The Great Minerals Scramble

Fifty-four countries. One day. Zero consensus on how to pay for it.

The G7 wrapped its summit in Évian, France, on Wednesday with a pledge to cut reliance on China for rare earths to 60% by 2030, according to Bloomberg. That target -- ambitious given Japan still sources 75% of its rare earths from China despite a decade of diversification efforts -- came alongside the launch of a critical minerals alliance and vague promises of "price stabilization mechanisms." What it didn't include was agreement on the Trump administration's proposal to use Pentagon AI models to set mineral prices, a plan that has divided both allies and the U.S. mining industry itself, Reuters reported.

The discord reflects a deeper problem. Western governments agree they need to break China's processing dominance -- Beijing controls roughly 90% of global critical mineral refining, per IEA data -- but they can't agree on who pays, how much, or whether artificial price floors will work at all. Meanwhile, China just formalized new mineral export regulations that took effect June 15, tightening its grip precisely as the West scrambles to loosen it.

Can You Build a Buyers' Club Without a Price Tag?

Vice President JD Vance first floated the idea of a Western critical minerals trading bloc in February, pitching it as a way to counter China's strategy of flooding markets with below-cost materials to crush competitors. The concept: coordinate price supports, guaranteed purchases, or subsidies across allied nations to make Western mining economically viable again. Enforcement would come via "adjustable tariffs to uphold pricing integrity," Vance said at the time.

Four months later, the plan is stalling. G7 members have "pushed back against U.S. Trade Representative Jamieson Greer in private negotiations," three sources told Reuters, cooling on the Pentagon's AI-derived pricing scheme. European officials want to know who pays the premium, how far down the supply chain subsidies extend, and how governance would function. The U.S. mining industry is equally split -- more than 230 public submissions to Greer's office reveal sharp disagreements, with the National Mining Association urging a focus on tax credits over price-fixing.

"It is a very hard thing to do, and I'm happy I'm not the one doing it," Ashley Zumwalt-Forbes, a former Biden administration minerals official, told Reuters.

The G7 did agree on concrete targets for rare earths and permanent magnets: no single country should supply more than 60% by 2030, dropping to 50% "as soon as possible" after that. For other critical minerals, they promised specific targets by year-end. But targets without funding mechanisms are aspirations, not policy.

Why Copper Smelters Are Paying Miners to Take Their Ore

While diplomats debated pricing theory, copper markets delivered a real-world lesson in supply scarcity. Chilean miner Antofagasta and a Chinese smelter agreed in December to treatment and refining charges of $0 per ton for 2026 -- down from $21.25 in 2025, according to Mining.com. That's the lowest on record. It also means smelters are no longer charging miners to process concentrate into refined metal. In some spot markets, they're paying for the privilege.

The inversion reflects brutal math. Copper concentrate is scarce. Smelting capacity is abundant. The International Copper Study Group now forecasts a 150,000-ton refined copper deficit in 2026, the market's first structural shortage since 2009. J.P. Morgan sees it worse: 330,000 tons short. S&P Global warned in January that demand will jump 50% by 2040 while supply falls 10 million tons short -- a gap it called a "systemic risk for global industries, technological advancement and economic growth."

AI data centers alone will consume roughly 475,000 metric tons of copper in 2026, per J.P. Morgan estimates. Each new hyperscale facility requires up to 50,000 tons. Electrification, grid expansion, and defense spending are layering on top. Meanwhile, mine disruptions at Grasberg in Indonesia, Kamoa-Kakula in the DRC, and Chile's El Teniente have stretched through 2025, with some sites not expected to recover until 2027 or later.

Zero processing charges signal that miners hold pricing power. That's a reversal from the past two decades, when Chinese smelters could dictate terms. It also underscores why Beijing's export controls -- which now cover rare earths, graphite, antimony, and tungsten -- carry so much weight. If you control processing, you control the chokepoint.

Who's Actually Securing Supply?

Canada is moving faster than the G7's talking points. Prime Minister Mark Carney offered Italy priority access to Canadian critical mineral reserves during bilateral talks at the summit, Mining.com reported. The agreement builds on Italian energy giant Eni's nearly C$100 million investment in Nouveau Monde Graphite's Matawinie project in Québec -- one of the most advanced large-flake graphite developments in the Western Hemisphere.

Carney also announced over $5 billion in new critical minerals partnerships at the summit, including deals with Germany, Japan, France, and Portugal. France, Germany, Italy, and South Korea all intend to partner with Canada on stockpiling arrangements, according to a Canadian government statement. The approach is transactional: capital for access, with ESG compliance baked in to meet European procurement standards.

The U.S. is taking a different path. At February's Critical Minerals Ministerial in Washington, Secretary of State Marco Rubio launched FORGE -- the Forum on Resource Geostrategic Engagement -- as the successor to the Minerals Security Partnership. The initiative signed bilateral frameworks with Guinea and Morocco and announced action plans with Mexico, the EU, and Japan. Kenya, which holds rare earth deposits at Mrima Hill estimated to be worth $62 billion, is negotiating a deal that President Ruto says is "close," per Reuters.

But the U.S. approach has drawn skepticism in Africa. "The market for critical minerals is attracting the covetousness of major world powers," Koko Buroko Gloire, a Congolese commentator, told Al Jazeera. The DRC holds roughly 70% of global cobalt reserves, yet remains confined to exporting raw ore while refining happens elsewhere. Whether Washington's deals deliver infrastructure, processing capacity, and local jobs -- or just secure cheap feedstock -- will determine whether they hold.

What Changed This Week

The G7 set the first quantitative target for reducing China dependence, committing to a 60% cap on rare earth imports by 2030. Canada formalized over $5 billion in critical minerals partnerships, positioning itself as the West's preferred supplier. China's new mineral export regulations, which took effect June 15, codified Beijing's authority to manage production volumes and processing allocations across critical categories. And copper's zero treatment charges confirmed that the era of abundant supply is over -- scarcity is now structural, not cyclical.

What to Watch

The G7 promised specific diversification targets for critical minerals beyond rare earths by the end of 2026. Watch whether those include enforcement mechanisms or remain aspirational. China's temporary suspension of certain rare earth export controls expires November 10, 2026 -- if Beijing reinstates or expands restrictions, Q4 becomes a supply scramble. Copper concentrate deficits are projected to widen through 2027, with alternative suppliers in Vietnam, Malaysia, and the U.S. not reaching operational scale until late 2027 at the earliest. And the Trump administration's pricing plan faces a decision point: either the White House scales back its AI-driven model to win European buy-in, or the trading bloc launches without a unified pricing mechanism -- which would make it a club in name only.