The EU reduces dependence on Chinese minerals with a support package

EU Commission will announce a plan next week that aims to reduce dependence on China for so-called critical raw materials, the news agency Reuters reports.

The projects are called the Economic Security Doctrine package and the ResourceEU plan.

The plan the background is China’s October threat of export restrictions on rare earth metals. The last time China announced restrictions was in April.

Rare earth metals are needed, for example, in the EU’s automotive and semiconductor industries and in various clean energy projects.

According to Reuters, the Commission is proposing immediate funding of three billion euros for the production of critical raw materials.

The subsidies would finance various refining projects of rare earth metals such as gallium, germanium and lithium.

According to Reuters, the support would be allocated to the 25 most urgent projects.

The representatives of the mining companies criticized the EU’s support measures for being slow.

The EU has also launched a pilot project in which the aim is to purchase rare earth metals as a joint purchase, in order to obtain a more favorable price.

The aim is to obtain trade agreements from different parts of the world, such as Brazil and Central Asia.

China largely controls rare earth reserves, mining and processing know-how.

”Europe has also become more vulnerable due to our dependence on third countries for our security and the supply of critical raw materials”, President of the European Central Bank (ECB) Christine Lagarde said last week.

As geopolitical tensions grow, many economic regions strive to increase their self-sufficiency, so that their industry cannot be undermined by various trade restrictions. Rare earth metals therefore play an important role in the global trade policy that is becoming more multipolar.

EU Commissioner for Industry Stéphane Séjourné said this week that Europe is not just a bystander in the midst of US-China trade tensions, but a “direct target”.