The global race for control over critical minerals has taken a dramatic turn this week, as the European Union, Canada, and the United States each scramble to secure their own supply chains in the face of China’s near-monopoly on rare earths and related resources. With new export controls from Beijing sending shockwaves through industry and government, Western nations are moving from words to action—launching investments, new alliances, and legislative measures to reduce their dependence on the world’s dominant supplier.
On October 31, 2025, the European Union found itself in the midst of a trade dispute with China, triggered by Beijing’s recent imposition of export controls on rare earths. These minerals are essential for manufacturing everything from electric vehicles and smartphones to advanced defense systems. The crisis began earlier in October when the Netherlands placed Chinese-owned chipmaker Nexperia under surveillance and suspended its Chinese chief executive, prompting Beijing to ban re-exports of rare earths to Europe. According to ENR, the EU says these restrictions have already forced some European companies to halt production and have inflicted economic harm across the bloc.
European Commission President Ursula von der Leyen responded with urgency. On October 25, she called for a rapid package of measures to reduce Europe’s dependence on raw material imports from China. “In the short term, we are focusing on finding solutions with our Chinese counterparts, but we are ready to use all the instruments in our toolbox to respond if needed,” von der Leyen said, according to ENR. She went further, emphasizing, “Whether on energy or raw materials, defence or digital, Europe has to strive for its independence, and this is our moment to do it.”
The EU’s dependence on China for critical raw materials is profound. Experts told the Czech news agency CTK that Europe relies heavily on imports of rare earths, lithium, cobalt, nickel, and even solar panels from China—items crucial for the green energy transition and high-tech industries. While Europe has its own deposits of these minerals, it lacks the refining capacity that China has methodically built up over decades. “Most of these dependencies threaten European industry, especially in the areas of automotive, energy and renewables or chemical and pharmaceutical industries,” explained Zuzana Krulichová of the Institute of International Studies at Charles University in Prague.
China’s dominance is not just a matter of geology. While rare earths are abundant in China, their extraction is costly and environmentally damaging, requiring significant water and energy resources. Still, China’s vast supply and refining infrastructure have given it near-monopoly control of the global market, as ENR reports. The risk is particularly acute in the processing phase—where Europe is most vulnerable.
To address this, the EU has passed the Critical Raw Materials Act, designed to secure a reliable and sustainable supply chain by strengthening Europe’s own value chain for these materials. According to the European Commission, 47 strategic projects have been selected across 13 member states—including Spain, France, Germany, Czechia, and others—to secure and diversify access to raw materials. Spain, for example, now supplies nearly a third of the world’s strontium metal and is active in extracting tungsten, wolframite, and feldspar. Meanwhile, Portugal, with significant lithium reserves, supports the EU’s legislative push and seeks to attract investment for sustainable resource exploration and processing.
The Czech Republic’s lithium mining project at Cinovec—Europe’s largest deposit—has also been listed as strategic, though environmental risks remain. “This is a significant opportunity for the Czech Republic in the entire supply chain. However, there are also environmental risks associated with the project, for example, and at the same time, the deposit will only cover part of the future needs within the EU,” Krulichová noted.
In a move to further coordinate efforts, the European Commission is establishing a common platform for the purchase and storage of critical raw materials, modeled after the bloc’s joint energy purchasing scheme. The REsourceEU program is expected to be unveiled in November, aiming to pool resources and bargaining power across member states.
While the EU scrambles for solutions, the United States has moved ahead with its own negotiations. On October 30, President Donald Trump announced an agreement with Chinese President Xi Jinping to ease the export controls dispute between the US and China, though the impact on EU-China talks remains unclear. According to ENR, a European Commission spokesperson commented from Brussels: “In principle, we welcome any development that removes barriers to global trade flows.” However, the EU remains “fully focused on its own bilateral trade engagement with China, including—as this relates to trade in—rare earth minerals.” High-level technical discussions between the EU and China were scheduled for October 31 in Brussels.
Meanwhile, Canada has seized the moment to position itself as a key player in the Western push for critical mineral independence. On October 31, the Canada-led Critical Mineral Production Alliance announced a slew of G7 investments in Canadian projects during the closing day of the G7 energy and environment ministers’ meeting in Toronto. These investments include mineral purchase agreements, stockpiling, equity deals, and price floors—all designed to counter China’s dominance.
Canadian projects receiving support include Nouveau Monde Graphite’s Matawinie operation, Vianode’s synthetic graphite facility in St. Thomas, Torngat Metals’ Strange Lake rare-earths project in Quebec, and Rio Tinto’s scandium plant in Sorel-Tracy. The federal government invoked the Defence Production Act, enabling Canada to launch its own stockpiling regime for critical minerals, mirroring the US approach. “By protecting domestic production under volatile global conditions, we ensure a secure supply of critical minerals to Canadian and allied defence industries,” said Natural Resources Minister Tim Hodgson during the announcement, as reported by The Globe and Mail.
Industry leaders welcomed the move. Pierre Gratton, president of the Mining Association of Canada, called the G7 announcement “a big step forward for Canada, after years of promising big but only making modest advancements.” He added, “The actions announced today are concrete and will begin to reduce the unsustainable over-reliance on China for supplies of too many minerals and metals. Canada, with its massive mineral endowment, will be a major beneficiary.”
Some of the projects are already scaling up. Rio Tinto’s scandium plant, currently producing three tonnes annually, received a $25 million investment and is targeting nine tonnes a year—potentially accounting for 20% of the global market. Torngat Metals’ Strange Lake project, containing dysprosium and terbium (rare earths previously restricted by China), plans to have a mine and concentration plant operational by 2028. Nouveau Monde Graphite has secured offtake agreements with the Canadian government, Japan’s Panasonic, and Luxembourg-based Traxys, while Northern Graphite is partnering with Italy’s Alkeemia.
US Energy Secretary Chris Wright summed up the stakes at the G7 meeting, stating, “The ability to mine, process and refine critical minerals is a strategic necessity for the G7 and its allies, given the massive risk posed by China. China, frankly, just used non-market practices to squish the rest of the world out of manufacturing those products, so it got strategic leverage. Everybody sees that now.”
As the world’s major economies race to secure their future, the struggle for control over critical minerals is shaping up to be one of the defining economic and geopolitical contests of the decade. The coming months will reveal whether coordinated Western action can truly loosen China’s grip—or if new dependencies will simply replace old ones.
