On Saturday, Ursula von der Leyen, President of the European Commission, stated that the European Union is considering all options to address the threat posed by China’s control over rare earths and other crucial minerals. She also announced a new EU resource plan, “RESourceEU,” aimed at reducing the EU’s dependency on China for key raw materials.
At the “Berlin Global Dialogue” conference held on Saturday, von der Leyen issued a warning about China’s weaponization of rare earths and other critical materials. She noted that the mutual dependency in trade relations is being exploited and weaponized at an accelerating pace.
“In recent weeks and months, China has significantly tightened its export controls on rare earths and battery materials,” she said. “At least to some extent, this is part of the broader economic friction between the US and China, but it has had a major impact on Europe.”
“We all know how crucial rare earths are for our industries – be it in cars, semiconductors, or military equipment,” von der Leyen stated, emphasizing the risks posed to the EU by the Chinese government’s decision to expand rare earth export controls on October 9.
“This threatens the stability of global supply chains and will have a direct impact on European businesses,” she said. The fact that 90% of the EU’s consumption of rare earth magnets comes from imports from China reflects the risks faced by Europe and its most strategically significant industrial sectors, from automobiles to industrial machinery, from defense to aerospace, from AI chips to data centers.
Saturday’s speech marked von der Leyen’s most explicit stance since China announced the expansion of restrictions on rare earth exports earlier this month. She mentioned that in the short term, the EU will work with China to find solutions, but is prepared to utilize all tools available if necessary. The EU will collaborate with its Group of Seven (G7) partners to adopt a coordinated response.
This indicates that the EU may also resort to its most powerful trade tool, the “anti-coercion tool.” Just a few days ago, French President Macron urged EU leaders to consider using such measures if a solution to China’s restrictions on key raw material exports cannot be found.
The EU and Beijing will hold talks next week to discuss export control issues.
China controls 70% of global rare earth mining and 90% of rare earth processing. In recent years, rare earths have become an important secret weapon for Beijing in diplomacy.
In her speech on Saturday, von der Leyen said that the “cooperative world order” that has been anticipated for the past 25 years is being replaced by a confrontational global economy, where “technology theft, hostile investments, export controls, subsidies are no longer the exception.”
She stressed that the EU’s response measures must be commensurate with the scale of risks faced by the EU in this area. To reduce the EU’s excessive dependence on China for key material imports and refining, the European Commission will propose a new EU resource plan, “RESourceEU,” modeled after the “REPowerEU” plan that helped the EU overcome energy crises.
The “RESourceEU” plan aims to ensure alternative sources of key raw materials for European industries in the short, medium, and long term. It will focus on the circular economy, aiming to recycle and reuse critical raw materials already present in products sold in Europe. Some companies can recycle up to 95% of key battery raw materials.
“We will focus on various aspects from joint procurement to reserves,” she said. “We will increase investments in strategic projects for European key material production and processing. We will accelerate the establishment of key material partnerships with countries and regions such as Ukraine, Australia, Canada, Kazakhstan, Uzbekistan, Chile, or Greenland. We will also invest in projects globally beneficial to Europe through the ‘Global Gateway’ program.”
She also added, “We are advancing the ‘European Manufacturing’ strategy, focusing on areas crucial for our economy and national security.”