Europe’s Strategic Resources Quandary

The EU finds itself in an awkward position where its most significant ally and economic partner, the US, no longer wants the responsibility of being a superpower. At the same time, both Russia and China, the most significant competitors to Europe in terms of military, economy, and global influence, are not only becoming more belligerent but also harder to predict.

So, for better or for worse, the EU is rearming its military machine to face this more fractured world, and like any military machine, it is hungry for resources and doesn’t want to be tethered to the trade whims of a foreign power.

The problem? The EU’s ambitions for modernising and revamping its forces will require a significant amount of raw materials that aren’t readily available on the continent. From night vision to new-generation fighters, they all utilise an array of natural resources that are either scarce or challenging to process. Perhaps most worrying of all, is how entangled China and Russia are in the supply chain.

To see what we mean, look at what happened in 2024. Amid rising diplomatic tensions, China imposed a ban on the US on gallium, germanium, and antimony, all of which are critical raw materials for weapon systems, used from sensors on fighters to tank weapon systems. In April 2025, China further imposed trade restrictions on seven rare earth minerals: dysprosium (used in integrated power packages like the ones found in the F-35 and missile actuators), gadolinium (sensors, optics and imaging systems), lutetium (optics, targeting systems and lasers), samarium (ship propulsion and power packages), scandium (high strength light weight alloys), terbium (high performance magnets), and yttrium (Radars, communications and lasers).

These restrictions were aimed primarily at the US, yet their impact was so great that EU factories were also forced to close down. One of the EU’s top diplomats, Kaja Kallas, was even reduced to begging China to lift the restrictions due to the threat they posed to the European supply chain.

If the EU’s rearmament plans could be so shaken just from being caught in the crossfire of China and America’s trade war, it raises serious concerns about how feasible rearmament is. Especially given the complexity of supply chains in the arms industry - if the EU builds its defence equipment like it builds everything else, many countries could find themselves in a position to disproportionately weaken the EU's warfighting capability.

The big question, then, is how Europe can protect its supply chains to ensure strategic autonomy. The answer, unfortunately, is that it’s going to be even harder than most officials would like to admit.

Limits of Supply Chains and Strategic Autonomy

The issue of fragile supply chains has been building since at least 2020, when the pandemic gave the entire world a crash course in how integrated the global economy is. In an effort to drive down costs, critical junctures had been created that had no or few alternatives, meaning that if they stopped working - say, amid worldwide lockdowns - then whatever they helped create would suddenly become scarce and rise in price. It also showed that the knock-on effects of these price rises may not always be predictable: who outside of the industry would’ve known that shutting down fertilizer plants would lead to a shortage of dry ice, due to the sudden scarcity of carbon dioxide?

Fast forward half a decade, though, and these junctions are as vulnerable as ever. As of 2024, China supplied 100% of the EU’s heavy rare earth elements, Turkey supplied 98% of the Boron, and South Africa supplied 71% of the platinum. Boron in particular plays a defining role in tank armour and missile propulsion.

Nor is it just minerals where the EU is hostage to its peers. Much of the advanced weaponry currently fielded by European armies is either wholly American - like the F-35 fighter jet - or contains key American components - like the Gripen, which uses a US-made engine.

Not so long ago, this wasn’t seen as a particularly big deal. Indeed, when European countries started shutting down their defense industrial bases, one of the common arguments was that it was easier to simply “buy American.”

All that changed, though, with Donald Trump’s return to power. Barely had the first serious disagreement broken out between the White House and Brussels before rumors were flying around about an F-35 “kill switch” the US could use to disable most of Europe’s airforces.

And while there’s no solid evidence of a command prompt that could turn an F-35 off mid-flight, that almost doesn’t matter. If it chose to, the Pentagon could deny European F-35s essential updates to their computers, or restrict access to critical spare parts. As a result, the readiness and capabilities of an F-35 squadron belonging to a nation that the US no longer considers a friend can be degraded to a point where it might as well go back to fourth-generation fighters.

The reliance on American kit is something that could be overcome in time. By reactivating its defense industrial base, Europe could eventually find itself in a position to build its own fighter jets using only European-made parts.

But this would be only half the battle. Much harder, would be to find alternatives to the supply chain monopoly of countries like China.

