The long running debate over how Europe can ensure a resilient supply of critical raw materials has risen to the top of the political agenda again.
With ongoing threats of export restrictions on rare earths, including batteries and materials, from China and recurring tariff threats from the US, a long-term EU strategy to secure resilient raw material supply chains has never been more important.
China continues to dominate global clean-tech supply chains. The IEA estimates that China processes around 70% of global lithium, 78% of cobalt and almost all manganese and graphite batteries.
Europe’s response? ReSourceEU; the mineral counterpart to RePowerEU. Is it too little, too late, or can this plan deliver much needed action?
The real test is whether ReSourceEU moves beyond reshuffling existing initiatives and delivers capital, ownership and project execution.
Much of what seems to be on the table currently is simply a rebranding of existing plans. The Critical Raw Materials Act (CRMA) already identifies strategic projects and while the EU has concluded over 14 strategic partnerships, few concrete projects have emerged publicly.
Looking at overseas investments into mineral projects, the EU is failing to catch up.
Since 2020, China has invested over $15 billion in key battery metals projects overseas. In contrast, EU companies have invested $1.7 billion, all of it in Argentina.
The Commission also has its eyes on stockpiling as a resilience measure, taking inspiration from Japan's JOGMEC. Still, storing minerals isn’t easy. Lithium hydroxide, for example, lasts only about six months. Stockpiles may help in the short-term, but they don’t create new, diverse supply chains.
So, what do we need instead?
Finance and equity in strategic projects
Europe’s central bottleneck is not a lack of initiatives, it is money. Oversupply is making it hard to get projects off the ground. Without direct investment and de-risking measures, new supply chains will remain fragile. ReSourceEU’s real impact will depend on its ability to bring financial muscle to its plans.
It should allow the EU to take stakes directly in mining or processing projects. This could happen either through the Raw Materials Centre – which so far is set to function largely as a demand‑aggregator and purchasing mechanism – or by scaling up the Global Gateway so that the EU can act like a development‑finance institution. The next EU budget’s Global Europe instrument should provide direct support to overseas projects too.
EU governments are already taking stakes in projects. Germany’s Raw Materials Fund run by KfW foresees €1 billion until 2028 with equity-level investments of €50-150 million – though its rollout has faced bureaucratic delays.
However, a coordinated approach at EU level is needed to ensure weight and impact. Several member states have announced funding programs in the past two years but to be able to compete with the likes of China or the US, a reorganisation of funds at EU level is needed.
EU ownership would also give leverage to promote best practices and high ESG standards. This is not just about oversight but making partnerships mutually beneficial through tech transfer and value addition e.g. by helping countries scale their own industrial policies.
ReSourceEU should ensure an EU-wide approach
Capital deployment alone is not enough and must be matched with smart industrial policy and EU‑level coordination. That’s why Europe should replicate the US’s MINVEST, bringing together investors, miners and offtakers. An “EU Minvest” model should coordinate EU and member states’ capital and provide a clear framework for offtake agreements together with industry. Vertical supply chain integration serves both industry and the EU.
Keeping your friends close
Finally, to stabilise investment conditions, Europe should consider teaming up with other countries to create so-called ‘standards-based markets’. This means that countries that follow the same rules – e.g. ESG standards – can trade at fair and stable prices. Mineral prices would be backed by price mechanisms.
This model is gaining traction globally. The recent US-Australia minerals agreement commits to adopting a standards-based system allowing members to trade freely within a pricing framework. This echoes the recently announced US Minerals Alliance aiming to create a “club” of producers that will benefit from stable pricing and tariff-free trade. The announced G7 Critical Minerals Action Plan sets out commitments to further develop such markets too.
Price mechanisms such as price floors or contracts for difference can cushion projects from market volatility, making responsible mining and processing economically viable.
Importantly, this should not result in overdependencies on other countries like the US. The EU must balance onshore production with truly diversified supply. This means being strategic when it comes to its choice of partner.
ReSourceEU’s ambition is necessary but it should leverage all of the EU’s power. Europe must use its financial muscle by investing, owning and de-risking projects directly. Stockpiles may cushion shocks, but they do not build supply chains. Strengthening its financial arm will put Europe back in the race.
