Canada is spearheading a new initiative among G7 nations to end China’s dominance over the global supply of rare earth elements and other critical minerals essential for modern technology. At a Toronto summit this week, Canada will formally launch the Critical Minerals Production Alliance, an ambitious partnership aimed at ensuring secure supplies for the world’s leading democracies. The alliance comes as China tightens export controls on key materials used in artificial intelligence, electric vehicles, wind turbines, and defense systems.

Canadian Prime Minister Mark Carney and Energy and Natural Resources Minister Tim Hodgson have spent months negotiating with allies to build the framework. The effort represents one of the most coordinated responses yet to China’s long-standing control of critical mineral markets, which many G7 officials view as a strategic vulnerability.

Why Rare Earths Matter

Rare earth elements such as neodymium, dysprosium, and terbium are vital components in electric motors, missile guidance systems, radar, and advanced electronics. China currently mines about 60 percent and processes roughly 90 percent of the global supply, giving it enormous leverage over industrial and defense supply chains. Recent export restrictions from Beijing—justified on “national security” grounds—have forced countries to look for alternatives to prevent future economic coercion.

“These materials are being used as tools of geopolitical pressure,” Hodgson said. “It’s in nobody’s interest to have supply chains vulnerable to manipulation.”

Canada’s Plan to Supply the G7

Canada’s vast and largely untapped reserves of nickel, copper, cobalt, and rare earths are at the center of this new plan. The G7 alliance is expected to announce firm commitments for joint investments in mining and processing operations, as well as new mechanisms such as offtake agreements, stockpiling, and government-backed price supports. These arrangements will help fund infrastructure and ensure stable prices for buyers while reducing dependence on China.

According to Hodgson, the alliance will show “concrete announcements” proving that “a multilateral approach to securing supply chains and energy supplies works.” Canada has positioned itself as both a supplier and a coordinator for allied nations seeking reliable access to these materials.

Despite close cooperation, Canada’s relationship with the United States has been complicated by trade disputes. President Donald Trump recently suspended trade talks with Ottawa after objecting to a Canadian ad that repurposed a 1987 Ronald Reagan speech to criticize tariffs. The dispute temporarily derailed discussions on issues including tariffs on steel, aluminum, and autos, as well as the potential revival of the Keystone XL pipeline.

Hodgson has described Canada’s critical minerals as “cards” to play in ongoing negotiations with Washington, hinting that access to these resources could become leverage in broader trade talks. “When the Americans are ready to talk, we are ready to talk,” he said.

As the G7 prepares its response, Beijing’s export controls have underscored the urgency of diversifying supply chains. European Commission President Ursula von der Leyen has already begun developing a separate plan to secure Europe’s own mineral supplies. Yet experts warn that any temporary easing by China would not solve the underlying problem. “China has realized that its great power is economics,” said Jeff Townsend, founder of the Critical Minerals Association. “It’s not going to change its ways because it’s playing for China.”

Hodgson and Carney will both meet with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation summit in South Korea to push for a rollback of export limits. But even if China makes concessions, G7 nations appear determined to proceed with their alliance to build long-term resilience.

A Strategic Shift for the G7

The Critical Minerals Production Alliance marks a turning point in the global economic order. By combining resources and financing from North America, Europe, and Japan, the G7 hopes to establish new sources of supply for the materials driving the 21st-century economy. For Canada, it is both a national opportunity and a geopolitical mission: to transform its natural wealth into the backbone of a secure and sustainable industrial future.

Hodgson summed up the challenge with a sports metaphor: “Is this game in the first inning or the ninth? It’s too soon to tell. But Canada’s stepping up to the plate.”