Stockpiles and joint procurement: EU aims to intensify efforts to secure critical raw materials.
The United States is ramping up pressure not only in building supply chains for critical raw materials but also in buying up overseas stockpiles. In their push to reduce dependence on China, the dominant global player in raw materials, the U.S. is increasingly beating European buyers to the punch, according to EU Commissioner Stéphane Séjourné in an interview with the Financial Times (paywall). Séjourné, who oversees the EU’s industrial and trade policy, wants to counter this trend with a new EU body equipped with its own funding to coordinate joint purchases and build strategic reserves. The institution is also intended to encourage companies to strengthen the economic security of their supply chains. Raw-material partnerships, for example, with Brazil, are expected to complement the bloc’s efforts to gain more autonomy in securing resources.
The differing pace and approach on both sides of the Atlantic was recently noted by Erik Eschen, CEO of Vacuumschmelze, in a conversation with Bloomberg (paywall). The U.S., he said, is currently setting the tone in (re)building domestic supply chains, while European industry and policymakers wait for solutions from either the U.S. or China. Europe does have expertise in rare earths, Eschen added, but this know-how is increasingly migrating abroad, to the U.S., Canada, and Australia. Vacuumschmelze, headquartered in Hanau, Germany, produces magnetic alloys and permanent magnets. The company recently opened a magnet plant in South Carolina, backed by roughly $200 million in government subsidies and tax credits.
Philippe Kehren, CEO of French rare-earth group Solvay, voiced similar concerns. “We still feel limited support in Europe today. That’s why we continue to work with European policymakers to determine how we can create the right framework conditions. To be very clear: we are currently seeing more support coming from North America.” Concrete examples of Europe losing expertise and capacity include the canceled construction of a rare-earth refinery in Hull, England, and the sale of British rare-earth metals and alloys producer Less Common Metals to a U.S. company.
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