Europe Seeks Rare Earths Control

Europe's High-Stakes Gambit to Break China's Stranglehold on Critical Metals

A collection of seventeen obscure metals powers our modern world. These rare earth elements are the secret ingredients in smartphones, the magnets in electric vehicle motors, and the core components of turbines for wind energy and advanced medical scanners. Their unique properties make them indispensable for the world's economy's green and digital revolutions. Despite their name, these metals are not exceptionally scarce in the Earth's crust. However, finding them in concentrations that are economical to mine is another matter entirely. The true challenge, and where global power dynamics come into play, lies in the complex process of separating and refining them into the high-purity materials that industry demands.

A Continent's Deep Dependence

Europe awakens to a stark reality: its technological ambitions and economic security are profoundly dependent on one external source. China currently dominates every phase of the rare earth supply chain. The country is responsible for approximately seventy percent of global mining and a staggering ninety percent of the intricate refining and processing. This quasi-monopoly was not an accident. The situation is a consequence of decades of strategic industrial policy and state backing from the government of China. For Europe, this over-reliance represents a critical vulnerability, exposing its most vital industries to potential supply disruptions, price volatility, and geopolitical leverage.

The French Frontline at La Rochelle

On the west coast of France, an industrial facility in the town of La Rochelle has processed these elements for nearly 80 years. Now, this facility, operated by the Belgian chemical firm Solvay, finds itself central to Europe's strategic ambitions. The firm Solvay is increasing the capacity of its operations alongside the Atlantic, positioning the plant as a cornerstone of the continent's drive for greater self-sufficiency. The expansion, which has backing from the government of France, is not just about increasing capacity. It represents a significant pivot, moving to meet a boom in demand for the high-performance magnets which are crucial for Europe's future.

Image Credit - BBC

From Catalytic Converters to Powerful Magnets

The Solvay facility is undergoing a fundamental transformation. For years, its primary focus was providing rare earths needed for catalytic converters in traditional combustion-engine vehicles. Now, a new production line inaugurated in 2025 is dedicated to producing neodymium and praseodymium. These elements are essential for the permanent magnets required by electric vehicle motors, turbines for wind energy, and sophisticated defence systems. This strategic shift directly addresses the most critical segment within the rare earth market, aligning the plant's future with the EU's green and technological goals. The investment aims to build a European alternative to the current supply chain, which is almost entirely sourced from China.

The Intricate Art of Separation

Turning raw ore into pure, usable critical minerals is a dauntingly complex task. The facility at La Rochelle, the sole operation beyond China's borders capable of separating all 17 elements, employs a closely guarded process developed from the time it opened in 1948. This involves approximately 1,500 distinct stages. Florian Gouneau, who manages production, likens the process to separating a mixed fruit juice into its individual components—isolating orange, apple, and pineapple from each other. Inside a room comparable in area to a soccer field, rows of enormous vats facilitate the chemical reactions that compel the separation of various metals. The proprietary knowledge involved is a strategic asset, fiercely protected from industrial espionage.

A Legislative Push for Autonomy

In response to growing geopolitical risks, the European Union has moved decisively. The European Critical Raw Materials Act (CRMA), which entered into force in May 2024, establishes a clear framework for reducing the bloc's import dependencies. It sets ambitious benchmarks to be achieved by 2030. The EU aims to extract 10% of its annual consumption of strategic raw materials, handle 40% of processing domestically, and source 25% from recycling. Crucially, the act also stipulates that no more than 65% of the annual need for any single strategic material should originate from a single third country, a direct measure to diversify away from Chinese dominance.

The Wake-Up Call for Supply Chains

Recent global crises have laid bare the fragility of extended supply chains. The global health crisis and the conflict in Ukraine served as powerful catalysts, forcing political leaders and corporations to confront their vulnerabilities. Philippe Kehren, the chief executive of Solvay, notes that these events have created an increased need for more compact, more resilient supply networks. When a critical material comes almost exclusively originating from a single place, the desire to diversify sourcing becomes an urgent strategic imperative. The CRMA is the political manifestation of this lesson, aiming to de-risk the supply chains that underpin Europe's most important industries.

