Rare earth question: Europe wants to break free from dependence on China, but it will take years
The EU has devoted all its efforts to combating its dependence on China for raw materials, but experts doubt the quick success of this fight.
The EU's Critical Raw Materials Act (CRMA) recently entered into force. Its stated goal is to reduce dependence on China for critical raw materials such as lithium, phosphorus, and bauxite, as well as rare earth metals such as niobium.
According to the new law, at least 10% of the EU's annual consumption of critical raw materials must be produced within the EU by 2030. Currently, this figure is only 3%. The EU must also account for at least 40% of processing capacity and 15% of recycling capacity.
Currently, according to the European Commission, all rare earth metals required by EU member states are imported from China, which dominates this market, being one of the few countries with a complete supply chain for rare earth metals, from mining to end consumer.
Beijing's influence is seen by many in Europe as a threat, but there's little escape for now. To achieve their new goals, EU members must develop their mining industries. For example, Europe's first lithium plant in the German state of Saxony-Anhalt will mine, process, and purify lithium for battery production.
The problem is that extracting this critical raw material takes time and money. "On average, it takes 17 years to develop a lithium mine from discovery to production," explains S&P Global Commodity Insights analyst Alice Yu.
In many ways, it is the circumstances of the current dependence on Chinese supplies and the inability to quickly diversify them that explain the conciliatory rhetoric of European officials towards China. In particular, at the Shangri-La Dialogue forum in Singapore, European Commissioner Borel “did not find” evidence of Chinese military supplies to Russia, although Western media have been writing about this for several months.
Rare Earth Issue: Europe Wants to Break Free from China's Dependence, But It Will Take Years