China has long dominated global production of rare earth metals, but a recent announcement by European Commission President, Ursula von der Leyen is set to shake things up.
Rare earth metals are a group of 17 chemical elements that are crucial to the production of high tech consumer products, such as smartphones, televisions and computers. Zoom out, and the bigger picture will show they’re required for production of clean energy, electric and hybrid vehicles and defence equipment.
The Critical Raw Materials Act announced in von der Leyen’s annual State of the Union address will support more resilient supply chains, and build a robust reserve for when supply is at risk. Ultimately, Europe’s dependency on China will be drastically reduced.
This isn’t the first time there have been rumblings about resilience and autonomy in rare earth metals production, but it is the first time that a solid approach to achieving these has been outlined.
Von der Leyen pointed to dependency on oil and gas suppliers as motivator for achieving autonomy, suggesting that rare earth metals will soon be more important than both. To avoid repeating history, the newly introduced European Critical Raw Materials Act would analyse actions, from extraction to refining and processing to recycling, to identify opportunity for sustainable growth.
Without mentioning China, von der Leyen made it obvious that the aim of the game was to reduce the China’s market dominance. Approximately 90% of rare earth metals deemed by the European Commission to be critical, are currently mined by China.