EU to invest $2bn to challenge China in Rare Earth Minerals sector

Brussels/Beijing: – Europe has initiated steps to reduce its dependence on China for Rare Earth Minerals. The group, ‘European Raw Materials Alliance’, has recommended an investment of $2 billion in this sector. This group has been formed by the European Union. Besides, the group also pointed out that the European countries are heavily dependent on China for Rare Earth Minerals.

China is known as the largest producer of Rare Earth Minerals used in smartphones, computers and electric vehicles. Last year, China had more than 80% share of the rare earth minerals market. Earlier, analysts pointed out that China could use it to hold the world at ransom for its political motives. The United States has launched efforts to challenge Chinese dominance, which also include the Rare Earth Initiative. Nine countries have participated in it. Following the United States, Europe is now making efforts for the same.

Coronavirus outbreak disrupted production and supply in China. Against this background, efforts are being made to change the global ‘supply chain model’. As part of this effort, the European Union established the European Raw Materials Alliance. The group has submitted its report with recommendations, which include an investment of $2 billion.

The European Union has recommended 14 schemes for Rare Earth Minerals’ sectors to manufacture magnetic products. The report mentions the ‘green and digital transition’ of Europe as an indicator of the heavy dependence of European countries on China. The European Union has expressed a concern that China may use its ‘Rare Earth Minerals’ for Chinese industries alone in the future. Therefore, the European Raw Materials Alliance has suggested that the European countries explore alternative sources of Rare Earth Minerals in other countries.

The European Union’s report and the recommendation for an investment of $2 billion clearly indicate that relations between European countries and China are not as good as before. Only last month, the European Parliament also decided to strengthen ties with Taiwan. Earlier, an investment agreement with China also had been deferred.

Against this background, the steps taken by the European Union to reduce the import of Rare Earth Minerals from China draws attention.