stark warning of the potential consequences of relying on a single dominant supplier.

Impact Analysis:

This initiative, if successful, could lead to:

  • Diversified supply chains: Reduced reliance on China for critical minerals, enhancing global supply chain resilience.
  • Increased investment: Stimulation of mining and processing industries in countries like Australia, Ukraine, and potentially others.
  • Geopolitical realignment: Altered global power dynamics as countries reduce their economic dependence on China.
  • Technological innovation: Incentives for research and development into alternative materials and processing techniques.
  • Potential trade conflicts: Heightened tensions between the U.S. and China as they compete for influence in the critical minerals sector.

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