European Leaders Push for Accelerated Critical Minerals Reserves Amid China Dependency Concerns

Industry executives are calling on the European Union to expedite efforts to build strategic reserves of critical minerals, warning that delays could compromise the bloc's ability to secure essential materials for defense manufacturing and clean energy technologies.

Brussels is preparing to initiate a consultation process on mineral stockpiling before the end of the year, according to EU officials. The discussions will address funding mechanisms and identify which specific minerals should be prioritized for acquisition as part of a broader strategy to reduce dependence on foreign suppliers.

Growing Urgency at the Highest Levels

Speaking to EU lawmakers on Wednesday, European Commission President Ursula von der Leyen emphasized the immediacy of the challenge, stating that "a crisis in the supply of critical raw materials is no longer a distant risk."

The commission's work plan for the coming year, released last week, outlined intentions to establish a "critical raw materials centre to monitor, jointly purchase and stockpile" minerals. This initiative represents a significant policy shift as Europe confronts vulnerabilities in its supply chains for materials ranging from graphite and cobalt to gallium—all essential for producing military hardware including fighter aircraft, precision missiles, and radar systems, as well as renewable energy infrastructure such as wind turbines and magnets.

Competitive Disadvantages and Geopolitical Tensions

Europe faces considerable headwinds in its stockpiling ambitions. The United States has already launched a $1 billion procurement program to bolster its own strategic reserves, creating competition for available supplies. Additionally, the EU's limited domestic mining and refining capacity constrains its ability to secure materials independently.

The push for stockpiling unfolds against the backdrop of intensifying trade friction between Western nations and China, which has cultivated a commanding position in critical minerals markets over the past twenty years. Beijing has recently implemented comprehensive export restrictions on rare earth elements and issued warnings in August to foreign companies against accumulating stockpiles, threatening to sever access to metals for those who proceed.

EU Trade Commissioner Maroš Šefčovič engaged with China's Commerce Minister Wang Wentao earlier this month regarding the impact of rare earth export controls on European businesses. While the commission has suggested potential trade countermeasures against China, any such actions would require approval from a majority of member states.

The Scale of European Dependence

"It is all linked to China's dominance of the market and the fact that we procure 80-90 per cent plus of critical minerals from China," explained Albéric Mongrénier, executive director of the European Initiative for Energy Security think-tank. "A stockpile is a reserve that could help stabilise prices and reassure investors in the critical minerals sector."

The commission characterized the situation in a July document outlining strategic stock plans, noting that the EU confronts "an increasingly complex and deteriorating risk landscape" that "ultimately translates into a higher overall threat to the security and availability of essential supplies."

Implementation Challenges Ahead

Industry representatives express skepticism about coordinating stockpiling efforts across 27 member nations. "Everything depends on how it is organised," said James Watson, director-general of Eurometaux, the metals industry body.

"Clear rules would need to be addressed as to who controls the release of such a stockpile and how member states access stockpiles on other member states' territory," Watson added.

Several European countries have initiated preliminary national-level programs. Germany plans to invest €1 billion in raw materials through its development bank KfW to reduce Chinese dependence, while France has established a €500 million equity fund to strengthen domestic metals production.

Practical and Commercial Obstacles

Industry experts identify multiple practical hurdles beyond political coordination. One mining executive cautioned that purchasing additional metals from China to build reserves could paradoxically deepen dependency. They argued that domestic production expansion and development of continental mining and processing capabilities should take priority.

Europe currently operates limited mines and possesses minimal metals processing infrastructure, with facility development timelines stretching years into the future. Certain minerals like graphite and cobalt, while critical for defense applications, are required in such small quantities that dedicated mining and processing operations lack commercial viability.

Storage presents another complication. Paul Lusty, head of battery raw materials research at price reporting group Fastmarkets, noted that traders minimize warehouse inventory and maintain rapid turnover due to storage costs and degradation risks.

"Lithium hydroxide typically has a shelf life of approximately six months—if it has been stored correctly," Lusty said.

Unlike its strategic petroleum reserves, Europe lacks established mineral stockpiles. Industry figures point out that the bloc trails other regions, particularly the United States, which maintains reserves of metals with military applications and has pursued up to $1 billion in mineral procurement for national stocks.

International Engagement Disparities

Michael Scherb, founder of specialist private equity group Appian Capital, highlighted a concerning gap in European engagement. His firm participated in over 20 meetings with US policymakers this year but experienced "no meaningful engagement with EU or UK officials."

Analysts have suggested that NATO could potentially play a role in coordinating stockpiling efforts, as dual-use critical minerals might fall within the alliance's expanded defense spending targets.

Pathfinding Through Pilot Programs

Several EU governments have appointed special envoys to identify supply chain bottlenecks, locate alternative suppliers, and build continental mineral reserves. Allard Castelein, the Dutch government's special representative for raw materials strategy, acknowledged that supply chains remain vulnerable to geopolitical tensions and tariff structures, making it clear that "changes are required."

As a pilot initiative, the Dutch government has tasked the shipyard constructing two new naval frigates with mapping all critical minerals and materials required for production, including components for weapons and radar systems. Castelein explained that the Netherlands is analyzing the entire value chain to understand requirements for strategic stockpiling, ensuring the country can "at all points in time, state that we have a fully operational frigate."

European officials have referenced Japan's approach as a potential model; Japan began stockpiling metals in 1983 and has maintained the program for four decades.

Benjamin Gallezot, France's counterpart to Castelein, identified a fundamental challenge in determining stockpiling priorities: "Some metals with a low criticality today could become critical in the next 20 years and some that are critical today we have solutions that will be implemented in a few years."

The commission is also intensifying efforts to leverage development aid more strategically to secure supplies, reflecting the multifaceted approach required to address Europe's critical minerals vulnerabilities.