EU seeks rare earth independence as China export controls loom
European leaders are urgently seeking to reduce dependence on Chinese rare earths as export restrictions threaten global manufacturing. Australian firm Viridis Mining aims to supply the EU by 2028, while EU trade commissioner Maroš Šefčovič visits Beijing to prevent a trade war amid a daily €1bn deficit.
Key points
- China controls 80-90% of global rare earth raw materials and processed products, creating significant leverage over Western manufacturing.
- Viridis Mining, an Australian-listed company, plans to begin supplying the EU with rare earths by late 2028, targeting a 5% global market share in precious magnets.
- EU trade commissioner Maroš Šefčovič is traveling to Beijing on October 8 to meet Chinese commerce minister Wang Wentao to avoid a trade war.
- The EU faces a trade deficit with China running at €1bn per day, driven by imports of electric vehicles, cars, and renewable energy machinery.
- China suspended stricter global rare earth export restrictions in October 2025 for 12 months, but the extension of this suspension remains uncertain ahead of the Trump-Xi summit.
Background
Previous efforts to diversify critical mineral supplies include US funding for Australian scandium and rare earth projects, such as the $400 million loan to Sunrise Energy Metals for the Syerston Scandium Project. These initiatives aim to secure Western supply chains for defense, aerospace, and technology sectors amid ongoing Chinese export controls. Recent diplomatic talks between US and Chinese officials in New York also highlighted rare earths as a key issue in trade negotiations.
Why it matters
China's dominance in rare earths poses a strategic risk to European and US industries, including automotive, wind energy, and defense. Disruptions in supply could halt production of critical technologies, making diversification essential for economic security and geopolitical stability.
What to watch
The outcome of the Trump-Xi summit and Šefčovič's Beijing visit will determine whether China extends its suspension on rare earth export restrictions. Viridis Mining aims to commence production by late 2028, while the EU continues to seek alternative supply sources to mitigate its trade deficit and reduce reliance on Chinese imports.
- China’s stranglehold on rare earths must be ended, says hopeful supplier to EU | Critical minerals The Guardian
- China Rare-Earth Magnet Exports to US Drop Before Xi-Trump Meet Bloomberg.com
- China’s trade limits continue to bite into Japan’s rare earth imports South China Morning Post
- US invests in critical minerals but China maintains grip reuters.com
- REalloys and JS Link Unite to Challenge China's Rare Earth Magnet Dominance with North American Platform - Earnings Per Share careplusvn.com
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