India has been invited to participate in a special meeting of Group of Seven (G7) finance ministers focused on critical minerals, according to U.S. Treasury Secretary Scott Bessent. The meeting is scheduled to take place in Washington on Monday and will include Australia and several other countries outside the G7 framework.

Meeting Background and Objectives

Bessent revealed that he had been advocating for a focused discussion on critical minerals since last summer's G7 leaders' summit. While finance ministers had already conducted a virtual meeting on the subject in December, the Washington gathering is designed to deepen coordination as supply chain risks continue to intensify.

The U.S. Treasury Secretary confirmed India's invitation but noted uncertainty about whether New Delhi had confirmed its participation. The identities of other non-G7 countries receiving invitations remain unclear.

Critical Minerals Challenge

The renewed urgency surrounding critical minerals stems from the G7's heavy dependence on China for essential materials. These include rare earths, lithium, cobalt, graphite, and copper—all crucial inputs for defense technologies, semiconductors, renewable energy equipment, and batteries.

Last June, G7 leaders agreed on an action plan aimed at securing mineral supply chains and strengthening economic resilience across member nations.

Australia's Strategic Role

Australia's participation is expected to be central to the discussions. In October, Canberra signed an agreement with Washington specifically designed to counter China's dominance in critical minerals, creating an $8.50 billion project pipeline.

The agreement leverages Australia's proposed strategic reserve, which is designed to supply vulnerable metals, including rare earths and lithium, during periods of supply disruption. Australia has reported that this initiative has attracted interest from Europe, Japan, South Korea, and Singapore.

China's Market Dominance

China's control over the critical minerals sector remains substantial. According to the International Energy Agency, China refines between 47% and 87% of global supplies of key critical minerals. Western governments have increasingly sought to reduce this reliance, particularly as Beijing has tightened export controls in recent years.

The timing of Monday's meeting follows recent reports that China had begun restricting rare earth and magnet exports to Japanese companies and imposed bans on certain dual-use items for Japan's military.

Complex Trade Relationships

Despite broader geopolitical tensions, Bessent noted that China continues to meet its commitments to purchase U.S. soybeans and ship critical minerals to U.S. firms. This highlights the complex interdependence that continues to shape global supply chains, even as nations work to diversify their mineral sourcing strategies.

Finance ministers from the Group of Seven nations are set to convene in Washington on January 12 to address critical issues surrounding rare earths supplies, according to three sources familiar with the matter. The high-level meeting represents a significant step in the G7's ongoing efforts to strengthen supply chain security for essential materials.

Key Discussion Points

The upcoming meeting will focus on several critical aspects of rare earths and mineral supply chains:

Price floors for rare earths will serve as a central point of discussion among the finance ministers. This mechanism aims to make investments in critical minerals outside China economically viable by establishing minimum pricing standards.

Supply Chain Dependencies

The G7 nations face significant challenges regarding their reliance on China for critical materials. Currently, G7 countries except Japan depend heavily or exclusively on China for various essential materials, including rare earth magnets and battery metals. This dependency has prompted urgent discussions about supply chain diversification and security measures.

Previous G7 Initiatives

The January meeting builds upon previous G7 commitments to address supply chain vulnerabilities. In June of the previous year, the G7 agreed on a comprehensive action plan designed to secure their supply chains and strengthen their economies. This action plan established the framework for ongoing discussions about critical mineral security.

Officials began exploring price floor mechanisms in the previous year as part of broader efforts to encourage investment in critical mineral projects outside China. The United States has already taken concrete action in this area, becoming the first G7 nation to establish a minimum price structure in a contract for domestic rare earths supplies.

Strategic Implications

The Washington meeting represents a coordinated international approach to addressing critical mineral supply chain challenges. By establishing price floors and other supportive mechanisms, the G7 nations aim to create economic incentives for developing alternative supply sources and reducing strategic dependencies on single-country suppliers.