That’s not to say Brussels isn’t trying. The EU has launched several political, diplomatic and financial efforts to increase “Strategic Autonomy” (SA). SA is defined as the EU's capacity to act autonomously – that is, without being dependent on other countries – in strategically essential policy areas, which include defence. Or, to put it in layman’s terms, the ability for Europe to do what it wants, when it wants, without having to worry about irritating some foreign autocrat.

The complexities of adopting such a strategy across the supply chain (from raw materials to systems) could fill several novels. But the biggest one - the War and Peace of European SA - would be the one that dealt with two key problems: the lack of access to resources, and the fierce competition between defense on one hand, and Europe’s green transition on the other.

The Critical Raw Minerals Act

Say what you like about the European Commission: no-one can accuse them of thinking small. Over the coming years, the continent is supposed to not just transition to renewable energy, but also transform its digital infrastructure, revitalize its aerospace sector, and also boost its defense capabilities.

But while these might seem like separate goals, nearly all of them require access to the same critical raw materials. This would push up competition - and prices - at the best of times, and these are far from the best of times. With geopolitical competition increasing, sources of critical raw materials are expected to get harder and harder to obtain.

This is where the Critical Raw Materials Act comes in. Introduced in 2024, the act has essentially two pillars: one categorises which resources are critical, and the other aims to secure a resilient supply chain for these resources.

CRM’s are defined as being of high economic importance and susceptible to a high risk of supply disruption due to the concentration of sources and the lack of good, affordable substitutes. This means that the list can change as CRM’s are either added or removed, depending on how supplies and technology evolve. As of the time of writing, there are 34 CRMs, 17 of which have the additional categorisation of Strategic Raw Material; these are materials that not only meet the definition above but are also predicted to have a significant supply gap, as current production and processing will struggle to keep up with demand. An example of an SRM is Lithium, due to its importance in batteries.

The second pillar details goals to increase the EU’s self-reliance. 2030 objectives include:

• A minimum of 10% of the EU’s annual consumption needs to come from EU extraction.

• At least 40% of the EU’s consumption should come from EU processed CRMs.

• 25% of the EU’s consumption needs to be sourced through domestic recycling.

• No third country should provide more than 65% of the Union’s SRMs at any relevant stage of the processing.

The act envisions the EU not becoming a CRM autarky, but constructing a web of supply chains that prohibit any one country or group of countries from having too much power over the EU’s economy, which is essentially its lifeblood. Achieving the Act’s goals, however, does come with its issues - some of which will be wearyingly familiar to anyone with knowledge of that most-European of traditions: wrapping everything in reams of red tape.

From Brussels, With Love

On paper, one might reasonably assume that the EU has everything it needs to stand alone. Lithium, for example, is a key ingredient in batteries and power supplies, which play a crucial role on numerous platforms, such as FREMM frigates and the F-35. EU member Portugal is known to have substantial deposits, but to the surprise of no Europeans, opening and expanding mines in the Barroso region is a political and bureaucratic nightmare.

The mining company Savannah acquired and developed the project in 2017. After a tug of war between it and several Portuguese governments that have come and gone, as well as multiple environmentalists and agricultural groups, the mine is expected to start producing in 2026 or 2027. Different versions of this story repeat themselves across the EU:

• Kiruna in Sweden is believed to have the largest deposits of rare earth oxides in Europe. Protests and clashes have erupted over the displacement of the native Sami people, who have a noticeable presence in the Swedish parliament.

• In 2022, Finland amended the Mining Act to make it more sustainable. This provides additional obstacles to opening a mine.

• In 2024, an EU-backed lithium mine in Serbia faced significant backlash from locals and environmentalists.

Europe’s long-standing aversion to mining, as evidenced by its high environmental and societal protection laws, has led to the industry suffering from lengthy permitting processes, low public acceptance, a lack of skilled workers, and difficulty in attracting investments. Simply put, opening a mine in Europe is expensive, time-consuming, and liable to have environmentalists pushing pins into a voodoo doll likeness of you. To ask the obvious question: why would any CEO bother?

Recycling critical raw materials could potentially provide a slight reprieve. While the EU is relatively efficient in metals such as copper and tungsten, its ability to recycle rare earth metals remains minimal. While new technologies and methodologies are set to remedy this, even with the best estimates, recycling will not be able to keep up with demand for the EU’s 2030 goals.

