On 28 January, the EU27 authorised (see EUROPE 13796/15) the European Commission to negotiate a Memorandum of Understanding (MOU) with the United States on critical raw materials. On Wednesday 4 February in Washington, Stéphane Séjourné was able to officially announce the formation of a new alliance on critical minerals with the United States and Japan. These announcements were made during an international meeting convened by US Secretary of State Marco Rubio.
“The European Union, the United States and Japan are now taking significant steps towards increasing their economic security and national security by jointly enhancing resilience in critical minerals supply chains. They have announced their intention to expedite cooperative efforts for a mutually beneficial Partnership, with two components”, the countries said in a joint statement.
This partnership includes a commitment to conclude a Memorandum of Understanding between the EU and the US within the next 30 days to strengthen the security of critical mineral supply chains.
The forthcoming Memorandum of Understanding will identify areas of cooperation to stimulate demand and diversify supply for both participants by identifying and supporting projects in mining, refining, processing, and recycling. It will also include discussion of measures to prevent supply chain disruptions, promote research and innovation efforts, and facilitate the exchange of information on stockpiling, the statement added.
The leaders of the United States and Japan signed a Framework Agreement for Securing the Supply of Critical Minerals and Rare Earths last October.
The three partners will also develop Action Plans and explore a plurilateral trade initiative with like-minded partners on critical minerals trade. Such an initiative could include exploring the development of coordinated trade policies and mechanisms, such as border-adjusted floor prices, standards-based markets, price gap subsidies, or offtake-agreements.
For the European Commission, which in recent months has resumed work and contacts with the US administration on this MOU, the aim is to forge alliances to break the dependence on China for critical minerals.
In the complex context of transatlantic relations, the document was also of interest to the EU in terms of establishing positive partnerships with Washington and a clear channel of communication, whereas in recent months the United States has opted instead to contact specific member countries bilaterally to work on the Critical Materials Alliance.
While the European Commission has put in place new measures to diversify its supplies of strategic raw materials, including the Critical Material Act, MOUs with some fifteen third countries and, soon, the European Raw Materials Centre, responsible for joint purchasing, the United States this week unveiled a gigantic supply plan.
To reduce their dependence on China, they also want to create a reserve of rare earths worth $12 billion to be used in strategic industries such as the automotive, digital, and defence industries. An alliance of willing countries could help contribute to this reserve.
According to AFP, the American representatives had indicated that they expected a large number of agreements to be signed at this meeting.
This EU-Washington mechanism, which would join the other arrangements the EU has with countries such as Brazil, Japan, South Korea and Australia, would have the advantage of enabling joint projects for access to raw materials, making mining projects economically viable and allowing reasonable purchase prices, for example, with a floor price system, as Washington would like.
For the Commission, the possible partnership with the United States will in any case have to take care not to align the two parties on the same projects and “define ways of complementing each other”, explained a European source on 3 February. “One example is a mine in Australia from which we and the United States obtain supplies. One of the ideas for maintaining this channel for discussion and cooperation is therefore to coordinate when we are looking for the same suppliers”.
Alternative technologies. The partnership with the United States could also cover new technologies for the circular economy and substitution, in addition to coordination in terms of supply.
The aim would be to recycle more materials in order to reduce extraction and to work on alternative technologies, continued this source, for example to do without the permanent magnets that power electric motors which China now has a stranglehold over.
The country dominates the global market for rare earths and permanent magnets, controlling around 60% of extraction, over 90% of refining and 94% of magnet manufacture in 2025. (Original version in French by Solenn Paulic)