Key mineral scramble intensifies: EU plans to establish strategic reserves to prevent the US from "snatching" them.

In the face of increasingly fierce global competition for critical minerals, the European Union is planning a major strategic move. To ensure the security of its industrial and defense supply chains, Brussels intends to establish a central agency to coordinate the procurement and strategic reserves of critical minerals.

Stéphane Séjourné, Vice President for the Execution of EU Industrial Strategy, revealed this plan in an interview with the UK's Financial Times. He frankly stated that the EU has become “collateral damage” in the scramble for rare earth resources. He noted that the United States is “snapping up” supplies of critical materials around the globe “right under our noses,” and Europe must develop its own tools to respond.

The urgency of this move stems from recent supply chain shocks. Rare earth elements are vital for key sectors such as defense and clean technologies.

The European Commission announced last October that it would urgently draft a plan to diversify supplies of critical minerals, including common metals like lithium and copper. Séjourné’s new proposal aims to translate this intention into concrete actions and institutions, fundamentally enhancing the EU’s economic security.

Responding to Early Moves by the US

EU officials believe that Europe has lagged behind in securing supplies of critical minerals. Séjourné pointed out that, compared to the United States—which has already invested in domestic miners and signed supply agreements with foreign governments—the EU’s efforts to establish similar tools have come “too late.”

“The Americans have a commercial department that is one step ahead of us anywhere in the world at buying up stock of critical materials,” Séjourné said, “Often, they buy the goods right under our noses.”

To catch up, Séjourné’s plan includes quickly signing partnership agreements with countries like Brazil and South Africa to secure supplies. He also plans to visit these two countries in the coming weeks.

According to Séjourné, the EU plans to set up a critical minerals “center” with dedicated funding. The core function of this agency will be “to purchase, coordinate European procurement, build up reserves, and encourage companies to incorporate economic security more into their supply chains.”

This plan still requires approval from the EU’s 27 member commissioners and may be further adjusted during subsequent discussions. Its goal is to change the vulnerable status quo where European companies generally keep only a few weeks’ worth of stock. Séjourné noted that the European Commission may first propose prioritizing inventory and diversified supply, but if company behavior does not change, future legislation is not ruled out.

Multi-Pronged Approach to Ensure Supply Security

In addition to establishing reserves, the EU also plans to take a series of measures to strengthen the resilience of its supply chains. Séjourné pointed out that companies typically keep only a few weeks of inventory, making them extremely vulnerable to supply disruptions. The European Commission may first suggest prioritizing replenishment of inventory and diversification of supply, but if company actions remain unchanged, follow-up legislation may be introduced.

This approach has industry support. Victor van Hoorn, head of the clean tech industry group Cleantech for Europe, said that after the “wake-up call” of export controls, Europe needs to act faster to shore up its supply chain for critical raw materials. He commented:

“Europe needs to clearly map out its demand and vulnerabilities for critical raw materials (CRM), and then use every possible financial de-risking tool to address these issues.”

Despite clear direction, the EU still faces challenges in boosting domestic supply. The EU set targets for domestic production of critical minerals in 2023, but lengthy and bureaucratic approval processes, along with frequent objections to new mining projects on environmental grounds, have slowed the launch of new initiatives.

From a longer-term perspective, the plan will also fund innovation to develop alternative technologies that do not require rare earths. “The best way to achieve independence is to no longer need these raw materials,” Séjourné said.

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