The EU plans to create a central body to coordinate the purchasing and stockpiling of critical minerals to stop the US buying up global supplies from “under our noses”, the bloc’s industry chief has said.
Stéphane Séjourné, the EU’s executive vice-president for industrial strategy, told the Financial Times that the EU had become “collateral damage” in a spat between the US and China over access to rare earth minerals.
China imposed export controls on 17 metallic elements known as rare earths in April, after the US banned the sale of some advanced technology to the country. Several EU companies were forced to shut down production lines and make lay-offs as a result of the move.
Beijing postponed even more wide-ranging controls for a year last month after a temporary truce in the tariff war between the two economic superpowers.
The European Commission in October said it would hastily pull together a plan to diversify stocks of critical minerals including rare earths, which also include more common metals such as lithium and copper, in an effort to cut its reliance on China.
China controls much of the critical minerals market and accounts for 88% of refining capacity for rare earths. It also produces more than 75% of refined germanium and gallium, and about 70% of refined lithium, according to EU figures.
Séjourné said that Brussels aimed to create a critical minerals “centre” with dedicated funding “to buy, co-ordinate European purchases, set aside stocks and also to push companies to integrate more economic security into their supply chains”.
He said Europe was “late” putting together such tools compared with the US, which has invested in domestic miners and signed supply deals with governments.
“The Americans have a business department that buys stocks of critical materials before us everywhere in the world. They often buy them from under our noses,” Séjourné said.
Séjourné’s plan, which must first be agreed by the EU’s 27 commissioners and could be subject to change, should also include a rapid signing of partnership deals with countries such as Brazil and South Africa to secure supplies. Séjourné is travelling to both countries in the coming weeks.
The French commissioner also said that the EU should consider introducing price floors to ensure that European companies had access to domestic stock.
He said miners and processors were reluctant to invest in EU production because they feared customers would still prefer to buy cheaper supplies from China, despite the risk of it cutting supply.
The commission is likely to make recommendations to prioritise stockpiling and to diversify supply, he said. Legislation could come later if behaviour did not change.
Séjourné also defended the Dutch government’s seizure of chipmaker Nexperia from its Chinese owner, saying it acted ‘‘in the European interest’’. The move prompted outrage from Beijing and slowed the flow of chips from Nexperia to the EU, causing some companies to warn they will have to reduce production.
The EU in 2023 set targets for domestic production of critical minerals but lengthy and bureaucratic permitting processes and opposition to new mines, often on environmental grounds, have slowed the start of new projects.
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