So, if creating a purely European defense industrial base is out of the question, that leaves just one option: reroute supply chains through nations that are unlikely to throw a hissy fit and pull the plug. As with everything, though, that’s easier said than done.

With Friends Like These…

Going forward, the EU will have to make its deals with resilience and Geopolitics in mind. This means in practice that the supply chains the EU creates will need to be able to bend without breaking whenever an angry autocrat decides to apply pressure.

The most-sensible way to do this is by dispersing the sources of raw materials in a way that no one nation, or group of nations, is given the power to affect the EU’s strategic autonomy. There is no point working overtime to remove China’s influence from the supply chain if all that influence is instead transferred to Brazil.

Yet out-sourcing CRM mining to other nations comes with its own challenges, first and foremost, a sense of hypocrisy and neo-colonialism. Serbia’s lithium mine plans have become a high-tension point for the nation, sparking one of the largest grass-roots protests in its history. It was touted as $2.4 billion investment in the country; however, the local narrative wound up being less “wonderful Brussels is investing in our beloved nation,” and more “those Belgian bastards are out to ruin our landscape”. Even the EU’s promises of imposing the strictest standards couldn’t satisfy protesters. If the bloc can’t deal with Portuguese NIMBYs within its own borders, how is it supposed to handle “resource diplomacy”?

Looking further afield to Asia and Africa, the EU would have to contend with nations afflicted by the “resource curse”. The “resource curse” is essentially a rule of thumb that nations that overly rely on natural resources tend to develop weak economies, government institutions, and democracies, such as the DRC. Weak government institutions mean that mining companies must rely on corruption and force to operate in those nations, which is why some of them resort to hiring Private Military Firms. On the other hand, it also means that those working in the mines or affected negatively by the mine's operation would not have the appropriate legal recourse to fight back for their rights.

This effectively means that EU values can, in theory, end at its borders if the poor working and living conditions don’t strike a chord with EU public sentiment. In the long run, this lack of awareness can cost dearly, as it fuels the migration crisis that the EU constantly faces. Alternatively, EU nations can impose strict rules on companies operating in Africa… only to wind up being resented by local leaders. It’s not for nothing that China and Russia have made headway on the continent by offering weapons and expertise without a lecture on human rights.

A final layer of complexity is added when one recognizes that China, Russia, and even potentially the US are all competing for these same critical rare earth materials through more “kinetic” means. Perhaps the most well-known example is Russia's use of mercenaries to secure mines in Mali, a francophone nation. And while Moscow’s Malian adventure is panning out to be a disaster for Mali’s junta, it is still denying Europe access to the mines it so desperately needs.

At the end of the day, each kilogram of CRM denied is a kilogram missing on the latest sensor for a tank, jet fighter, ship, or satellite. Making the EU that much more vulnerable.

While the way to solve these issues is way beyond the capability of this article, the above highlights just some of the difficulties the EU will face in sustaining its war production, digitisation, and green energy transformation, furthermore, it is paramount to recognise that these efforts are not happening in a vacuum and that other geopolitical interests are at play.

The End Goal

No EU defence company wants to be in a position where it can’t fulfil an emergency order of Anti-Air Radar systems amid rising tensions because it has no Gallium or any other critical resource. If China were to go all in and suddenly support Russia by limiting the EU’s access to Gallium, a situation similar to this might become a reality.

In some ways, perhaps even reluctantly, the precarious position the EU finds itself in with CRM’s is forcing it to start acting as the main power in a multi-polar world and stand on its own two feet, but how much of its core values it is willing to compromise while doing so remains in the air.

By definition, a multipolar world means that power will be shared more equitably, rather than being concentrated in a single superpower. This invariably means a more chaotic and competitive world. At the same time, Europe's geography, resources, and economy mean that Autarky, especially when relating to critical resources, is not a viable option. The EU provides a path of some level of economic and defence security and power that would not be achievable by many of its members alone. Moving forward, we can expect to see more pan-European initiatives. While there are certainly arguments that can deny or minimise this, one thing is certain: The EU is going to be forced to evolve. The alternative is to spend the 21st Century with the feet of other powers forever hovering above its neck, unable to act for fear of upsetting Beijing, Moscow, Washington, or even Ankara or Brasilia. In short, if the bloc wants to be a serious modern power, it will have to start acting like one.

(Ends)

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