EU lawmakers propose Brussels take equity stakes in critical raw material projects, mirroring US and Japanese efforts to secure supplies of minerals essential for defence and clean technologies. Members of the European parliament voted to create an agency with the power to take stakes in raw materials companies when needed "to safeguard the union's security of supply", create EU stockpiles and monitor supplies across the bloc.
The move would help Europe reduce its dependency on Chinese minerals for critical technologies such as batteries and green technologies, said Mohammed Chahim, the Dutch lawmaker leading the proposal. "European projects are very sensitive to market and global prices and the global prices can be manipulated by global players," he said. The US and Japan "are way less vulnerable", he noted.
The Trump administration has spent heavily on developing its supply chain, including by taking stakes in producers of rare earths. Last summer, the Pentagon made a $400mn equity investment to take a 15 per cent stake in US rare earths producer MP Materials, along with a $150mn loan. It also signed a 10-year agreement to put in place a minimum price of $110 per kg of neodymium-praseodymium.
The EU's Critical Raw Materials Centre would be funded with €2bn under the EU's next long-term budget and is modelled on Japan's Organization for Metals and Energy Security. Chahim acknowledged that the proposal would require more funding from private actors, national governments and the European Investment Bank to compete with Japanese and US efforts.
Source: Financial Times Companies · Summarized by HeadlinesBriefing