Industrialised nations will use this week’s G7 energy ministers gathering in Toronto to accelerate plans for a coordinated strategy on critical minerals, aiming to reduce their dependence on China and secure supplies needed for clean-tech and defence industries.

The two-day meeting, beginning Thursday, builds on the Critical Minerals Action Plan announced by G7 leaders in western Canada in June — a framework designed to diversify supply chains and bolster joint economic and security interests.

The urgency has sharpened as Beijing continues to dominate processing of minerals vital for electric vehicles, renewable energy components, advanced electronics and military systems.

China’s Dominance in Focus

Although several countries possess significant mineral reserves, China controls the overwhelming majority of refining and processing capacity, particularly for rare earth elements used in high-performance magnets.

That leverage enables Beijing to stockpile resources and influence global availability, raising fears of supply disruptions similar to the oil shocks of the 1970s.

“We cannot afford another vulnerability like the one we saw in global energy markets decades ago,” said Tae-Yoon Kim, who leads the critical minerals division at the International Energy Agency. He called the Toronto talks a “major opportunity” for G7 members to rebalance market power.

Political Tension and Market Risks

The meeting also follows President Donald Trump’s announcement of a one-year rare-earth supply agreement with Chinese leader Xi Jinping during talks in South Korea — a deal to be renegotiated annually.

Analysts note the contradiction: while the G7 seeks to escape Chinese dominance, Washington simultaneously struck a minerals deal with Beijing.

Despite such political complexities, G7 members broadly agree that China’s practices — including state subsidies, capacity expansion and non-transparent pricing — distort global markets.

“For decades we’ve faced a competitor willing to weaponise industrial policy,” said Abigail Hunter, head of the Washington-based Center for Critical Minerals Strategy. “This has undermined free-market principles and fair trade.”

Canada Positions Itself as a Leader

Canada, host of the meeting, plans to reveal the first concrete steps under a new allied initiative to support extraction and processing in like-minded nations.

“This is a hinge point for the sector,” said Gregory Frame, spokesperson for Canada’s energy minister Tim Hodgson. Ottawa aims to develop value chains with partners that “share our values” and maintain transparent, rules-based markets.

Traceability and Clean-Supply Chains

One area expected to feature prominently is traceability — tracking minerals from mine to refinery to ensure they come from compliant suppliers.

Hunter warned that opaque ownership structures, particularly in Chinese-linked firms, still obscure the supply chain. “There is a web of entities with deep state ties,” she said. “If we don’t act now, we risk cementing a system where strategic minerals can be controlled or withheld.”

Despite diverging energy policies within the G7 — and lingering tension over US protectionism — officials say security of supply remains a unifying priority.

“We have a narrow window to get this right,” Hunter added. “It’s still open — but only just.”