China's strategic mineral controls threaten EU rearmament push, bloc seeks new sources
China's tightening export controls on strategic minerals are putting the European Union's new rearmament programme at risk, prompting the European Commission to open urgent talks with Canada, Australia and Chile on alternative supply agreements.
China's tightening export controls on gallium, germanium and rare earths, imposed in April, are directly hitting the European Union's €800 billion defence investment plan. An internal EU document reviewed by Nikkei Asia shows that 65% of targeted mineral supply still depends on China.
European Commissioner Stéphane Séjourné said « we cannot accept this level of concentrated supply-chain dependency. » The Commission has dispatched urgent missions to Canada, Australia and Chile to negotiate five-year framework agreements. Germany's economy ministry announced €2 billion of direct investment for a new lithium refinery project in Saxony.
China's Commerce Ministry spokesperson He Yongqian said the controls were « in line with international trade rules and the principle of reciprocity. » European defence stocks Rheinmetall and Thales fell 1.8% and 2.2% respectively. EU member states will review their strategic mineral inventories in early July.
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