Highlights

• The EU is increasing reliance on China for rare earth metals, despite claiming to seek supply chain diversification.
• China controls over 98% of global rare earth processing capacity, creating a strategic dependency for the EU.
• The bloc must develop an integrated supply chain strategy to avoid becoming a price-taker in the global rare earth market.

Brussels’ decision to pivot away from Russian rare earth metals (REMs) and deepen procurement ties with China, under the guise of strategic realignment, raises serious questions about the European Union’s long-touted commitment to critical mineral diversification and supply chain autonomy. Recent data confirms that China now supplies nearly half (46.5%) of the EU’s rare earth imports, as Russia’s share fluctuates post-Ukraine invasion. But if the goal is to reduce reliance on geopolitical adversaries, why is Brussels doubling down on a far more dominant monopoly?

While EU officials publicly champion "strategic autonomy" and diversification under the Critical Raw Materials Act, the facts on the ground tell a different story: China controls over 98% of global rare earth processing capacity and continues to consolidate downstream market power in magnet and battery production. Moving from one authoritarian supplier to another—while shutting out allied sources in Australia, North America, and Southeast Asia—is not diversification; it is dependency repackaged reports, Intellinews (opens in a new tab) in Europe.

The logic that Beijing’s strained trade relations with Washington create a window of opportunity for Brussels ignores the long-term industrial risk of entrenching China’s grip on global REM flows. The EU’s current approach fails to address the structural midstream and downstream bottlenecks that make China indispensable, not just as a miner, but as the world’s only full-spectrum rare earths ecosystem.

Rare Earth Exchanges (REEx) suggests that EU decision-makers move beyond political optics and invest in an integrated supply chain strategy—from upstream mining in allied nations to European-based separation plants, metallization, and magnet manufacturing. A revisit with the United States continues to be important—the two blocs have been allies for too long not to. 

Unless the bloc builds or partners in midstream and downstream capacity, it will remain a price-taker in a global system still dictated by Beijing. The EU must decide whether it wants autonomy or just a different form of dependence.