G7 leaders back Ukraine, plan greater pressure on Russia

* Leaders statement underlines Ukraine's growing leverage

* Discussion on critical minerals comes on final day of summit

* 2025 China export curbs highlighted dependencies

* China sits on large current account surplus (Recasts with Ukraine and Iran statements)

By Julia Payne, John Irish and Michel Rose

EVIAN-LES-BAINS, France, June 17 (Reuters) - G7 leaders said on Wednesday they stand united to support Ukraine, including its territorial integrity, and agreed to increase sanctions on Russia, in a statement that underscores Kyiv's growing leverage as it seeks peace talks with Moscow.

The unity of the joint statement from the June 15-17 G7 summit in the French lakeside resort of Evian-les-Bains was notable as U.S. President Donald Trump's administration has at times been hard to bring on board, particularly on the thorny issue of how to end the Ukraine war.

It followed what Trump called a "very good" meeting with Ukrainian President Volodymyr Zelenskiy and other G7 leaders on Tuesday, sparking optimism that a peace deal could be struck. Zelenskiy said he could meet Trump again on Wednesday.

It also reflects how Ukraine has strengthened its position after successful drone incursions weakened Russia's hand.

The G7 leaders also welcomed the preliminary peace deal between the United States and Iran - which Trump signed on the eve of the summit - and said they are ready to contribute to its implementation.

They added they will make efforts to diversify energy supply routes to reduce dependence on the Strait of Hormuz and increase energy stocks.

On Wednesday, in a central theme of France's G7 presidency, leaders will turn their attention to critical minerals and global economic imbalances.

France is pushing partners to agree a statement on critical minerals that could include measures to help the West reduce its reliance on China and shield investors from counter-measures and dumping, diplomats said.

China spooked the global economy last year when some industries nearly ground to a halt after Beijing imposed export curbs on permanent magnets made of rare earths- an episode which highlighted how reliant Western supply chains in the energy, defence and technology sectors are on these goods.

"We are negotiating texts that are significant on critical minerals and, as a consequence, on economic sovereignty," a French presidency official said ahead of the summit.

Measures under discussion in recent months have included price supports, market standards, subsidies and guaranteed purchases, as well as means to scale up private investment in critical mineral supply chains outside China. However, any measures announced at the G7 are likely to be first steps.

OVER-RELIANCE ON CHINA

The 2025 restrictions were the latest in Beijing's gradual tightening of its niche material and battery metal exports. It has also curbed American companies' access to tungsten and antimony, among others.

Western powers are racing to secure offtake from mines and build up processing and recycling capacity, but it will take years to dent China's dominant position, which was decades in the making.

The United States proposed in early 2026 a trading bloc for critical minerals. However, countries are at odds over how this bloc could operate, especially in the context of the White House's "America First" agenda.

ECONOMIC IMBALANCES

G7 leaders will also discuss how to rebalance global trade and address "predatory competition", mainly by China. France summarizes the imbalances as: China produces too much, the U.S. consumes too much and the Europeans invest too little.

There's growing alarm in Europe at China's record trade surplus and its move up the ?value chain, in what analysts describe as a "second China shock" following its dominance of low-value industries in the 2000s.

France's President Emmanuel Macron sought to engage China ahead of the summit in a last-ditch effort at cooperation. Beijing rejects EU claims of unfair subsidies and has repeatedly vowed "strong" countermeasures to the EU's proposed "Buy European" and revised tech sovereignty rules.

EU leaders will separately debate tougher and a more systematic use of trade defence measures against China's surging imports at a summit in Brussels on Thursday.

The EU last year recorded its largest-ever trade deficit with China of over ?360 billion.

G7 leaders will also discuss AI over lunch on Wednesday, including the liability of bots and agents, and how AI presents what is true and false. OpenAI founder Sam Altman and Anthropic CEO Dario Amodei are expected to attend. (Reporting by Julia Payne, Michel Rose, John Irish; Writing by Julia Payne and Gabriel Stargardter, Editing by Sanjeev Miglani)