China, the world's top producer of rare earths, in October announced new controls on exports of the elements used to make magnets crucial to the auto, electronics and defence industries.
The move rattled markets and snarled supply chains until China later said it would suspend the curbs for one year.
Already since April, Beijing had required licences for certain exports of the materials, hitting global manufacturing sectors.
"Europe is responding to the new global geopolitical reality," EU industry chief Stephane Sejourne said of the plans aimed at countering what he has likened to a raw earths "racket" run by Beijing.
The European Commission said it would unlock nearly three billion euros ($3.5 billion) to support strategic projects in mining, refining and recycling of the vital minerals and metals -- both within Europe and in partner countries.
The EU's executive also proposed the creation of a European Centre for Critical Raw Materials that will be the bloc's supply hub, modelled on Japan's state-run Japan Oil, Gas and Metals National Corporation.
Sejourne said the centre would have three main tasks: "Monitoring and assessing needs, coordinating joint purchases on behalf of member states, and managing stockpiles and deliveries to companies as required."
Brussels also wants to curb exports of scrap and waste from permanent magnets -- made from rare earths and widely used in industry -- as of next year, to boost recycling within Europe.
The EU also plans targeted restrictions on aluminium waste exports and may do the same for copper.
- Europe squeezed -
Two years ago, the EU adopted a law aimed at securing supplies of critical raw materials.
But the bloc finds itself squeezed between China's restrictions and the United States under Donald Trump, which is negotiating bilateral agreements on all fronts to secure its own supplies.
A study published Monday by the EU Chamber of Commerce in China said 60 percent of its members expected disruptions to their supply chains because of government-imposed restrictions, and 13 percent fear they may have to interrupt or slow down their production.
The European Commission also Wednesday updated its strategy for ensuring the EU's "economic security".
"Around the world, trade is being weaponized. Supply chains are under pressure," the EU's trade chief Maros Sefcovic told reporters in presenting the plan.
"Strategic choke points are turning economic dependency into political pressure, and this hits our companies every single day," he said.
The first such strategy was produced in 2023 as the bloc grappled with the harsh lessons from the Covid pandemic and Ukraine war that showed up the fragility of its supply lines.
But new diplomatic and geopolitical tensions, most strikingly a US administration willing to act aggressively on trade against its close allies, have prompted Brussels to revisit the rulebook.
The updated doctrine calls for easing the use of key tools already at the EU's disposal -- such as controls on foreign investment, export restrictions and diversifying suppliers -- and adding new ones if needed.
"Europe will continue to champion open trade and global investment, but our openness must be backed by security," Sefcovic said.
"This is why you will see more strategic and assertive use of our existing tools, the development of the new ones where needed, and stronger capacity to collect and share economic intelligence."
What are 'rare earths' for?
Paris (AFP) Dec 3, 2025 -
Crucial for making smartphones, fighter jets and electric cars, "rare earth" metals have become a strategic bargaining chip since main producer China this year introduced restrictions on their exports.
As the EU unveils a plan on Wednesday for boosting European production of critical raw materials to reduce reliance on China, here are some facts about these 17 elements and their key uses:
- Neodymium, praseodymium, dysprosium, terbium -
Global raw production of rare earths increased from 220,000 tonnes in 2019 to 390,000 tonnes in 2024 -- an increase of 77 percent over five years, according to a benchmark commodities report by French research group Cercle CyclOpe.
Four elements account for most of the sector's economic value: neodymium, praseodymium, dysprosium and terbium.
- Magnets for wind turbines -
These four "magnetic" rare earths are mainly used to make magnets, notably neodymium-iron-boron magnets -- about 10 times more powerful than conventional ones.
Use of the rare elements maximises magnets' performance while reducing size and weight, said Damien Ambroise, energy manager at French consultancy Bartle.
A single offshore wind turbine contains up to one tonne of such magnetic rare earths.
- Fighter jets, golf clubs -
Aviation is a major consumer of rare earths, especially for military plane manufacturing.
According to the US specialist newsletter Rare Earth Exchanges, US aerospace firm Lockheed Martin is the biggest American user of samarium, employed to make magnets that can withstand extremely high temperatures.
Each F-35 fighter jet requires more than 400 kilograms of rare earths, according to a report by the US Congressional Research Service.
Scandium is used to make light, strong aluminium-based alloys prized in aerospace -- and also in high-end sports gear such as golf clubs, bicycles and baseball bats.
- Smartphones -
Rare earths are also found in every smartphone, enhancing screen performance and enabling the phone to vibrate.
Each handset contains about three grams of them -- more than 3,700 tonnes overall for the 1.24 billion devices sold worldwide in 2024.
- Electric and fuel vehicles -
Each hybrid or electric vehicle battery and motor contains between 1.2 and 3.5 kilograms of rare earths, according to an estimate by France's Bureau of Geological and Mining Research.
They are also used in the manufacture of miniature motors, such as those that fold away a car's wing mirrors automatically when it is parked.
Combustion-engine vehicles use rare earths too, notably in catalytic converters. Lanthanum and cerium help cut fine particle emissions.
- Oil, glass, lasers -
In the chemical industry, cerium is widely used in oil refining and glass polishing -- as well as in flints for cigarette lighters.
Erbium is used in various medical fields, including dentistry, dermatology and ophthalmology.
Erbium and neodymium are also important in making lasers for industrial engraving and cutting.
Adding different rare earths alters the wavelength of the laser, and thus its use and colour, Ambroise said. "It makes for pretty colours in sound-and-light shows."
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