Highlights

• China controls ~60% of rare earth mining and over 90% of processing, with the real chokepoint in separation, metallization, and magnet manufacturing—not crustal scarcity.
• Europe's catch-up faces a chemistry-and-capex wall: building separation plants, qualifying suppliers, and training operators takes years, while Beijing can drop prices to crush new entrants.
• The deeper problem isn't paralysis but industrial lag meeting geopolitical leverage—Europe needs durable policy tools like procurement commitments and price floors, not just frameworks.

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A German finance article (opens in a new tab) argues that China is using a quasi-monopoly in rare earths to pressure the West while Europe scrambles for alternatives, slowed by permitting and economics. That’s broadly right. But the deeper story is not “paralysis.” It’s industrial lag meeting geopolitical leverage—and the West mistaking plans, frameworks, and announcements for actual capacity.

From Solid to Need for Nuance

Solid: the article’s core figures match widely cited ranges: China controls roughly 60% of mining and about 90%+ of processing. The choke point is separation and downstream manufacturing, not crustal abundance.

Needs nuance: “Europe imports 95%” can be true in Commission framing about dependency, but it is not the same as “China supplies 95%.” Eurostat trade data show China was about 46% of EU rare-earth imports by weight in 2024 (with Russia and Malaysia also large), highlighting how dependency can be both direct and indirect through third countries and embedded supply chains.

Accurate framing: Rare earths aren’t rare in the crust; economically viable concentrations and environmentally manageable processing are the real constraints. The article’s “vitamins of industry” reference (Japan) captures the strategic role of REEs in magnets and advanced systems.

The Real Bottleneck Stack the Article Only Gestures At

The story is bigger than “China vs. Europe.” The decisive variables are:

• Heavy rare earth separation (Dy, Tb) and high-coercivity magnet supply (the true vulnerability for defense and high-performance motors)
• Metallization + alloying + magnet manufacturing, not just oxide availability
• Qualification cycles (automotive and defense do not qualify suppliers on political timelines)
• Workforce and operational know-how in solvent extraction and high-purity QA/QC
• Pricing architecture (long-term offtake, price floors, and demand guarantees)

Trade agreements with Canada or Australia help on feedstock. They do not, by themselves, solve the processing and magnet bottlenecks.

The Competitive Trap: China can “Loosen the Fist.”

Tradium’s Matthias Rüth makes the most important point in the piece: even if Europe builds alternative capacity, Beijing can relax constraints, cut prices, and squeeze newentrants back out.

This is not hypothetical. Market history shows a two-step pattern that investors must price in:

1. Price pressure that starves competitors’ capital formation
2. Policy tightening (quotas, licensing friction, export controls) when leverage is needed

The missing question: does Europe have durable industrial policy instruments—procurement commitments, strategic stockpiles, financing, and price stabilization—to keep non-China capacity alive through the down-cycle? The EU’s Critical Raw Materials Act is a start, but its 2030 benchmarks are ambitious, and execution remains uneven.  Rare Earth Exchanges’ assessment suggests Europe is over a decade away from any sort of resilience at this pace.

What this means for investors

The article sounds like Europe is frozen. The more accurate view: Europe is late and moving, but it is moving into a chemistry-and-capex wall. Europe’s policy toolkit is expanding (strategic projects lists, permitting caps, financing task forces, diversification benchmarks). The industrial system still needs time: separation plants, trained operators, qualified product, and stable economics.

Final Thoughts

China controls much of the world’s rare earth supply chain. Europe buys most of what it needs from abroad, and a lot of it ultimately traces back to China, even when it comes through other countries. Rare earths matter because they help make powerfulmagnets used in electric cars, wind turbines, phones, and weapons. Europe can’t fix this quickly. Mining is hard, but refining and making magnets is even harder. Building those plants takes years, and big customers test new suppliers for a long time before they trust them. China can also drop prices or loosen restrictions to crush new competitors.

So the real problem is not “Europe is paralyzed.” The problem is Europe is behind, and catching up requires long-term policy, long-term contracts, and real industrial capacity—not just announcements.