Amid the global search for more secure sources of minerals and critical elements, the European Union (EU) developed a two-pronged policy that aims at elevating the Union’s posture in the critical minerals market, making it less dependent on any single external supplier. The first strand of a new approach is the acceleration of EU-based new legislation and the work on new initiatives to attract investments into the extraction and development of various minerals and rare earth elements (REEs). The second strand of the policy is the intensified outreach to the regions that are regarded as possessing large resources critical for the semiconductor industry, decarbonization and therefore green and digital transition, which in turn are essential for a wide variety of sprawling businesses such as electric vehicles. Both are parts of the unfolding geopolitical struggle between great powers over who will control the flow of minerals and REEs globally. The EU sees a threat of being cut from the Chinese mineral sources and, therefore, has become more active in its efforts to diversify its supply chains.
REEs Problem
Rare earth elements are indispensable for electric motors, offshore wind turbines, robotics, precision-guided systems, aircraft, medical equipment and digital infrastructure. The following rare earth magnets—neodymium, praseodymium, dysprosium, and terbium—are difficult to separate and refine in an efficient way. According to the International Energy Agency’s (IEA) 2026 assessment, China accounted for approximately 60 percent of global rare-earth magnet mining, 91 percent of refining and 94 percent of permanent magnet production in 2024. The latter component is the most consequential because a country may possess mineral deposits and even produce concentrates, but without separation and magnet-manufacturing capacity, it will remain dependent on the dominant industrial ecosystem.
This constitutes a problem for the EU because China’s export-control measures introduced in 2025 directly impacted European countries. That year, Beijing introduced controls on seven heavy rare earth elements, associated compounds and magnets. Export volumes fell sharply, and manufacturers in Europe began facing shortages and delays. China later widened its control architecture, including measures capable of reaching foreign-made products containing Chinese-origin rare-earth inputs or produced with Chinese technologies. Some measures were later suspended, but Beijing’s approach demonstrated that licensing procedures could be used for geopolitical purposes to constrain competitors.
The IEA estimates that full implementation of broad rare-earth export controls could place about $6.5 trillion of annual production outside China at risk. The EU’s exposure could exceed $1.5 trillion, with the automotive sector being impacted the most. This is why rare earths are increasingly a geopolitical issue that can halt production of goods worth hundreds or thousands of times more and send entire markets into chaos.
The EU has had to respond, but seeks to do so in a more balanced way. Brussels cannot opt for a complete and formal decoupling from China. It simply would not be able to do that given the level of interdependence. Indeed, China will remain an important supplier and market, and European companies cannot quickly diversify given its scale, cost structure or already advanced technical ecosystem. What the EU is pushing for could be termed as de-risking, the idea that fits into European countries’ overall approach toward China over the past few years. A key component of the approach is to accelerate diversification of supply chains, and this can be achieved through a variety of measures, but most of all through legislation and outreach to other markets across the globe.
EU measures
One of the core elements of the EU’s approach to critical minerals is the Critical Raw Materials Act (CRMA), passed in March 2024. It aims to safeguard the EU from competitors and ensure that industries such as electric vehicles, wind turbines, other green energies, digitalization, and the space industry are increasingly less dependent on China.[1] The dependence on external players is a real problem for the EU, given the fact that it needs around 25 percent of the world’s raw materials but has the capacity to produce only a small fraction—2 percent.[2] It makes the EU extremely vulnerable to geopolitical headwinds, whether these are wars in the Middle East or Ukraine or the general exacerbation of U.S.-China competition.
There are 34 minerals and metals that are important for the EU, which include 16 strategic raw materials. Though of high importance, the supply chain of these elements is relatively diversified, which allows the EU to be more flexible in its approach. However, when it comes to the rest of the elements, those mainly come from China. The latter is the biggest producer of gallium, germanium, tungsten, magnesium and others. Tungsten and gallium are especially important, and the EU has already announced it will be stockpiling these two elements.[3] Moreover, given that gallium is essential for semiconductors and LEDs, the METLEN Energy & Metals project in Greece, with funding of around €90 million from the European Investment Bank (EIB), will work on setting up the Union’s inaugural production of gallium.[4]
By 2030, the EU aims to extract at least 10 percent of its annual consumption of strategic raw materials, process at least 40 percent and obtain at least 25 percent through recycling. It also seeks to ensure that no more than 65 percent of annual consumption of any strategic raw material at a relevant processing stage comes from a single non-EU country. The benchmarks establish a common direction for member states and industry and create a political test against which progress can be measured.
