This opinion piece by Joris Teer was originally published in Dutch in EW on 27 May 2025 under the title ‘Minister Brekelmans: red Europa, investeer in mijnbouw!’. It is reproduced here in English with the permission of EW.
‘For want of a nail, the shoe was lost; For want of a shoe, the horse was lost; For want of a horse, the rider was lost; For want of a rider, the battle was lost; For want of a battle, the Kingdom was lost, And all for the want of a horseshoe nail.’
This poem has been attributed to various authors over the last thousand years. The message is as relevant as ever: in a time of great geopolitical tensions, production disruptions can prove fatal. Deterring an increasingly aggressive Russia (without the Americans, if necessary) requires European countries to quickly build new weapons systems and munitions.
However, our supply chains are infinitely more complex than in medieval times. 35 years of hyper globalisation have made our armed forces dependent on Beijing. Our Achilles heel: China mines and/or processes more than 50% of 19 of the 34 raw materials the European Commission designates as essential. For several key defence materials, this percentage is far higher. Beijing refines 100% of all heavy rare earth metals, 98% of all gallium, 93% of all germanium, and 82% of all bismuth worldwide. For our rearmament to succeed, European defence ministers must allocate billions to break China's chokehold on these essential building blocks. Japanese and American taxpayers have contributed to that goal already for over a decade.
Raw materials are the skeleton of our manufacturing industry. Without them, there are no satellites, radar systems, communication networks, computer chips, tanks, batteries, artillery ammunition, grenades, fighter jets, drones, frigates, submarines, MRI scanners or AI chips. European companies and governments prioritised cost efficiency and just-in-time supply chains for decades. Mining fell out of fashion: no business case, too disruptive to local populations, and too much emission of CO2.
Beijing, on the other hand, increased its control over economically low value-added but strategically indispensable industries for decades. The country made no secret of its ambitions. In Made in China 2025, Xi's ambitious industrial policy, the Chinese government wrote: Modern history shows that “without a strong manufacturing industry, there will be no country and no nation.” In the first year of the Covid pandemic, Xi called on his government to ‘tighten international production chains' dependence on China.’
Europe will not escape unscathed if China leverages its critical raw material dominance to retaliate against the US.
Beijing's state support for mining in China and abroad and for domestic resource processing has squeezed competitors out of the market. In response to US-led curbs on technology transfer to China and Trump's import tariffs, Beijing now requires export licences for more and more raw materials, – including, crucially, heavy rare earths.
Europe will not escape unscathed if China leverages its critical raw material dominance to retaliate against the US, for example to increase pressure in the trade war. China's magnets are essential components of US weapons systems, including jet fighters, which we also use. In addition, Beijing may well conclude that a targeted boycott against only the US will not be effective. A share of Chinese raw materials would still reach US defence companies via third countries. This gives China a reason to radically reduce or completely stop raw material exports to almost all countries.
Already, western defence industries are struggling with production problems. Dutch Minister of Defence Brekelmans says it is difficult to even spend 2% on defence. The reason: it takes ‘years before new weapons systems are delivered.’ NATO Secretary-General Rutte hammers on the need for all allies to scale up production. Merely a reduction in China's raw material supplies could lead to dangerous shortages.
Increased defence spending finally gives European countries resources to protect our security. Announced military-civilian initiatives for greater weapons systems production and technology development are essential, but not enough. Military-technological superiority and secure supply chains are two sides of the same coin: both are needed to keep aggressive states in check.
Leveraging defence budgets is essential to make critical raw material production in Europe and partner countries financially viable. The US is demonstrating how this can be done. In response to China's rare-earth export boycott against Japan in 2010, the Pentagon invested in reopening a mine in California.
This mine extracts 12% of all rare earths worldwide. The Pentagon has announced that by 2027 it will have established a full magnet production chain covering the entire needs of the US military. General Motors and other manufacturers should start using these US-produced magnets in their cars by the end of 2025. The trend is clear: defence money gets commodity production going and off-take by private companies keeps it going.
Europe is in danger of remaining addicted to cheap Chinese supply until it is too late.
The EU’s current plans to mine rare earths again will not really bear fruit until the mid-30s and only if a lot of additional investment is made now. Initial steps have been taken in processing and magnet production, but there are also 18 other Chinese-dominated raw materials. Our dilemma: the Americans are better positioned to secure raw materials, but we trust them less and less.
Fortunately, other partners are also investing. The Japan Organisation for Metals and Energy Security (JOGMEC), an executive arm of the Japanese government, is successfully supporting rare earth mining by Lynas, an Australian mining company. Japan, meanwhile, produces permanent magnets. These are hardly ever bought because buyers, for example European producers of wind turbines and electric cars, prefer to use cheap subsidised Chinese magnets while they still can. As a result, Europe is in danger of remaining addicted to cheap Chinese supply until it is too late.
European defence spending can help the Japanese turn the tide, including by financially supporting JOGMEC to produce raw materials both inside and outside Europe. Likewise, they should commit to using more expensive Japanese and eventually European magnets in European weapon systems.
Without public investment in raw material production, the new Brussels defence mantra ‘Buy European!’ could end up meaning ‘Don’t buy anything at all!’. Until Europe addresses this problem, one thing is certain: China can pull the rug out from under our rearmament and other critical sectors at any time.
