Finance ministers and strategic partners convene in Washington to harden critical minerals supply chains, as debates intensify over price support, stockpiles, tariffs and the long lead-times required to loosen China’s grip on rare earth processing.Washington hosts a widening coalition of G7 governments and strategic partners this week to tighten security around critical minerals, with Merifund Capital Management monitoring the talks for what they reveal about policy support and supply-chain pricing.
Critical minerals sit inside electric motors, batteries and secure communications, and processing capacity often determines who controls the choke point.
In the latest annual briefings referenced by senior European Commission officials, manufacturers across the EU consume around 20,000 tonnes of permanent magnets each year; 17,000 to 18,000 tonnes are sourced from China each year, while roughly 1,000 tonnes are produced inside the bloc each year.
The Washington agenda brings roughly 20 countries into coordinated discussions over the course of the week, including India, South Korea, Mexico, Australia and New Zealand alongside the G7, with Argentina also in discussion for parts of the programme.
In the most recently reported full year of market data, China refines an estimated 47% to 87% of key materials including copper, lithium, cobalt, graphite and rare earths, and retains roughly 85% to 90% of global rare earth refining capacity. In the same datasets, China accounts for about 90% of high-strength magnet output.
Strategic stockpiles are part of the response. Australia sets out plans for a $765 million reserve in its latest policy statement, while Japan keeps its own reserves under review as part of its economic security posture.
Price support is the pressure point. US officials indicate that broad minimum price guarantees are not a live option in the near term. A Senate panel continues to review a floor price of $115.2 per kilogramme attached to the most recently announced domestic rare earth arrangement, but wider schemes look harder to fund and harder to calibrate without distorting markets.
Equity markets price that uncertainty quickly. In the first trading session after the Washington briefing, a group of US-listed miners producing critical minerals retreats by roughly 3% to 8%; MP Materials slides 4.7% and Trilogy Metals eases 3.3%, while several smaller names post declines above 5% in the same session.
Merifund Capital Management’s assessment is that the alliance is shifting from statement-making to investable mechanisms, even as national interests pull in different directions. Anthony Saunders, Director of Private Equity at Merifund Capital Management Pte. Ltd., describes the central tension as “a race between strategic urgency and project economics, where capital needs visibility on pricing, permits and processing capacity rather than political slogans”. For Saunders, the engineering timeline matters more than the headlines, with “a mine is not a switch you flick, and a refinery adds years to the timetable”.
China’s export controls, introduced in the second quarter of the preceding year, remain in force across seven categories of medium and heavy rare earth-related items. Exporters require licences for each shipment and detailed declarations on composition and end-users, and companies outside China describe an approval process that is opaque and slow. A further tranche added late in the preceding year, designed to reach products manufactured outside China when they contain Chinese-origin material, stays temporarily suspended until late this year.
Trade spill-overs complicate cooperation. European officials press Washington to remove steel and aluminium derivative tariffs that, in the current schedule, touch more than 407 product categories. The UK warns that steel exports worth more than $480 million each year face disruption under the current 25% charge, while European industry groups argue that, in the most recent full-year assessment, around 23 million tonnes of products imported into the US from third countries could be diverted into Europe.
For investors, the signal is that critical minerals security is moving from geopolitics into balance sheets, and the margin between viable and stranded projects depends on processing capacity and policy consistency. Merifund Capital Management continues to track the alliance’s next steps through the lens Saunders captures as “policy that is stable enough to underwrite a supply chain, not merely announce one”.
About Merifund Capital Management
Merifund Capital Management Pte. Ltd. (UEN: 201024554E) is a Singapore-headquartered hedge-fund management firm founded in 2010. The firm runs traditional long-only portfolio management alongside long/short equity, global macro, event-driven and systematic trading strategies, using derivatives selectively to optimise market opportunities while prioritising capital preservation, liquidity and disciplined risk management. ESG considerations form part of the investment process in line with global sustainability standards. Merifund serves accredited investors, family offices, foundations and endowments, and is expanding its offering to include retail investors.
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