In the shadow of the war in Ukraine the EU fears that Beijing may use its rich and valuable rare earth deposits as a “weapon”. The European Commission will present a new plan to wean the EU off China for strategically important raw materials, President Ursula von der Leyen announced on Saturday.

According to Politico, the EU executive warned of “a clear acceleration and escalation in the way interdependencies are exploited and instrumentalized,” in a speech at a Berlin conference.

In recent months, China has tightened export controls on rare earths and other critical materials. The Asian superpower controls almost 70% of the world’s rare earth production and almost all of its refining.

The EU’s response “must correspond to the scale of the risks we face in this area,” von der Leyen pointed out, adding that “we are focused on finding solutions with our Chinese counterparts.”

Brussels and Beijing are set to discuss the issue of export controls during meetings next week.

“However, we are prepared to use all the tools at our disposal to react if necessary,” warned the head of the EU executive.

This statement hints that the Commission could use the EU’s most powerful trade weapon – the Anti-Coercion Instrument.

The development comes after French President Emmanuel Macron called on the Commission to activate the “trade bazooka” at last Thursday’s meeting of EU leaders. His effort has not found much support from other European leaders.

RESourceEU project

To “break” the EU’s over-reliance on China for imports of strategic minerals, the Commission will present a “RESourceEU plan”, von der Leyen said.

He did not provide many details about the plan, nor when it will be unveiled. But he noted that it would follow a similar model to the REPowerEU plan introduced by the Commission in 2022 to phase out dependence on Russian fossil fuels after Moscow’s illegal invasion of Ukraine.

Under REPowerEU, the Commission proposed investing €225 billion to diversify energy supply routes, accelerate the deployment of renewable energy sources, improve grid interconnections across the EU and strengthen the EU hydrogen market, among other measures. The EU executive also submitted a legislative proposal, currently under negotiation with the European Parliament and the Council, to ban Russian gas imports until the end of 2027.

The aim of RESourceEU “is to ensure access to alternative sources of critical raw materials in the short, medium and long term for our European industry”, explained the President of the Commission. “It starts with the circular economy. Not for environmental reasons. But for the utilization of critical raw materials that are already contained in the products sold in Europe,” he said.

He added that the EU “will accelerate work on critical raw materials partnerships with countries such as Ukraine and Australia, Canada, Kazakhstan, Uzbekistan, Chile and Greenland.”

“Europe can no longer do things the same way. We learned this lesson the hard way with energy. We will not repeat this with critical minerals” von der Leyen clarified.