November 12, 2025
November 12, 2025
Change of perspective: Europe’s lesson from China’s rare earth success
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Executive Summary
Learning curve in fast motion: China has translated European impulses into speed, vertical integration, and scaling—and established an independent industrial and technological position
REE as a blueprint: For Rare Earth Elements (REE), China controls ~69% of mining, 85–90% of processing, and >90% of NdFeB magnet production; Europe is heavily dependent in processing and recycling
Relevance for key industries: Electromobility, wind energy, robotics, and electronics are driving demand; an EV requires approx. 1–2.5 kg of NdFeB magnets, an offshore turbine several hundred kilograms
European framework: The CRMA targets 10% extraction, 40% processing, 25% recycling, and ≤65% dependence on any single third country by 2030—ambitious, but achievable with faster approvals, integration, and market development
Implementation mode: Europe needs faster decisions and reliable offtake contracts—long-term purchase agreements that give producers planning security. Together with Mining 4.0 and digital excellence, this strengthens resilience
From the IAA to Chengdu – learning in cycles
When I started my career at Mannesmann Sachs AG (now ZF Friedrichshafen AG) 26 years ago, the first steps were small—such as benchmarking vehicles at the IAA, back then still in Frankfurt, as part of learning about new technologies.
Even back then, Asian—and in particular Chinese—automobile manufacturers showed great interest in adopting Europe’s outstanding quality standards and innovation approaches and gradually integrating them into their own development. This mutual inspiration formed the basis of a lively competition that has shaped the automotive industry worldwide at an ever faster pace.
Today, Chinese industry as a whole is characterized by consistent vertical integration, rapid scaling, and technology-enabled process innovation.
My impressions from a recent visit to Chengdu, China, confirm this: high industrial output, a clear design language, high manufacturing quality, and strong software innovation in local car brands. At the same time, European premium brands are still regarded as luxury in China—synonymous with quality and design.
The two regions therefore have different strength profiles: China scores with operational excellence, close coordination between government and industry, and speed; Europe with precision, quality, and the trust it has built up over decades.
Against this background, the example of rare earths shows how closely complementary strengths are linked to strategic dependencies—and what this means for Europe.
Rare earths as an example of strategic dependencies
Global concentration
Mining: China accounts for ~69% of global production
Processing/separation: ~85–90% of capacity is located in China
NdFeB (neodymium-iron-boron) magnet production: >90% in China
Demand drivers and input volumes – main drivers: electromobility, wind energy, robotics/automation, electronics
Application: An EV with a permanent-magnet motor requires approx. 1–2.5 kg of NdFeB magnets; an offshore wind turbine several hundred kilograms
Trend: Magnet applications are growing dynamically; bottlenecks lie mainly in separation and metallization—central for electric motors, sensors, and medical technology
European situation: The EU currently processes <1%, recycles <1%, and is more than 90% dependent on imports. China dominates the global rare-earth markets with approx. 70% of mining and 90% of processing. The USA holds 6% of reserves, 15% of mining, and 21% of recycling; Australia 4% of reserves, 20% of mining, and <1% of recycling
Regulatory framework: The EU Critical Raw Materials Act (CRMA) sets targets for 2030—10% extraction, 40% processing, 25% recycling, ≤65% dependence on any single third country
Scaled European production capacities are realistic from 2030 at the earliest; from around then, LKAB in Sweden will be able to produce on a long-term basis. Processing capacities will grow with pilot plants in France and Poland by 2027–2030. Recycling plants such as Heraeus Remloy in Germany are already starting up, with expansion to significant volumes expected by 2030. Permits, infrastructure, and environmental regulations extend development times to 10–15 years. Until then, recycling, innovation, and international partnerships—especially with China—remain essential
How Europe can learn from the Chinese success model
China controls rare-earth mining and processing so dominantly because it systematically applies speed, vertical integration, and market control as strategic principles. Europe can learn from this and accelerate approval procedures in a binding way—for example, by introducing fixed deadlines and “one-stop” contact points to reduce bureaucratic hurdles.
In addition, projects in China are bundled in clusters that cover the entire value chain—from raw material extraction, processing, and metallurgy to magnet production. Europe is pursuing similar goals with the Critical Raw Materials Act (CRMA), but faces the challenge of implementing them more quickly in practice.
In China, binding multi-year offtake agreements with OEMs create investment security and production volumes. Europe is currently expanding such partnerships in order to scale capacities more efficiently and reduce costs.
Digitalization and data-driven process control (“Mining 4.0”) are driving efficiency and sustainability in China. Europe should increasingly promote innovation and cooperation in these areas in order to catch up with China’s dominant competitive position.
