The Chief Executive of EIT RawMaterials, a key mineral organization funded by the European Union, industry expert Bernd Schaefer, has stated that Europe must establish its own special metal and rare earth pricing system to reduce dependence on China and unleash investment potential in mining and processing sectors.
Currently, China dominates the supply chain of various critical minerals such as rare earths and sets prices through its opaque domestic market.
Schaefer, in an interview with Reuters on Wednesday (May 20), stated that this lack of transparent standards makes it difficult for Western developers to make investment decisions and has led to delays in some higher-cost projects in Europe.
To address the issue of pricing being controlled by others, EIT RawMaterials is collaborating with the digital platform Metalshub to develop a “European index” aimed at providing transparent, market-based price benchmarks for critical minerals traded outside China.
Schaefer pointed out that this could provide clear profit signals for investors and support financing for new projects.
He emphasized in the interview, “What we get from China is not representative, nor is it the real price from a strict microeconomic perspective.”
He further warned that without establishing local processing capabilities and transparent pricing, Europe’s significant resources invested in mineral extraction may ultimately “flow directly back to China’s supply chain.”
This action aligns with the recent trend of strengthened strategic cooperation between the US and Europe.
The United States and the European Union reached an agreement at the end of April this year to jointly coordinate ensuring the security of critical minerals and strengthening supply chains with the goal of reducing reliance on China in rare earths and permanent magnets. The agreement plans to include adjustments to price baselines, price gap subsidies, and other trade measures.
The EU has set a goal of achieving a self-sufficiency rate of 10% for strategic raw materials each year by 2030, and annual dependence on a single third country should not exceed 65%.
The EU announced a €30 billion action plan called “RESourceEU” at the end of last year to accelerate supply chain diversification, but concrete actions are still relatively slow. Only pilot joint stockpile plans led by Italy, France, and Germany have been implemented, including metals such as tungsten and gallium.
Schaefer believes that this new pricing index can extend beyond Europe and potentially collaborate with trading partners such as the US, Australia, Canada, or the UK in the future.