The G7's Mineral Makeover: Where to Bet on Supply Chain Diversification and Recycling Tech

The G7's 2025 Critical Minerals Strategy has crystallized a pivotal shift in global economic strategy: securing supply chains for critical minerals like lithium, cobalt, rare earth elements (REEs), and graphite is now a top geopolitical priority. With China controlling over 80% of the world's rare earth refining capacity and dominating mining projects in Africa, the G7's push to diversify sourcing, invest in recycling, and counter non-market practices creates a clear roadmap for investors. Here's where to place your bets.

The G7's Playbook: Diversification and Recycling as National Security Tools

The G7's strategy hinges on two pillars: de-risking supply chains through alternative sourcing and circular economy investments to reduce raw material demand. The Partnership for Global Infrastructure and Investment (PGI) aims to channel $600 billion into projects like the Lobito Corridor railway in Southern Africa, which could streamline transport of cobalt and copper to global markets. Meanwhile, the Minerals Security Partnership (MSP) targets smaller-scale initiatives, such as cobalt refining in Canada and rare earth feasibility studies in Angola.

Yet these projects remain fragmented compared to China's scale. To address this, the G7 is considering a Critical Minerals Investment Fund to pool capital and de-risk projects. This could supercharge opportunities in geographies outside China, such as Canada's rare earth projects or African mines with guaranteed offtake agreements (e.g., Japan's Namibian rare earth partnership).

Investing in the Recycling Tech Boom: A Necessity, Not a Niche

Recycling is the overlooked linchpin of the strategy. The G7 explicitly aims to “phase out fossil fuel subsidies by 2025” while scaling renewables and EVs, which rely on minerals with limited recycling rates today. For instance, less than 5% of lithium-ion batteries are recycled in the U.S., leaving vast upside for companies with closed-loop systems or urban mining capabilities.

ioneer's ASX-listed shares surged 300% in 2023 amid its Nevada-based rare earth project, but its North American recycling partnerships could amplify its appeal. Similarly, American Manganese (AMY) is advancing a process to recover 92% of lithium from battery waste—a breakthrough that could slash raw material demand.

Three Strategic Investment Themes to Watch

1. Battery Recycling Leaders:
   Companies like Redwood Materials (backed by Tesla's Elon Musk) and Li-Cycle are building vertically integrated networks to recycle cobalt, nickel, and lithium. Look for those with long-term contracts with automakers or EV battery manufacturers.

2. Rare Earth and Graphite Projects Outside China:
   Canadian firms like Rare Element Resources (RELE) and Critical Elements (CRETF) are advancing REE projects with low geopolitical risk. In Africa, partnerships with G7-backed offtake agreements—such as Namibia's Lofdal rare earth project—could create outsized returns.

3. AI-Driven Mineral Exploration and Processing:
   Firms leveraging AI to optimize mining (e.g., KoBold Metals) or refine low-grade ores (e.g., Clean Energy Metals) stand to gain as the G7 prioritizes “responsible extraction” over low-cost, environmentally damaging alternatives.

Risks and Reality Checks

The G7's ambitions face hurdles: U.S. funding delays for the Lobito Corridor, the MSP's small-scale projects, and China's entrenched midstream control (e.g., 97% of global rare earth refining occurs in China). Investors must favor vertically integrated companies or those with strategic partnerships to navigate these challenges.

Final Take: Ride the Geopolitical Wave

The G7's strategy isn't just about countering China—it's about building supply chains that are resilient, ethical, and tech-driven. Investors who bet on recycling innovators, non-Chinese mineral projects, and AI-optimized processes are positioning themselves at the intersection of geopolitics and green tech. With the G7's investment fund potentially unlocking trillions in capital, now is the time to secure a stake in the next era of mineral abundance.

As cobalt prices correlate with EV adoption, companies that control recycling or non-Chinese sources will be the winners. The G7's blueprint is clear—the question is, will investors act before the rush begins?