Europe needs rare earths. It needs them for its industrial base, for the transition to green technology and to propel its defence sector to face the threats of the 21st century.
But China controls the supply, from mining, to processing, to refining and all the way through to the end use stage.
Beijing has begun to wield this strategic influence by introducing strict export controls on seven specific rare earths and related rare earth magnets. Rare earth magnets are alloys or mixtures of certain rare earths which produce magnets sought after by practically every high-end industry.
China introduced the controls in response to US President Donald Trump's tariffs back in April, and Europe is included because of the risk of it selling them on to the US. While some of the controls are gradually easing, their introduction has reminded Europe of its reliance on China for critical minerals. As part of the easing of controls, Beijing is requesting sensitive information from European companies about exactly how they will use any rare earths they purchase.
Europe once was able to produce rare earths and critical minerals of its own, but it turned its back on mining decades ago, because it was willing to accept China's dominance of a highly-polluting and expensive sector. Now that global trade has become more complicated, Europe is considering if it can develop its own rare earths sector as a strategic, rather than strictly commercial, concern.
Yet there are huge question marks over Europe's capacity and willingness to do so. This episode of Business Beyond looks at how China conquered the rare earths market and left Europe and the US scrambling.
For more on this series, follow this link.