European officials warned that China has almost complete control over the global rare earth supply, leading to a “shocking” strategic dependency risk for Europe. Stéphane Séjourné, the director of industry affairs in the European Union, criticized the export permit requirements imposed by the Chinese Communist Party on European companies as akin to “extortion,” calling on the EU to “double down” on efforts to break through the supply bottleneck.
On Tuesday, November 25th, Séjourné addressed the European Parliament in Strasbourg, stating that the rare earth export restrictions introduced by the Chinese authorities in April and October “directly target Europe.”
He pointed out that Beijing demands companies to provide sensitive information, including “trade secrets,” as a condition for issuing export permits, a practice he likened to “racketeering.”
“The issuance of these permits is conditioned on companies providing information, often including trade secrets, which is particularly worrisome. When considering everything our manufacturers are required to provide in order to obtain these permits, these demands appear extortionate,” Séjourné said.
“Now is a crucial moment for Europe to step up its efforts. To reduce our dependency on China, Europe must redouble its efforts,” Séjourné told European lawmakers.
Séjourné also noted that export permits are still being issued “in dribs and drabs,” posing supply delay risks for the European automotive and energy industries.
China controls approximately 60% to 70% of global rare earth mining and 90% of refining capacity, elements crucial for industries such as automotive, electronics, energy, and military technology.
In October, Beijing further expanded export restrictions, not only extending the list of restricted elements to 12, but also including technology, proprietary knowledge, and foreign-made products containing trace amounts of Chinese rare earths within the scope of restrictions. Despite announcing a one-year suspension of measures following negotiations with the US, the restrictions from April remain in effect.
“The price of independence is high but lower than the cost of dependence,” Séjourné said. “It is not too late to act now, but time is ticking.”
The European Commission is expected to announce a comprehensive plan called “RESourceEU” next Wednesday, December 3rd, aiming to coordinate joint procurement, stockpiling, and recycling to achieve critical mineral autonomy.
Under the “RESourceEU” plan, the EU will establish a “European Centre for Critical Raw Materials” modeled after Japan’s government-owned JOGMEC, serving as a hub for coordinating demand assessments and inventory management to enable joint procurement and domestic stockpiling of critical minerals.
The EU plans to accelerate internal production and refining within Europe, as well as strengthen the recycling capabilities of rare earth-related products.
Séjourné stated, “Speeding up the recycling of these materials is crucial. These substances flow out of the EU too easily. They are transported elsewhere for recycling and then brought back. We must do better to ensure circularity and keep these materials within the EU.”
According to the Critical Raw Materials Act that came into effect last year, the EU aims to have 25% of critical mineral demand met through recycling by 2030. Currently, this ratio is less than 1%.
To address the challenges of developing new mines taking 10 to 30 years, the EU is actively pursuing partnerships with countries in Africa, South America, and Southeast Asia to diversify the supply chain.
European Commission President Ursula von der Leyen recently signed a “Clean Trade and Investment Partnership” agreement with South Africa, committing to provide €750 million in investment to jointly develop the country’s critical minerals.
The EU also plans to support mineral-rich countries in conducting “on-site processing” rather than just being mineral-exporting nations. Séjourné believes that such collaboration will lead to a “win-win” situation.