The Group of Seven (G7) is deeply concerned about rare earths: reducing reliance on China. G7 finance ministers are preparing to cooperate in producing and refining "rare earths."

To reduce dependence on China's rare earth supply, G7 finance ministers have discussed plans to collaborate on production and refining efforts. Reducing reliance on Chinese rare earths is one of the key goals of the G7 finance ministers' meeting, which took place in Paris on the 18th and 19th. Finance ministers from the United States, Japan, Germany, the United Kingdom, Canada, Italy, and France plan to discuss global imbalances—such as the U.S. trade deficit, China’s trade surplus, and Europe’s sluggish investment. However, they also intend to address a very specific issue: rare earth elements. Notably, France has a long history of rare earth mining.

What are rare earth elements?

Rare earth elements refer to 17 metals used in manufacturing various types of permanent magnets—for example, those used in electric vehicle motors, brakes, wind turbines, and aircraft. A typical internal combustion engine car contains rare earth elements worth around €10, while an electric vehicle contains those worth approximately €80. Examples include dysprosium and neodymium.

This is a relatively small global market—valued at €6 billion—with modest demand: outside China, annual demand stands at only 30,000 to 40,000 tons. Yet these elements are crucial; demand is expected to increase by 50% by 2035—and most importantly, China controls 80% of the global market share.

Why? For economic and environmental reasons, all countries have outsourced rare earth mining and refining operations. However, France has a long-standing history of rare earth extraction, particularly in La Rochelle, which produced half the world’s rare earths before the 1990s.

The G7 has agreed to coordinate efforts to reduce dependency on China. In practice, this means cutting current reliance—from the present 80% down to, for instance, 30% to 50%, depending on the industry. Roland Lescure, France’s Minister for the Economy, Finance, Industrial and Digital Sovereignty, has made this a top priority.

Over the past few months, responsibilities have been clearly divided among nations: Australia and South Korea are each focusing on specific areas. Meanwhile, work continues on joint procurement, project financing, strategic reserves, and protective measures.

Would producing electric vehicles in Europe under stricter environmental standards cost more than doing so in China? Yes. It would add approximately €150 to the price of an EV. Is it worth it? The answer is yes.

An important point: manufacturers (such as Renault) are developing engines that do not rely on rare earth elements. Beyond that, there remains a broader question: under Donald Trump’s leadership, which favors unilateralism, does multilateralism still have a future? Thus, the Paris summit represents a crucial test—and France is leading the charge. If a formal agreement is reached, France, as the current G7 rotating chair, is likely to announce it at the upcoming G7 leaders’ summit in Évian within a month.

The case of rare earth elements illustrates this truth: not everything rare is necessarily expensive, but rare things are often highly valuable. Should developed nations succeed in collaborating to reduce their dependence on other countries, such cooperation would itself be both rare and precious.

Source: rfi

Original article: toutiao.com/article/1865680157951123/

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