When China recently suspended exports of six rare earth minerals, the danger became clear: a wide range of Western industries, ranging from aerospace to semiconductors, are vulnerable to Beijing’s whims. Americans and Europeans now must consider how to respond – (1) open new mines (2) double down on new recycling tech and capacity or (3) go cap-in-hand to Beijing.
Rare earths — comprising 17 metallic elements — are not truly rare. They are just spread widely, making profitable extraction difficult, expensive, and environmentally taxing. China dominates global rare earth reserves, with a 90% market share. Brazil, India, Australia, Russia, Vietnam, the United States, and Greenland trail.
The new Chinese export restrictions on key minerals came in response to US tariffs, Chinese customs officials are blocking exports of heavy rare earth metals and magnets not just to the US, but to all countries, including Europe.
Rare earths make up a small share of Chinese exports. Beijing suffers little by forgoing these earnings — while imposing maximum pain on the US and its allies. The metals power everything from electric vehicles to wind turbines. A single megawatt of wind power can require as much as 600 kilograms of permanent magnets, and rare earths account for roughly a third of that total.
Multiply across the gigawatt-scale projects planned throughout Europe, and demand skyrockets. Britain alone, for instance, already operates more than 11,000 turbines producing around 30 gigawatts of electricity, with an eye to double that by 2030. To meet its ambitious climate goals, Europe and the US must move swiftly to diversify their supply chain.
So far, the US approach seems to be dig, dig, dig. President Donald Trump has pressed Ukraine for a rare earth deal and signed an executive order to boost US mineral output. Ukraine controls around 5% of the planet’s rare earth deposits, including considerable lithium reserves. At the time of Russia’s full-scale invasion, Ukraine has only exploited 15% of that potential due to steep costs and scarce investment. The US is also casting eyes on Greenland and its mineral reserves.
But it will take billions of investments and years of development to bring new reserves online. And Europe just does not have those reserves at all. In the meantime, the best solution is new tech and capacity for recycling. Europe is taking the lead with the Critical Raw Materials Act. This multi-billion-euro initiative introduced in 2023 sets firm domestic targets for extraction, processing, and recycling, while limiting reliance on any single foreign supplier. In doing so, it elevates critical minerals to a top-tier strategic priority.
The European Commission has adopted 47 strategic projects across 13 EU Member States to strengthen the bloc’s raw materials value chain. These aim to boost extraction, processing, recycling, and substitution of key minerals, helping the EU meet its 2030 targets while reducing reliance on external suppliers.
Real change is happening on the ground too:
- Heraeus Remloy has launched Europe’s largest recycling plant for rare earth magnets in Bitterfeld, Germany. With a processing capacity of up to 600 tonnes per year, with plans to expand to 1,200 metric tonnes. It could meet more than 30% of European demand for new magnets.
- French company Caremag is building Europe’s first large-scale rare earth recycling facility in Lacq, France. With over €200m of French and Japanese investment, this aims to recycle over 2000 tonnes of rare earths annually, and produce 600 metric tons annually of heavy rare earth dysprosium and terbium oxides — approximately 15% of global production.
- In the UK, a House of Commons Committee report warns that ignoring the need to cultivate a rare earth supply chain at home could sabotage net zero plans and leave British consumers vulnerable to foreign manipulation. In response, British-based Ionic Technologies is has developed a new patented recycling process, and is constructing a Belfast facility to reclaim key elements, especially neodymium, from retired wind turbines, electric motors, and loudspeakers.
- Hydrometal (Liège, Belgium) is one of few European operations capable of processing metallurgy-related waste to recover rare earth elements, including gallium and germanium—metals recently subject to Chinese export restrictions.
The company has leveraged its specific knowledge and expertise in specialized chemistry to establish a successful operation.
- Other startups include NeoPerformanceMaterials (Estonia) and RarEarth (Italy), which focus on collecting and recycling electric motors,
The long-term solution is a fully circular economic strategy. A strong recycling infrastructure will enable Europe to close the loop on rare earth metals, limiting imports, ultimately to near-zero, and building resilience. Rare earths do not degrade over multiple uses, so they can be recovered and repurposed indefinitely.
Europe cannot hope for any kind of tech sovereignty while relying on Chinese-controlled rare earths. It cannot count on cooperating with the US. Targeted investment in new recycling technology and refining capacity represents the best response.
Christopher Cytera CEng MIET is a non-resident senior fellow with the Tech Policy Program at the Center for European Policy Analysis and a technology business executive with over 30 years’ experience in semiconductors, electronics, communications, video, and imaging.
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions expressed on Bandwidth are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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