European states are actively working on modernizing their armed forces in response to increasing geopolitical threats, particularly aggression from the Russian Federation. However, the implementation of defense programs is complicated by a severe shortage of rare earth metals, which are crucial for the production of modern high-tech weapons. A significant portion of these resources is intercepted by companies from the United States, which operate more quickly and efficiently in the international market.
This is reported by Business • Media
Competition for Critical Minerals and China’s Influence
Despite a slight easing of trade tensions between the U.S. and China, Beijing continues to strictly control the export of rare earth elements. China not only imposes strict quotas but also effectively restricts sales of minerals to companies involved in the military industry. This increases the value of stocks located outside of China and stimulates even more intense competition among Western defense manufacturers.
“Shipping a batch to Europeans can take three to four weeks, while for Americans it is more like three to four days.”
American companies, leveraging financial advantages and influence over suppliers, obtain the necessary resources significantly faster than their European competitors. Meanwhile, European firms are forced to wait for the delivery of rare earth metals for up to a month, which negatively impacts the pace of rearmament of their armies.
European Strategy to Reduce Dependence on China
Rare earth elements are also found within Europe; however, the processing of ore in the region has been handed over to China due to the complexity of the technological process and environmental risks. As a result, many EU countries currently lack the appropriate infrastructure and experience for independent processing of such materials.
To overcome dependence on Chinese supplies, the European Union approved the Critical Raw Materials Act last year. In addition, a presentation of the RESourceEU initiative is planned soon, which aims to develop internal supply chains and establish strategic partnerships with countries that possess stocks of critical minerals outside the EU. For example, Germany is negotiating with Canada on the possibility of joint investments in the extraction and processing of rare earth metals on the North American continent.
Thus, the issue of stable access to rare earth metals is becoming one of the key factors in strengthening the defense capabilities of European countries and ensuring their strategic autonomy.