European Union seeks to reduce critical raw material dependence on China

The European Union is facing a strategic challenge in its efforts to reduce dependence on Chinese processing and refining of critical raw materials (CRMs) such as lithium, cobalt, and rare earths. As Brussels enters negotiations for its 2028–2034 Multiannual Financial Framework, experts suggest that securing these supply chains will require significant financial investment beyond mere resource extraction.

While the EU has sought to diversify sources by engaging with nations in Africa, Asia, and Latin America, many resource-rich countries are demanding more than just mining rights. These nations increasingly seek technology transfers and the establishment of local processing facilities to capture more value within their own economies. Current EU strategic projects in countries like Brazil, Kazakhstan, and South Africa have been criticized for focusing primarily on extraction rather than local industrial development.

Failure to provide the necessary funding and technical support for local processing could undermine the EU's credibility with international partners. Without substantial investment to help resource-rich nations build domestic capacity, these countries may continue to favor China, which currently dominates key segments of the value chain, including graphite processing and cobalt sulfate production.