China’s Rare Earth Threat: Europe Struggles to Cut Reliance on Imports to Boost Its ‚Strategic Autonomy‘

Written by | Wednesday, October 7th, 2020

The European Commission has launched a fresh attempt at securing access to minerals like lithium and rare earth elements, stressing that those will be critical to underpin Europe’s growth in digital and green industries. To boost Europe’s „strategic autonomy“, the EU executive’s strategy ultimately aims to develop a full value-chain for critical raw materials on the continent – ranging from extraction to processing and waste recovery. This renewed drive for „strategic autonomy“ emerged when COVID-19 hit Europe earlier this year and disrupted global supply chains, which made Brussels come to a sobering realisation that it simply cannot continue to rely solely on imports for raw materials. “[The pandemic] has revealed the EU’s problematic dependence on third countries for active pharmaceutical ingredients and medical supplies,” said Anna-Michelle Asimakopoulou, a Greek MEP in the European Parliament.
Many EU leaders are increasingly worried that the raw materials necessary for the green and digital transitions are sourced mostly from other regions that are chronically unstable and countries that are far from being Europe’s trusted allies. “… we are increasingly reliant on China and other regions for supplying the metals and minerals required by those technologies,” Asimakopoulou said, urging the EU executive to defend EU industries against Chinese dumping and America’s “out-of-control tariff diplomacy” under President Trump. The wake-up call reverberated across the EU institutions in Brussels and beyond. Thierry Breton, the EU’s internal market commissioner, agrees: “We need to think more strategically to anticipate other possible disruptions in future.” Speaking at a recent Brussels event to mark the launch of the industry-led European Raw Materials Alliance, Breton advocated for Europe to boost its “own domestic capacity for primary raw materials” as well as secondary materials obtained through recycling and re-use. However, he also warned that “it is not sufficient to have the raw materials if we do not have the processing facilities in Europe.”
Europe is currently heavily reliant on imported raw materials from a small number of foreign countries: China provides 98% of the EU’s rare earth elements, while Turkey supplies 98% of the bloc’s borate and South Africa covers 71% of the EU’s needs for platinum. But, according to Breton, the good news is that „there are also many of these materials present in Europe,“ namely reserves of cobalt, bauxite, beryllium, bismuth, gallium, germanium, indium, niobium and borate. Hence Europe is faced with the pressing need of quickly developing its own mining, refining and recycling capacities while trying to cut its dependency on imports while it does so. When it comes to lithium, for example, Breton said the EU is positioning itself to be almost self-sufficient by 2025, while for rare earths, the process will likely be much longer. The Commission aims to have European mining and refining capacity operational by the start of the next decade. In the meantime, that means ensuring “diversified and undistorted access to global markets for sustainably sourced raw materials,” Breton said.

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