The CRMA also created the category of Strategic Projects. These projects receive political visibility, coordinated assistance and shortened deadlines: in principle, no more than 27 months for extraction projects and 15 months for processing or recycling projects, subject to limited extensions. In March 2025, the Commission designated 47 projects inside the EU, covering extraction, processing and recycling in 13 member states. In June 2025, it added 13 projects in third countries and overseas territories. Together, the first 60 projects span lithium, nickel, cobalt, graphite, manganese, copper, tungsten, gallium, rare earths and other strategic inputs.
This project-based approach is important because Europe’s vulnerability is based on the lack of material. A general increase in mining output does little to solve dependence if ores must still be sent to China for separation or if European manufacturers lack access to magnets, anodes or battery-grade compounds. The most valuable projects are therefore those that connect several stages of the value chain and have credible European customers.
The CRMA nonetheless has certain weaknesses, largely because its benchmarks are non-binding. The EU could approach an overall extraction target while remaining almost completely dependent on foreign suppliers for rare earths or natural graphite. The strategic status of an element does not guarantee financing from the EU, technical feasibility or an offtake agreement (a legal contract between a producer and a buyer to purchase goods). Nor does the CRMA itself provide funding for the selected projects. In short, the CRMA can accelerate procedures, but it cannot make an unprofitable project commercially viable.
There are other measures the EU has taken. The December 2025 RESourceEU Action Plan marked a second and more interventionist phase. It reflects the Commission’s conclusion that permitting reform and voluntary diversification are insufficient in a market shaped by state-backed competitors, price volatility and the processing capacity that far outstrips the EU’s potential.[5] RESourceEU also envisages a European Critical Raw Materials Centre (the Centre), modeled in part on institutions such as Japan’s Organization for Metals and Energy Security. The Centre is envisaged to develop market intelligence, attract investment, monitor projects, coordinate stockpiles, and facilitate joint purchasing. The Commission also announced that €3 billion would be mobilized for projects capable of supplying alternatives in the short term, with the stated ambition of reducing dependence on a single external actor (i.e., China) by as much as 50 percent by 2029.
In one of the latest moves by the EU aiming to build alternative supply chains, Brussels launched operations of a critical minerals procurement platform—the Raw Materials Mechanism (RMM). The platform allows European buyers to aggregate demand and connect with suppliers, financial institutions and storage providers. Its initial focus includes rare earths, battery inputs and defense-related materials. The mechanism is voluntary and market-based, but its strategic purpose is clear: to combine demand all across the European Union and give smaller firms access to alternative suppliers. This is particularly important given that the EU’s demand for minerals and rare earth metals is expected to grow sixfold by 2030 and sevenfold by 2050. The demand for lithium is likewise expected to grow significantly.[6] The emphasis on lithium is particularly important, evidenced by Germany’s Rock Tech Lithium project—the EU’s first commercial lithium hydroxide production facility.
The Commission has also proposed strengthening corporate responsibility for supply security. The planned amendment to the Critical Raw Materials Act would allow the Commission to identify large companies exposed to critical-material disruptions, request information on existing and emerging vulnerabilities and propose risk-mitigation measures, including reduced dependence on a single supplier. It also seeks to improve recycling and traceability requirements for permanent magnets. The Council adopted its negotiating position in March 2026, although the final legislative outcome still depends on agreement with the European Parliament.
This is a significant change in the EU’s economic governance. Brussels is moving from monitoring dependencies to shaping company behavior. If voluntary diversification fails, binding sourcing obligations, resilience requirements in procurement or conditions attached to public support may follow. The EU is not yet operating a centralized minerals agency with the financial strength characteristic of a sovereign institution, but the overall trend is clear—the Union is gradually moving toward creating a strong legal basis for a more competitive policy toward REEs and minerals.
Wider Perspective
To compensate for the emerging legal framework, the EU has also begun looking more actively across the globe, and Central Asia, Latin America, Democratic Republic of the Congo (DRC) feature more actively in Brussels’ calculus to secure supply chains. For the EU’s ambitions to move beyond the reliance on hydrocarbons and increase dependence on green energy, safer supply chains of critical elements and rare earth elements are of increasing importance.
Because the EU has limited geological resources and slow project-development cycles, external partnerships are important. The Commission reports 15 strategic raw-material partnerships with resource-rich countries. These arrangements generally combine geological cooperation, regulatory reform, investment facilitation, infrastructure, environmental standards, skills and efforts to develop local processing. The emphasis on local value creation is important because African, Latin American and Central Asian governments often reject agreements that merely export unprocessed ore. They want refineries, plants, transport infrastructure, employment for the locals, technology transfer and stable revenue. The EU’s offer must therefore be broader than just money in exchange for access to mines; it should also involve creating conditions for local development.
