According to Reuters, several informed sources revealed that G7 member states and the EU are considering setting a low price limit for rare earth to promote rare earth production, and plans to tax some of China's exports of rare earth products to stimulate investment in related fields.
With the exception of Japan, G7 member states rely heavily or entirely on China in various materials such as rare-earth magnets and battery metals.In order to address the so-called security risks, G7 leaders launched the Key Minerals Action Plan in June this year, and the technical team met in Chicago earlier this month.
One informed source said that the central theme of the Chicago conference was “whether to raise the regulatory threshold for foreign investment in key raw materials to prevent enterprises from flowing to China.” Australia also attended the meeting.
"Another option is to impose geographical restrictions, but there are differences within the G7," the person added. It is understood that such restrictions may include localising procurement rules or restricting purchases from specific countries such as China in public procurement tenders.
Reuters also quoted two other sources informed that the G7 also discussed plans to impose tariffs or carbon taxes on China's exports of rare-earth and small-scale metals, which will be calculated based on the proportion of non-renewable energy used in its production.
A U.S. government official also confirmed to Reuters on Thursday that the U.S. is discussing wider trade measures with G7 and EU leaders to prevent rare earth dumping, including tariffs, price limits or other measures.
According to sources, the U.S. has recently introduced a low-price mechanism to encourage domestic rare earth production, while G7 officials are also considering following the U.S. subsidized low-price policy. Canada is positive but has not yet pledged to take such action. Australia has also separately considered setting a low-price to support key mineral projects including rare earth.
However, for companies in the G7 countries, China’s important position in the global rare earth industry chain is difficult to cut them off. According to Bloomberg, Rahim Suleiman, chief executive of Canadian metal supplier Neo Performance Materials Inc., said on Thursday at a rare earth conference around “How to build a supply chain that doesn’t depend on China” that with technology and market competitive advantage, China should continue to be an important link in the global rare earth supply chain.
Suleiman said: "China will remain the dominant player in this field, and frankly speaking, it should continue to maintain this position."
For decades, China has established a strong dominance in the field of rare earth, according to Bloomberg.The efforts of Western countries to exclude China from the supply chain are facing a real challenge: Chinese rare earth products have more price advantages, and the ability to meet the special needs of customers is also prominent.