Streamlining the Path to Production

Recognising that ambition must be matched with action, the CRMA introduces measures to accelerate the development of domestic capacity. The act allows certain ventures to be designated as "Strategic Projects." This status grants them access to streamlined and faster permitting processes, a critical bottleneck that has historically hampered mining projects in Europe. Under the new rules, permits for strategic mining projects should be issued within a maximum of 27 months, while facilities for the recycling and processing are to be permitted within 15 months. This dramatically shortens timelines that could previously stretch for over a decade.

Forging New Global Partnerships

While building domestic capacity is a central pillar of its strategy, the EU understands it cannot achieve independence alone. The Critical Raw Materials Act also emphasises the need to build a network of reliable international partners. The bloc is actively developing "Strategic Partnerships" with resource-rich countries that share its commitment to sustainable and reliable supply chains. This diplomatic outreach aims to diversify import sources and foster mutually beneficial economic development. Recent trade deals with nations in South America, alongside strengthened ties with countries like Australia and Canada, are central to this global strategy.

Mining Europe's Urban Landscapes

A significant part of Europe's future rare earth supply may not lie deep underground, but in the continent's own waste streams. The CRMA's target of sourcing 25% of strategic materials from recycled sources by 2030 is driving a focus on "urban mining." This involves recovering valuable elements from end-of-life products such as discarded smartphones, computer hard drives, and electric motors. Philippe Kehren, Solvay's chief executive, suggests that recycling alone could potentially meet up to thirty percent of all rare earth elements Europe needs. This approach not only reduces import dependency but also promotes a circular economy and lessens the environmental impact of extraction.

The Promise of a Circular Economy

The push toward a circular economy for these elements offers multiple benefits. It directly tackles the challenge of sourcing materials by creating a domestic supply from products already in circulation. This reduces the need for new mining, which is often energy-intensive and environmentally disruptive. Furthermore, it addresses the growing problem of electronic waste. By investing in advanced recycling infrastructure and technologies, Europe can transform a liability into a strategic asset. Achieving the ambitious 25% recycling target will require significant investment and innovation but is a key component of a resilient and sustainable industrial strategy.

Waking a Sleeping Giant in Sweden

In the Arctic region of Sweden, Europe's most promising domestic source of these elements has been identified. Near the iron ore mining town of Kiruna, the state-owned company LKAB has discovered the Per Geijer deposit, Europe's largest known concentration of these critical minerals. As of early 2025, exploration results showed the deposit contains at least 2.2 million tonnes of rare earth oxides. This discovery is a potential game-changer for European self-sufficiency. However, the road from discovery to production is long. LKAB is proceeding with applications for concessions and permits but anticipates it could still be a decade or more before mining operations can begin.

Norway's Volcanic Treasure

Norway is home to another major discovery that boosts Europe's hopes for domestic extraction. In June 2024, the company Rare Earths Norway announced that the Fen Carbonatite Complex in the country's southeast is continental Europe's largest deposit. The site, the remains of an ancient volcano, is estimated to hold 8.8 million tonnes of total rare earth oxides, including 1.5 million tonnes of the highly sought-after magnet-related metals. The company is moving forward with plans for a pilot factory and further drilling to assess the economic viability, aiming to employ sustainable techniques for the processing and mining to minimise its environmental footprint.

The Long and Winding Road to Extraction

Despite the excitement surrounding the discoveries in Sweden and Norway, a hard reality remains: it will be many years before these mines contribute to Europe's supply. The process of securing environmental permits, completing feasibility studies, raising capital, and constructing the necessary infrastructure is incredibly lengthy and complex. Industry experts and the mining companies themselves caution that a timeline of 10 to 15 years from discovery to first ore is typical. This long lead time underscores the urgency of the EU's parallel strategies of boosting recycling and securing diverse international partners to bridge the gap.