For Europe, independently securing critical raw materials is essential in order to develop and operate future technologies on its own terms—this is the only way to ensure technological sovereignty and competitiveness in the long term.
Resilience through focus, speed, and digital appeal
Global cycles are shifting—not just in REE, but along many industrial and digital value chains. Europe’s task is to combine precision, quality, and sustainability with speed, scaling, and digital excellence.
This means setting priorities, securing capacities early and sufficiently, reducing regulatory friction—and making the ecosystems between industry, research, and capital market-ready. This creates resilience that goes beyond individual raw-material issues—and secures Europe’s role as a leading industrial and digital location in the next cycle.
In this case, speed is the best strategy.
FAQ
What does REE mean? Rare Earth Elements—15 lanthanides plus scandium and yttrium; important for high-performance magnets (NdFeB), catalysts, and electronics, among other things
What are NdFeB magnets? Neodymium-iron-boron magnets with high energy density; key components in electric drives, wind-turbine generators, robotics, and electronics
Why are offtake contracts important? They ensure predictability for producers (bankability) and security of supply for buyers (OEMs, Tier 1). Typical features: multi-year terms, price formulas, quality criteria
Glossary
REE: Rare Earth Elements
EV: Electric Vehicle
NdFeB: Neodymium-iron-boron magnets—very strong permanent magnets
CRMA: EU Critical Raw Materials Act—the EU framework for critical raw materials
LKAB: Luossavaara-Kiirunavaara Aktiebolag, a Swedish state-owned mining company
Offtake contract: Long-term purchase agreement with defined quantities and prices
PCF: Product Carbon Footprint—the CO₂e footprint of a product
References & resources on the topic
EU documents on the Critical Raw Materials Act (CRMA) – commission.europa.eu
European Critical Raw Materials Act
The European Critical Raw Materials Act is an initiative of the European Commission to ensure a sustainable and secure supply of critical raw materials in the EU.
commission.europa.eu
European Critical Raw Materials Act
The European Critical Raw Materials Act is an initiative of the European Commission to ensure a sustainable and secure supply of critical raw materials in the EU.
Background article on rare earths/REE – www.enbw.com
All about rare earths | EnBW
Rare earths are essential raw materials for modern technologies such as electromobility and wind energy.
Europe’s rare-earth/REE deposits – www.deutschlandfunk.de
Sweden – What the largest discovery of rare earths means for Europe
The largest known deposit of rare earths in Europe to date has been discovered in northern Sweden. The state-owned mining company LKAB speaks of more than one million tons of metals. The discovery is also likely to have consequences for Europe’s raw-material independence and the energy transition.
Listen to this article
Executive Summary
Learning curve in fast motion: China has translated European impulses into speed, vertical integration, and scaling—and established an independent industrial and technological position
REE as a blueprint: For Rare Earth Elements (REE), China controls ~69% of mining, 85–90% of processing, and >90% of NdFeB magnet production; Europe is heavily dependent in processing and recycling
Relevance for key industries: Electromobility, wind energy, robotics, and electronics are driving demand; an EV requires approx. 1–2.5 kg of NdFeB magnets, an offshore turbine several hundred kilograms
European framework: The CRMA targets 10% extraction, 40% processing, 25% recycling, and ≤65% dependence on any single third country by 2030—ambitious, but achievable with faster approvals, integration, and market development
Implementation mode: Europe needs faster decisions and reliable offtake contracts—long-term purchase agreements that give producers planning security. Together with Mining 4.0 and digital excellence, this strengthens resilience
From the IAA to Chengdu – learning in cycles
When I started my career at Mannesmann Sachs AG (now ZF Friedrichshafen AG) 26 years ago, the first steps were small—such as benchmarking vehicles at the IAA, back then still in Frankfurt, as part of learning about new technologies.
Even back then, Asian—and in particular Chinese—automobile manufacturers showed great interest in adopting Europe’s outstanding quality standards and innovation approaches and gradually integrating them into their own development. This mutual inspiration formed the basis of a lively competition that has shaped the automotive industry worldwide at an ever faster pace.
Today, Chinese industry as a whole is characterized by consistent vertical integration, rapid scaling, and technology-enabled process innovation.
My impressions from a recent visit to Chengdu, China, confirm this: high industrial output, a clear design language, high manufacturing quality, and strong software innovation in local car brands. At the same time, European premium brands are still regarded as luxury in China—synonymous with quality and design.
