On March 25, the European Commission, for the first time, adopted a list of 47 Strategic Projects aimed at boosting domestic capacities for strategic raw materials. This development highlights that securing critical raw materials has become a top strategic priority for the EU. These materials are indispensable to clean technologies—such as electric vehicle batteries and wind turbines—yet Europe remains heavily reliant on Chinese imports, especially rare earth elements, predominantly produced by Chinese state-run companies. Recognising the economic importance and supply risks of critical raw materials, the European Commission released the ‘Critical Raw Materials Resilience: Charting a Path towards Greater Security and Sustainability’ in September 2020 and established the European Raw Materials Alliance. These initiatives form part of the EU’s wider effort to achieve strategic autonomy and reach net-zero emissions by 2050, including diversification of supply through partnerships with non-Chinese producers, particularly in Africa.
The EU’s strategy to reduce its dependence on rare earth imports from China assumes that diversification is both viable and politically sustainable. Efforts to shift supply chains to sub-Saharan Africa, though well-intentioned, face major obstacles. Chief among them is the increasing exposure of European companies to Environmental, Social, and Governance (ESG) risks, which may undermine the effectiveness of the diversification agenda. Rather than framing diversification as an attainable goal, it may be more realistic to question whether full strategic autonomy in critical raw materials is even feasible under current global economic conditions.
China’s Strategic Leverage in the EU’s Raw Materials Supply
China plays a pivotal role in the EU’s supply of critical raw materials, particularly rare earth elements. The EU relies on China for up to 98% of its rare earth imports. Although these elements are found elsewhere, their extraction and processing are often not economically viable beyond Chinese territory. This entrenches China’s dominance in the global rare earths market and grants it significant leverage over the EU’s material security.
Rising geopolitical tensions have intensified concerns surrounding the EU’s dependency on Chinese critical raw materials. In its 2019 ‘EU–China: A Strategic Outlook’, the EU identified China as a ‘systemic rival’ in specific domains. These concerns have deepened, fuelled by EU criticisms of China’s handling of the COVID-19 pandemic and mounting scrutiny of Chinese investments in Europe. This shifting relationship underlines the necessity for the EU to reconceptualise its resource strategies—not merely as economic matters, but as geopolitical imperatives.
Can Europe Break Free from Chinese Supply Chains?
Reducing reliance on China has thus become a cornerstone of EU strategy. Peter Handley of the European Commission underscores that diversification is essential for securing stable supplies of critical raw materials. As laid out in “Critical Raw Materials Resilience”, the EU has actively pursued partnerships with Canada, various African nations, and neighbouring countries. Sub-Saharan African mineral producers in particular stand to benefit from these efforts. However, this strategic shift also entails increased exposure of European companies to ESG-related risks, particularly in fragile regulatory environments.
Africa’s mining sector—characterised by labour intensity, technical risks and ESG-related regulatory challenges—has been further constrained by the COVID-19 pandemic, which curtailed operations, reduced global demand, and led to a decline in foreign investment. These pressures have limited the capacity of many African countries to meet ESG compliance standards, potentially discouraging European investment. In contrast, Chinese actors may offer more flexible terms. For example, Guinea, a major producer of greenfield bauxite, has deepened its commodity trade ties with China, despite criticism from Brussels and Washington over President Condé’s extended tenure.
While the EU faces challenges in its diversification efforts, such as competition from Chinese firms and escalating ESG-related risks, it can leverage its role as a standard-setter. Allegations such as that Chinese firms exploit natural resources without delivering substantive local economic benefits have prompted political backlash. For instance, Michael Sata’s election as Zambia’s president in 2011 was influenced by anti-Chinese sentiment, following a fatal incident at a Chinese-operated coal mine. Similarly, in 2013, Sanusi Lamido Sanusi, then Governor of Nigeria’s Central Bank, described China not as a partner, but as a competitor—highlighting broader tensions in Sino-African relations.
Amidst these complications, the EU can draw upon its role as a global standard-setter and its commitment to sustainable development. By supporting the implementation of robust regulatory frameworks in African states and facilitating ESG compliance, the EU could cultivate more resilient and equitable supply chain partnerships. Such initiatives would not only reduce European reliance on China but also help to define future norms of global resource governance.
Securing the supply of critical raw materials is central to the EU’s strategic autonomy as it transitions towards a low-carbon economy. While EU policymakers increasingly frame supply chain resilience as a matter of strategic autonomy, the reality is that China’s role in global raw material markets is not easily circumvented. In response, the EU has sought to strengthen access to alternative sources, particularly in sub-Saharan Africa. Yet such efforts are fraught with challenges, including heightened ESG-related risks for European firms operating in these contexts. Nonetheless, the EU’s regulatory capacity and leadership in sustainable development offer a means to build more resilient and equitable partnerships—key to reducing long-term dependence on China.
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This article gives the views of the authors, and not the position of China Foresight, LSE IDEAS, nor The London School of Economics and Political Science.
The cover image “RE mine in Baiyun Ebo, Inner Mongolia” by NASA (NASA/GSFC/METI/ERSDAC/JAROS & U.S. / Japan ASTER Science Team) is in the public domain via Wikimedia Commons.