Brussels also announced that, as part of a plan to reduce dependence on China, an updated strategy is being developed. A key element of this is diversification by securing access to alternative sources of critical raw materials in the short, medium, and long term and reaching out to Ukraine, Australia, Canada, Central Asian countries, Chile, and even Greenland.[7]
The EU has even reached out to the United States. Despite the tensions following Trump’s second presidential term, both sides agree that dependence on China renders them vulnerable. Washington and Brussels announced they were working on an agreement to coordinate efforts to extract and secure supplies of rare earth minerals. The expected agreement would include incentives such as minimum prices, which could give an advantage to non-Chinese suppliers. Furthermore, the EU and the United States are reportedly seeking partners from other countries to create a broader alliance to establish new supply chains for critical minerals.[8] The proposal also outlines the idea of exploration of joint projects in the extraction and processing of critical minerals, as well as price support mechanisms. It also recommends protecting EU and U.S. markets from excess external supplies and other forms of market manipulation, and building secure supply chains between the parties, Bloomberg reports.
Relatedly, the EU-Australia free-trade agreement concluded in March 2026 provides greater European access to one of the world’s most important mining territories, while the existing EU-Australia minerals partnership links resource access to investment and processing. Canada, Japan, South Korea, Norway and the United Kingdom also form part of the wider diversification ecosystem.
Central Asia occupies a growing role in this strategy. Kazakhstan and Uzbekistan possess significant mineral potential and are seeking to diversify their external economic relations. For Europe, the region offers not only uranium, copper, rare earths and battery materials but also an opportunity to connect mineral policy to the Trans-Caspian transport corridor. Yet geography remains a constraint: secure access depends on continuous development of railways, ports, customs harmonization and routes that would avoid dependence on Russia or Iran, two heavily sanctioned countries.
For the EU, this geopolitical reality makes the Middle Corridor—a route from the Black Sea to Central Asia—a critical initiative that fits into a wider strategic corridor that can integrate transport, energy, electricity connections, hydrocarbons, and eventually green energy. Yet, there is also the issue of Central Asian minerals. The region has emerged as a key source of vital resources and a battleground between superpowers such as the U.S., China and a slew of Asian and European countries.[9] From Japan and South Korea to the European powers, all now seek access to the region’s resources. Türkiye likewise aims at rare minerals, and given that Ankara wants to position itself as the western gateway for Central Asian countries, it puts special emphasis on trans-Caspian connectivity as a means to attract precious resources. There are also Central Asian hydrocarbons that boost Ankara’s push for the Middle Corridor expansion. The idea of the Middle Corridor has been further boosted by the development of the so-called Trump Corridor, often referred to as TRIPP, which aims to connect Azerbaijan with its exclave of Nakhchivan and therefore will serve as an additional link between the Black Sea and the Caspian basin. Washington and Brussels regard the route as a way to reach the Central Asian minerals.
Africa is equally important. The EU has developed raw-material frameworks with the Democratic Republic of the Congo, Zambia, Namibia and Rwanda and has pursued closer cooperation with South Africa. The Lobito Corridor and related infrastructure illustrate the necessary shift from isolated mining deals to the strategy involving the development of logistics and industry. However, European projects must compete with Chinese companies that frequently offer faster financing and integrated construction packages and are able to tolerate a greater level of political risk.
Latin America provides lithium, copper, niobium and other strategic materials. The EU’s partnerships with Chile and Argentina, the provisional application of the EU-Mercosur agreement from May 2026, and the bloc’s wider trade network give Europe a potentially strong position. The agreement with Mercosur improves access to raw materials and is especially relevant to Brazil’s dominant position in niobium. Yet Europe faces intense competition from Chinese firms embedded in regional mining, electricity, battery and infrastructure sectors.
Constrains
The EU’s diversification effort is, however, a difficult process. Given the fact that other actors likewise strive to diversify their critical mineral supply chains, it will prove challenging for Brussels to be attractive. Whether they are African or Central Asian countries, those are increasingly courted by Russia, China, the United States and others to build partnerships around mineral extraction and production. The EU, therefore, is no longer seen as an exclusive partner in the minerals and REE extraction and processing sphere. The U.S. and China are quicker in their moves to fill in the void.
A further sobering assessment came from the European Court of Auditors in early 2026. Its review concluded that EU efforts to diversify imports had not yet produced sufficient results, while financial, legal and administrative obstacles continued to slow domestic production. Of the 26 critical raw materials relevant to renewable-energy technologies, ten were fully imported. None of the rare earths used in the EU was processed domestically, and ten of the 26 materials were not recycled at all. Relatedly, the IEA estimates that building sufficiently diversified magnet-rare-earth chains outside China would require around $60 billion over a decade.
