The European Union’s efforts to secure vital raw materials are facing significant headwinds, according to a new report by the European Court of auditors. Despite a two-year-old plan to diversify sourcing and reduce reliance on a handful of countries, the EU remains overwhelmingly dependent on China for key materials like magnesium and gallium. This shortfall is now prompting a renewed push for closer collaboration wiht the United States,as EU officials seek to forge strategic partnerships capable of bolstering supply chain resilience and mitigating economic risks.
The European Union remains heavily reliant on China for critical raw materials despite efforts to diversify supply chains, according to a report released this week by the European Court of Auditors. The findings are prompting the EU to seek closer strategic partnerships with the United States to reduce its dependence on Chinese sources, Bloomberg reported.
EU Faces Challenges in Reducing Reliance on Single Countries for Critical Raw Materials
Adopted two years ago, the EU’s Critical Raw Materials Act aims to strengthen the sourcing of 34 strategic raw materials within the bloc, lessening reliance on imports from a limited number of countries. Currently, a significant portion of these materials comes from Chile, China, and Turkey.
However, a report published Monday by the European Court of Auditors indicates the 27-member bloc is unlikely to meet its targets for domestic raw material extraction by the end of the decade. The EU aims to source 10% of all critical raw materials within its borders and achieve a 15% recycling rate.
Auditors found that 97% of magnesium and 71% of gallium currently imported into the EU originate from China.
“Strategic partnerships concluded with third countries have not yet yielded benefits,” representatives of the European Court of Auditors noted.
The report detailed that while 14 strategic partnership agreements for raw material sourcing have been signed over the past five years, imports from these partner countries have actually decreased for approximately half of the materials examined between 2020 and 2024.
Auditor Kate Pentusa-Rosimannusa stated that the EU is currently dangerously dependent on a few countries for the supply of critical raw materials, emphasizing the importance of member states addressing this vulnerability.
Seeking New Partnerships with Reliable Suppliers
Recent reports indicate the EU is actively pursuing strategic agreements with allies to secure critical material supplies. This week, ministers from the EU, the United Kingdom, the United States, and other traditional allies in Asia and Oceania are meeting in Washington to discuss forming strategic alliances.
The move, as reported by British newspaper The Guardian, is seen as a step towards restoring transatlantic ties following disagreements during the presidency of Donald Trump, and could pave the way for other alliances aimed at mitigating risks associated with China.
Bloomberg reported, citing sources familiar with the matter, that the EU is prepared to sign a memorandum of understanding with the U.S. within the next three months outlining a joint action plan.
The collaboration aims to jointly explore ways to extract critical minerals without relying on China.
The memorandum proposes considering joint projects and price support mechanisms, as well as measures to protect European and U.S. markets from being flooded with materials from other countries and other forms of market manipulation.
Bloomberg noted that the EU’s proposal insists both sides respect each other’s territorial integrity, a clear reference to recent interest from the U.S. in acquiring Greenland, an autonomous territory of Denmark.
Yu Jie, Senior Research Fellow on China at the Chatham House Asia-Pacific Programme, told Bloomberg Television on Wednesday that increasing tensions are emerging between China and the EU regarding trade issues.
She believes Beijing intends to use export controls on rare earth metals to intimidate the U.S., and particularly Europe. Jie assessed that the EU should accelerate the process of increasing its industrial capacity, whether related to raw material processing or the search for alternative sources.
“Rare earth processing can lead to a deterioration of environmental standards. Can the European Union, on the one hand, stand up for very high environmental standards for the benefit of people, and on the other hand, implement critical mineral processing? I think a balance needs to be found here,” Yu said.
She believes the EU needs to think long-term about securing critical raw material supplies, while acting quickly to maintain current delivery volumes.
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