The Geopolitical Chessboard

China's dominance within the rare earths industry gives it significant geopolitical leverage. In recent years, Beijing has demonstrated its willingness to use this advantage. As part of its escalating trade dispute with the United States, China implemented new export controls on rare earths and related products in 2025. These measures require special licenses for exporting specific elements and magnets, creating uncertainty and disrupting supply chains for industries worldwide. These actions are not isolated; they follow similar controls placed on other critical materials like gallium and germanium, signalling a clear strategy of using mineral supply as a tool of statecraft.

A Question of Sovereign Right

Officials in Beijing defend their export controls as a matter of national security and sovereign right. They argue it is common practice for countries to regulate the export of dual-use products with commercial and also military applications. During a trip to Germany, Wang Yi, China's foreign minister, framed the policy in these terms. However, members of the European Parliament and other international bodies have described the controls as "unjustified" and "coercive." This fundamental disagreement is central to the current tensions, highlighting the clash between national interest and the principles of free and fair global trade.

The High Cost of Independence

Building a secure European supply chain for rare earths will not be cheap. Chinese producers benefit from lower labour costs, less stringent environmental regulations, and decades of direct state subsidies. To compete, European companies assert that they need significant government support. This includes financial backing through tax credits and grants, like the €20m provided to Solvay by France's government, and also robust public-private partnerships. The challenge is creating a market where European-produced rare earths can compete on a level playing field, even if their production costs are initially higher.

Confronting the Environmental Legacy

A primary reason China was able to forge its dominant position within the rare earths market was its past willingness to accept the significant environmental costs associated with their processing and mining. The extraction process can involve radioactive materials and the use of large quantities of hazardous chemicals, leading to substantial pollution if not managed correctly. As Europe looks to build its own capacity, it is doing so under a much stricter environmental framework. This commitment to sustainability is non-negotiable but adds complexity and cost to domestic projects.

The Search for Greener Processing

European firms are betting that technological innovation and a commitment to sustainability can become a competitive advantage. Solvay's leadership, for example, insists that solutions exist to process these elements responsibly without causing pollution. The company is reinventing its processes at the La Rochelle facility with the goal of reducing CO2 emissions by 40% and water consumption by 50% by 2030. This focus on green technology is central to the European approach. The challenge, as Philippe Kehren, Solvay's chief executive, admits, is that these responsible methods cost more, and the market must be prepared to afford a "green premium."

Global Players Diversify the Field

The race to build non-Chinese rare earth supply chains is a global one. The Australian company Viridis Mining, for instance, is creating a large-scale mining operation inside Brazil with the potential to supply up to five percent of the globe's needs. Rafael Moreno, the chief executive for Viridis, echoes the sentiment of his European counterparts, stating that government support—both financial and regulatory—is currently the most crucial factor to getting these vital projects off the ground. These efforts show that a multi-polar supply map is beginning to emerge, with new strategic hubs developing in the Americas and Australia.

A Call for Customer Commitment

Ultimately, the success of Europe's ambitious strategy may rest in the hands of big industry. The leaders of companies like Solvay are clear: they can invest and build capacity, but they need firm commitments from their customers. Carmakers, technology giants, and manufacturers of wind turbines must be willing to sign long-term contracts to buy European-sourced rare earths, even if the price is higher than the Chinese alternative. An Nuyttens, a president at Solvay, put it bluntly, stating that these stakeholders "will make this happen or not." Without guaranteed demand, large-scale investment remains a risky proposition.

A Decade of Defining Transformation

Europe has embarked on a long and arduous journey toward strategic autonomy in essential raw materials. The path is fraught with challenges—economic, environmental, and political. The continent must simultaneously build new mines, innovate in recycling, forge global partnerships, and convince its own industries to invest in a more secure, but more expensive, future. The legislative framework is now in place, and major projects are slowly moving forward. The success or failure of this high-stakes gambit over the next decade will profoundly shape Europe's industrial landscape and its position for the world's economy for generations to come.