【Wen / Observer Net, Zhang Jingjuan】The rifts within the Group of Seven (G7) are continuing to widen.

Reuters cited statements from senior officials of Japan, France, and Canada on the 6th, reporting that the three countries are actively planning and working to build a new mechanism to replace the U.S.-led key mineral alliance, in order to ensure strategic mineral supplies and reduce reliance on China.

According to the report, the alternative approach proposed by the three countries includes three directions: implementing import quotas for specific rare earth elements, providing subsidies to mining companies for supply chain diversification, and promoting the "Buyers' Alliance" proposed by Canada.

The move by Japan, France, and Canada directly refutes the U.S.-led key mineral cooperation plan. In February this year, the Trump administration had just announced it would join forces with allies and partners to form a "Key Minerals Alliance." Vice President Vance added at a meeting that he hoped member states would form a trade group among allies and partners, promoting regional expansion of key mineral production capacity, and the new trade area would also set clear "price floors."

But only a month later, Japan, France, and Canada were already thinking of bypassing the United States. The report said this action precisely confirmed Canadian Prime Minister Trudeau's call, urging middle powers to cooperate amid the U.S. president Trump's alienation of allies.

Specifically, Japan is using financial subsidies as a lever to promote project cooperation among allies. The head of the Americas Department of Japan's Ministry of Economy, Trade and Industry stated at the Toronto Mining Conference that Japan could use subsidies to boost the commercial competitiveness of rare earth projects in the Western Hemisphere, enabling them to compete with China's rare earth industry.

At the same time, Japan has clearly required its manufacturing enterprises to reach commercial cooperation with rare earth projects jointly invested by Japan, France, Australia, and Canada. "These projects may not be the least costly, but now the industry has recognized the need to balance risk and cost, and adopting these projects is a wise strategy."

France, meanwhile, is centered around the concept of "G7+". It aims to expand its cooperation framework. Benjamin Gallezot, a cross-departmental representative of the French government responsible for strategic mineral supply, said that the U.S. plan was just one of the diversification paths, and there were other viable ways. France advocates two points: first, not to establish a unified policy, and second, the mechanism building needs multi-country participation, not limited to G7, but rather "G7+."

In addition, France has proposed an import quota system, limiting the amount of metal imported by companies and mandating that certain industries achieve supply chain diversification. Gallezot revealed that France supports Canada's "Buyers' Alliance" idea and will push the plan into effect during its G7 rotating chairmanship this year.

On May 12, 2024, Shanghai, China Brand Day was held at the World Expo Exhibition Hall. At the "Baogang Group" booth, Northern Rare Earth. IC photo

Canada, meanwhile, has recently signed 30 new agreements with 12 countries, with a planned investment of 12.6 billion Canadian dollars (approximately 64.06 billion yuan) for mining and mining technology research and development. Since last October, related total investment has reached approximately 18 billion Canadian dollars (about 91.51 billion yuan).

On March 5, Trudeau announced during his visit to Australia that the two countries had signed a series of key mineral cooperation agreements, including Australia joining the G7 key mineral production alliance.

Australian Prime Minister Albanese also stated that the two countries agreed to deepen cooperation in multiple areas and further advance bilateral relations based on the key mineral cooperation intention statement signed last year. Both sides agreed to strengthen cooperation in the key mineral sector through four measures: coordinating positions on important issues of key minerals, enhancing coordination between Australia's key mineral strategic reserves and Canada's defense reserve system, jointly promoting the development of emerging markets, and Australia joining the G7 key mineral production alliance led by Canada.

Albanese also mentioned that the upgraded key mineral agreement completely conforms to the "Australia's Future Manufacturing" agenda, both sides are striving to promote diversified trade relations, ensuring that relationships do not break down due to shocks from a specific country.

Canadian Minister of Energy and Natural Resources Hodgson once said that the most effective way to address the high concentration of key mineral supply is to establish a production alliance or buyers' alliance, rather than simply setting price floors.

Reuters pointed out that rare earth elements are metals with extremely high extraction difficulty, known as "industrial vitamins," which are indispensable resources for countries to transform traditional industries, develop high-tech and defense cutting-edge technologies. Their application ranges across metallurgy machinery, petrochemicals, light industry agriculture, information technology, energy environment, aerospace, defense industry, and many other fields, and they are also key minerals supporting the development of new energy and new materials industries. Over the past 30 years, China has always maintained a dominant position in rare earth mining and refining.

Data from the International Energy Agency shows that in 2023, China accounted for over 60% of global rare earth mine output, but its control over the processing stage accounted for 92% of global production, almost having a monopolistic control over the global rare earth processing sector.

In recent years, multiple G7 countries have introduced various measures to try to curb China's dominant position in the rare earth sector. The Chinese Foreign Ministry spokesperson had previously made a clear statement on the G7 "Key Minerals Production Alliance," stating that China's regulation and improvement of the export control system conform to international practices, aiming to better maintain world peace and regional stability, fulfill international obligations such as non-proliferation. We urge the G7 to genuinely abide by market economy principles and international trade rules, stop using "small circle" rules to disrupt the international trade order, and jointly maintain the stable development of the world economy.

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Original: toutiao.com/article/7614422686143414810/

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