The EU is increasingly turning to China to source hard-to-find rare earth metals (REMs) and dropping previous import deals with Russia, UBN reports on May 1.

Russia has a cornucopia of raw materials, including REMs and critical minerals, which it has sold to the EU, but so far Brussels has not sanctioned imports due to the limited alternative suppliers.

China dominates the REMs business, controlling 98% of the processing of REMs that are essential for making EVs, sophisticated microchips and renewable energy technology. The EU is only now switching supplies in the context of the growing trade war between Brussels and Washington and is hoping to take advantage of the worsening relations.

The US is also almost entirely dependent on China for the import of REMs but after China restricted the export of seven key REMs to the US, the EU is hoping to step in and absorb the export of these minerals instead. Formerly enjoying a decades-old “special relationship” with the US, that relationship has rapidly soured, pushing Brussels to bolster its ties with China instead in an unprecedented change in the geopolitical balance of powers that have ruled since the end of WWII. Brussels remains wary of Beijing, but with relations with Washington in tatters, an alliance between China and the EU is the obvious counterbalance to US President Donald Trump’s increasingly isolationist stance.

REMs and critical minerals have become a strategic focus for EU policymakers seeking to secure stable and diversified supply chains.

In 2020, EU member states imported 10,700 tonnes of rare earth elements worth €72.3mn ($78.3mn). At that time, Russia accounted for more than half of total imports by value (€9.9mn), while China supplied 43% and other countries contributed just 6.5%.

By 2021, total imports had risen to 16,900 tonnes (€106.5mn), with Russia’s market share falling to 27.2%. China’s share also declined to 35.5%, despite a rise in the absolute volume of shipments, while alternative suppliers captured a growing portion of the market.

The peak in EU rare earth imports came in 2022, when volumes reached 18,400 tonnes with a combined value of €145.7mn ($157.7mn). China regained momentum, supplying 40.2% of the EU’s total imports, as Russia’s share slipped further to 24.5%. Notably, other suppliers – including countries such as the United States, Malaysia and Australia – expanded their share to 35.3%.

In 2024, the EU imported 12,900 tonnes of rare earth elements worth €101.5mn ($109.8mn). China strengthened its position further, providing 46.5% of the total, while Russia’s share recovered slightly to 28.7%. The share of other countries fell to 24.8%, reflecting increased bilateral trade flows between Brussels and Beijing.

The trend underscores a broader reconfiguration of the EU’s critical raw materials strategy in the face of strained relations with Moscow following Russia’s invasion of Ukraine in 2022. At the same time, China has reinforced its dominance in global rare earth processing and export, despite EU efforts to boost supply chain resilience.

EU officials have emphasised the need for diversification and strategic autonomy in critical materials, but the latest figures suggest the bloc remains heavily dependent on external suppliers.

“Reducing dependence on a single source is essential for Europe’s long-term economic and security interests,” the European Commission stated in a recent update on the Critical Raw Materials Act.