EU Warns Critical Raw Materials Race Is Now a Strategic Power Contest

The global race for critical raw materials has become a contest over power, industrial capacity, and geopolitical influence, according to a senior European Commission official. Speaking at the EIT RawMaterials Summit in Brussels, Koen Doens, director-general of the Commission’s department for international partnerships, said that control over extraction, refining, processing, transport, standards, financing, and manufacturing will increasingly determine economic resilience.

His remarks reflect a growing concern in Brussels: Europe’s clean energy transition depends on materials whose supply chains are highly concentrated outside the bloc, particularly in China. Lithium, cobalt, nickel, graphite, gallium, boron, rare earth elements, and tungsten are all important to technologies central to decarbonization, including batteries, electric vehicles, solar panels, wind turbines, power electronics, and grid infrastructure.

For the EU, the issue is no longer only whether it can buy enough minerals. The larger question is whether it can build supply chains that are secure, transparent, sustainable, and resilient enough to support its climate and industrial goals.

Clean Technologies Depend on Concentrated Supply Chains

Critical raw materials are central to the net-zero transition. Lithium, cobalt, and nickel are used in batteries. Gallium is used in solar technologies. Boron is used in wind power applications. Tungsten and titanium are important for aerospace and defence. Rare earth elements are essential for permanent magnets used in electric motors and wind turbines.

The European Commission has warned that Europe’s climate and digital objectives require stronger sourcing, processing, and recycling capacity inside the EU, as well as more reliable international partnerships. Under the European Critical Raw Materials Act, the bloc aims by 2030 to extract at least 10% of its annual needs for strategic raw materials within the EU, process at least 40%, and source at least 25% from recycling. The legislation also states that no more than 65% of the EU’s annual consumption of any strategic raw material at any relevant processing stage should come from a single third country.

These targets highlight the scale of the challenge. The EU remains heavily dependent on imported materials and on processing capacity located abroad. The Commission notes that 97% of the EU’s magnesium supply is sourced from China, while 100% of rare earths used for permanent magnets are refined in China.

China’s Dominance Raises Supply Risk

Doens’ warning follows mounting concern that mineral supply chains could become a strategic vulnerability for Europe, similar to the role that fossil fuel dependence played in past energy crises. Euronews reported that China accounts for around 60% of global production of critical raw materials and 90% of refining capacity, while the EU is highly dependent on Beijing for rare earth magnets and other materials.

This concentration matters because minerals are not only commodities. They are inputs for industrial competitiveness, national security, clean energy manufacturing, and technological sovereignty. If one country dominates refining, processing, pricing, or export flows, downstream industries can face sudden shortages, price shocks, or investment uncertainty.

Recent export restrictions on selected minerals have reinforced these concerns. For manufacturers of electric vehicles, batteries, wind turbines, semiconductors, and advanced electronics, supply instability can delay production, increase costs, and complicate long-term procurement planning.

EU Moves Toward Stockpiling and Partnerships

The EU is now trying to reduce exposure through a combination of domestic capacity building, international partnerships, recycling, and strategic stockpiling. Reuters reported that the bloc has shortlisted tungsten, rare earths, and gallium for its first joint stockpile of critical minerals, with magnesium, germanium, and graphite also under consideration. The initiative is intended to reduce reliance on China and protect sectors including defence, semiconductors, transport, and renewable energy.

The EU has also built strategic partnerships with countries including the Democratic Republic of Congo, South Africa, the United States, and Zambia. These agreements are part of a broader effort to secure access to raw materials while supporting infrastructure and value chain development in partner countries.

However, access to mines alone will not solve the problem. Doens warned that Europe cannot limit its ambition to securing raw material deposits while others dominate refining, processing, manufacturing, and technology. For the EU, the objective is increasingly to develop full value chains from mine to market.

Pricing, Processing, and Investment Remain Barriers

A major obstacle is the lack of transparent pricing for some specialty metals and rare earths. EIT RawMaterials CEO Bernd Schaefer told Reuters that Europe needs its own pricing system to reduce dependence on China’s opaque domestic markets and to support investment in mining, refining, and recycling projects. Without reliable benchmarks, investors may struggle to assess project profitability, particularly in Europe where costs can be higher.

This matters for companies planning long-term decarbonization strategies. Battery manufacturers, renewable energy developers, automakers, electronics companies, and industrial suppliers need predictable access to materials. If prices are unclear or supply chains are unstable, clean technology deployment can become more expensive and slower.

The challenge is also financial. New mines and processing facilities require large capital investments, long permitting timelines, and public acceptance. Recycling capacity also needs scaling, especially as end-of-life batteries, electronics, and renewable energy components become larger material streams.

Implications for Businesses and Net-Zero Planning

For businesses, the EU’s critical raw materials agenda signals a shift in sustainability strategy. Companies can no longer treat mineral supply as a narrow procurement issue. It is becoming a core part of climate transition planning, risk management, and supply chain governance.

Firms in clean energy, transport, electronics, construction, defence, and manufacturing may need to map material exposure more carefully, diversify suppliers, strengthen traceability, and assess whether their net-zero plans depend on materials with high geopolitical or environmental risk. Procurement teams may also face higher costs as governments and companies prioritize security of supply over lowest-price sourcing.

For policymakers, the task is to balance speed, sustainability, and resilience. Expanding extraction and processing can reduce dependency, but it also raises environmental, social, and permitting concerns. Recycling and substitution can reduce demand pressure, but they cannot immediately replace primary supply for fast-growing clean technology sectors.

The EU’s warning is therefore clear: the energy transition depends not only on renewable energy deployment, but also on who controls the materials behind it. For Europe, securing critical raw materials is now central to industrial policy, climate policy, and geopolitical strategy.

Source: www.euronews.com