China refines 70% of the world's critical minerals, including 99% of all primary gallium - a metal that goes into nearly every advanced semiconductor. The G7 thinks it can cut China's share to 60% by 2030, giving itself five years to undo decades of Chinese control.
Rare earths and critical minerals power everything from F-35 fighter jets to EV batteries to iPhones, and almost all of them currently pass through Chinese refineries.
G7 leaders agreed Wednesday that no single country should supply more than 60% of their rare earth and permanent magnet imports by 2030, with a longer-term goal of pushing that number to 50%.
Permanent magnets - which the group specifically called out - are essential for EV motors, wind turbines, and missile guidance systems, and China currently makes the vast majority of the world's supply.
For other critical minerals like lithium, cobalt, and nickel, the group will set targets by the end of this year.
Leaders also floated quotas in select industries, with defense supply chains topping the list, alongside a shared platform to coordinate recycling efforts and new mining projects.
One official told Bloomberg the critical minerals plan was one of the few things leaders could fully agree on at a summit otherwise dominated by the US-Iran peace deal.
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China cut off Japan's rare earth supply in 2010 during a fight over the Senkaku Islands, sending Tokyo on a 15-year mission to find new sources for everything from EV magnets to military-grade metals.
Japan poured billions into projects in Australia and Vietnam over that stretch, including a major stake in Lynas - the largest rare earth producer outside China.
The result? It still buys about 75% of its rare earths from China.
That's the gap the G7 is now staring down, because rare earth mining and refining are dirty, expensive, and painfully slow to scale.
New projects worldwide keep stalling on funding shortages, permitting battles, and technical setbacks, which is why one G7 official said the 60% target probably won't get hit without forced quotas in some industries.
The US is feeling the same pinch - it currently has one operational rare earth mine, MP Materials in California, and for years shipped most of its output to China for processing before halting all sales to China in July 2025 under its Pentagon partnership.
Europe is in a similar bind, having passed its own Critical Raw Materials Act in 2024 with similar targets, but progress there has been slow too.
Meanwhile, China's leverage keeps growing. Last year Beijing imposed sweeping export controls on most critical minerals, with rules so strict that some companies report waiting months for shipment approvals.
This year it banned dual-use exports to Japan over a Taiwan dispute, including materials used in semiconductor manufacturing and aerospace components.
Three things are worth tracking from here: the end-of-year deadline for setting targets on the rest of the critical minerals list, whether the G7 actually rolls out quotas for defense suppliers, and whether any of this moves faster than Japan's decade-and-a-half effort.
Until then, China still makes 99% of the world's primary gallium and 85% of its processed cobalt - and the G7's deadline is five years out.
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