EU to Frees Billions in Bid to Reduce China Rare Earth Reliance

13 hours ago 1

December 4, 2025 | 02:35 pm

TEMPO.CO, Jakarta - The EU's executive on Wednesday announced new policies looking to coordinate the purchase and stockpiling of raw materials like the rare earth minerals crucial for the automotive, electronics and defense industries.

The European Commission also said it would employ tougher economic policies with trade partners to better secure rare earths supplies.

"The EU will also be more strategic in leveraging its economic weight and the access to its Single Market," the Commission said.

Existing measures the Commission plans to use independently of their original purpose to strengthen economic security could include anti-dumping duties, measures against takeovers of European companies from abroad or the exclusion of companies from third countries from public contracts.

China tightens screws

China, the world's main supplier of rare earths responsible for more than two-thirds of production as of 2023, announced new controls on exports in October.

This rattled markets and disrupted supply chains until Beijing later said it would suspend the measures for one year. It had already imposed stricter export licenses for certain materials in April.

The European-Chinese dispute over the chip manufacturer Nexperia also caused concern in German industry, as it affected the country's key automobile sector.

"Europe is responding to the new global geopolitical reality," EU industry chief Stephane Sejourne said of the plans aimed at countering what he has likened to a raw earths "racket" run by Beijing.

US secures supplies, other options limited

The Trump administration — pushing to secure its own supplies with a series of bilateral trade deals, with demand far outstripping production despite the US being the second-largest producer worldwide — has put further strain on European acquisitions.

Other major producers like Myanmar, Australia, India, Russia, Brazil and Vietnam tend to be far removed from Europe, to have difficult relations with the EU, or both.

"Economic security is fundamental to Europe's security. When access to the critical raw materials we need for our defence is cut off, over-dependencies become physically dangerous," the EU's foreign policy commissioner Kaja Kallas said. "Today we adopt a new strategy to reduce these dependencies by diversifying our supply chains while remaining open to trade with partners."

EU also looking to locate reserves and increase its own production

The European Commission said the strategic fund of nearly €3 billion (roughly $3.5 billion) would also help fund strategic projects in mining, refining and recycling of the vital minerals and metals — both within Europe and in partner countries.

The fund is separate from money spent by individual member states, with Germany for instance earmarking €1 billion for rare earth projects between 2024 and 2028.

Rare earth deposits, or at least promising sites for exploration, have been identified in several parts of Europe, not least in remote and sparsely populated Scandinavia, for instance around the vast iron ore mine in Kiruna in Sweden.

Read: Is Indonesia Really Sitting on a Rare Earth Minerals Goldmine?

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Is Indonesia Really Sitting on a Rare Earth Minerals Goldmine?

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