Mining projects commonly require 10 to 15 years and can take 20 years or more.[10] By November 2025, only 16 of the 27 member states had established the one-stop permitting bodies required by the Act. Appeals, environmental assessments, water rules, protected habitats, administrative capacity and local opposition can all extend timelines beyond the formal limits.
Conclusion
Europe cannot outcompete China and its sprawling industrial ecosystem. It can, however, build a resilient network that combines European processing and recycling with reliable extraction abroad, shared investment among allies and sufficient strategic stocks to absorb shocks. Success in these areas will not, however, mean that the EU will cut its dependence on outside players. Yet what the EU can do is to ensure that dependence is more diversified and therefore much more politically manageable. In the emerging, more chaotic global order where minerals and REEs play an increasingly important role, the ambition to limit dependence on a single external supplier will determine whether the European Union remains an industrial and power projection power or becomes a large and wealthy market but increasingly unable to manufacture the technologies on which its sovereignty depends.
The most likely outcome of the policy the EU now pursues is partial diversification. For instance, the Union can significantly improve its position in lithium processing,[11] battery recycling, selected rare-earth separation, gallium production and permanent magnets. It can use partnerships with Australia, Canada, the United States, Latin America, Africa and Central Asia to broaden its supply chain. It can also reduce demand through more efficient designs, substitution and recycling. However, the 2030 benchmarks are unlikely to be achieved across all strategic materials. Mining projects designated after 2026 will struggle to enter production before the deadline. Processing plants may face shortages, while recycling facilities may lack sufficient end-of-life material. More importantly, China is likely to retain, if not a dominant position, then certainly an important one in the minerals and REEs industry in the coming years and perhaps even decades. China has cash and a governance model for quicker political decisions to attract African and Asian countries. Moreover, China also boasts engineering and industrial capabilities with the potential of implementing megaprojects in short time spans.
[1] “The EU’s hunt for critical minerals,” Reuters, December 18, 2023, https://www.reuters.com/markets/commodities/eus-hunt-critical-minerals-2023-12-18/.
[2] “Critical and strategic raw materials,” SGU, September 17, 2024, https://www.sgu.se/en/mineral-resources/critical-raw-materials/.
[3] Julia Payne and Pratima Desai, “EU shortlists tungsten, rare earths for first stockpile to curb reliance on China,” Reuters, May 20, 2026, https://www.reuters.com/world/china/eu-shortlists-tungsten-rare-earths-first-stockpile-curb-china-reliance-2026-05-20/.
[4] “Green light given to Metlen gallium production plan,” ekathimerini.com, May 15, 2026, https://www.ekathimerini.com/economy/1303818/green-light-given-to-metlen-gallium-production-plan/.
[5] European Commission, “RESourceEU Action Plan,” December 3, 2025, https://single-market-economy.ec.europa.eu/document/download/01c448d6-dc93-40d7-9afe-4c2af448d00c_en.
[6] https://russiancouncil.ru/analytics-and-comments/analytics/konkurentsiya-rossii-ssha-kitaya-i-es-na-rynke-kriticheskikh-mineralov-dlya-sektora-ikt/.
[7] Evelyn Ann-Marie Dom and EBU, “The European Union is seeking to end its dependence on China for rare earth metals,” EuroNews, October 25, 2025, https://ru.euronews.com/my-europe/2025/10/25/eu-china-rare-materials.
[8] “EU, US Near Critical Minerals Deal to Combat Chinese Control,” Bloomberg, April 10, 2026, https://www.bloomberg.com/news/articles/2026-04-10/eu-and-us-near-critical-minerals-deal-to-combat-chinese-control?srnd=phx-politics
[9] Otabek Akromov, “From Margins to the Core: The Rise of Central Asia in the Race for Critical Minerals?,” The Hague Research Institute, October 2025, https://hagueresearch.org/from-margins-to-the-core-the-rise-of-central-asia-in-the-race-for-critical-minerals/.
[10] “Swedish Parliament opens door to uranium mining,” Mining Metal news.com, June 18, 2026, https://www.miningmetalnews.com/20260618/3457/swedish-parliament-opens-door-uranium-mining
[11] André Månberger, Oscar Gustafsson, and Björn Nykvist, “Securing European lithium: assessing future demand, primary supply, trade and the role of recycling,” npj Materials Sustainability 4, (2026), https://www.nature.com/articles/s44296-026-00114-x
