EU to Bolster Critical Raw Materials Independence Amidst Geopolitical Pressure
the European Union is set to announce a new strategy,”ReSourceEU,” on Wednesday aimed at reducing its reliance on China for critical raw materials like rare earths (neodymium,terbium,yttrium) and strategic metals such as gallium. These materials are vital components in key industries including automotive, renewable energy, digital technology, and defense – used in everything from powerful magnets to semiconductors.
Currently, China dominates both the mining and, crucially, the refining of these essential resources, effectively holding a near-monopoly. This control is increasingly viewed as a potential economic weapon, with China recently increasing export restrictions and demanding sensitive industrial facts from European companies - practices likened to “racketeering.”
The move comes as Europe finds itself squeezed between China’s tightening grip on supply and the United States’ pursuit of bilateral agreements to secure its own access to these materials. A recent EU Chamber of Commerce in China study reveals that 60% of member companies anticipate supply chain disruptions, with 13% fearing production slowdowns or interruptions.
resourceeu’s Key Components:
The plan focuses on several key areas:
* European Center for Critical Raw Materials: Modeled after Japan’s JOGMEC, this center will facilitate group purchasing and strategic stockpiling of critical minerals.
* Boosting European Production & recycling: The strategy will promote increased raw material production within Europe and incentivize recycling initiatives.
* Streamlining approvals: Industry groups like Euromines are advocating for faster permitting processes for new mines and smelters, alongside limitations on appeals against these projects.
* Financial Support: Calls are being made for financing guarantees and mechanisms to offset the price disadvantage faced by European producers compared to China.
Alongside ReSourceEU, the EU will also unveil an updated “economic security” doctrine. While not expanding its trade arsenal, this doctrine will reassess risks and refine the use of existing tools, including control of foreign direct investments, restrictions on the export of certain goods, and diversification of supplier countries. This update builds on a previous doctrine established in 2023, prompted by lessons learned from the COVID-19 pandemic and the war in Ukraine, and is now being revisited due to escalating geopolitical and commercial tensions, notably with the US.
the urgency for action is clear. As Florian Anderhuber of Euromines states, “We must no longer wait to act.” The EU aims to proactively secure its supply chains and reduce its vulnerability in a rapidly changing global landscape.