The two regions therefore have different strength profiles: China scores with operational excellence, close coordination between government and industry, and speed; Europe with precision, quality, and the trust it has built up over decades.
Against this background, the example of rare earths shows how closely complementary strengths are linked to strategic dependencies—and what this means for Europe.
Rare earths as an example of strategic dependencies
Global concentration
Mining: China accounts for ~69% of global production
Processing/separation: ~85–90% of capacity is located in China
NdFeB (neodymium-iron-boron) magnet production: >90% in China
Demand drivers and input volumes – main drivers: electromobility, wind energy, robotics/automation, electronics
Application: An EV with a permanent-magnet motor requires approx. 1–2.5 kg of NdFeB magnets; an offshore wind turbine several hundred kilograms
Trend: Magnet applications are growing dynamically; bottlenecks lie mainly in separation and metallization—central for electric motors, sensors, and medical technology
European situation: The EU currently processes <1%, recycles <1%, and is more than 90% dependent on imports. China dominates the global rare-earth markets with approx. 70% of mining and 90% of processing. The USA holds 6% of reserves, 15% of mining, and 21% of recycling; Australia 4% of reserves, 20% of mining, and <1% of recycling
Regulatory framework: The EU Critical Raw Materials Act (CRMA) sets targets for 2030—10% extraction, 40% processing, 25% recycling, ≤65% dependence on any single third country
Scaled European production capacities are realistic from 2030 at the earliest; from around then, LKAB in Sweden will be able to produce on a long-term basis. Processing capacities will grow with pilot plants in France and Poland by 2027–2030. Recycling plants such as Heraeus Remloy in Germany are already starting up, with expansion to significant volumes expected by 2030. Permits, infrastructure, and environmental regulations extend development times to 10–15 years. Until then, recycling, innovation, and international partnerships—especially with China—remain essential
How Europe can learn from the Chinese success model
China controls rare-earth mining and processing so dominantly because it systematically applies speed, vertical integration, and market control as strategic principles. Europe can learn from this and accelerate approval procedures in a binding way—for example, by introducing fixed deadlines and “one-stop” contact points to reduce bureaucratic hurdles.
In addition, projects in China are bundled in clusters that cover the entire value chain—from raw material extraction, processing, and metallurgy to magnet production. Europe is pursuing similar goals with the Critical Raw Materials Act (CRMA), but faces the challenge of implementing them more quickly in practice.
In China, binding multi-year offtake agreements with OEMs create investment security and production volumes. Europe is currently expanding such partnerships in order to scale capacities more efficiently and reduce costs.
Digitalization and data-driven process control (“Mining 4.0”) are driving efficiency and sustainability in China. Europe should increasingly promote innovation and cooperation in these areas in order to catch up with China’s dominant competitive position.
For Europe, independently securing critical raw materials is essential in order to develop and operate future technologies on its own terms—this is the only way to ensure technological sovereignty and competitiveness in the long term.
Resilience through focus, speed, and digital appeal
Global cycles are shifting—not just in REE, but along many industrial and digital value chains. Europe’s task is to combine precision, quality, and sustainability with speed, scaling, and digital excellence.
This means setting priorities, securing capacities early and sufficiently, reducing regulatory friction—and making the ecosystems between industry, research, and capital market-ready. This creates resilience that goes beyond individual raw-material issues—and secures Europe’s role as a leading industrial and digital location in the next cycle.
In this case, speed is the best strategy.
FAQ
What does REE mean? Rare Earth Elements—15 lanthanides plus scandium and yttrium; important for high-performance magnets (NdFeB), catalysts, and electronics, among other things
What are NdFeB magnets? Neodymium-iron-boron magnets with high energy density; key components in electric drives, wind-turbine generators, robotics, and electronics
Why are offtake contracts important? They ensure predictability for producers (bankability) and security of supply for buyers (OEMs, Tier 1). Typical features: multi-year terms, price formulas, quality criteria
Glossary
REE: Rare Earth Elements
EV: Electric Vehicle
NdFeB: Neodymium-iron-boron magnets—very strong permanent magnets
CRMA: EU Critical Raw Materials Act—the EU framework for critical raw materials
LKAB: Luossavaara-Kiirunavaara Aktiebolag, a Swedish state-owned mining company
Offtake contract: Long-term purchase agreement with defined quantities and prices
PCF: Product Carbon Footprint—the CO₂e footprint of a product
References & resources on the topic
EU documents on the Critical Raw Materials Act (CRMA) – commission.europa.eu
European Critical Raw Materials Act
The European Critical Raw Materials Act is an initiative of the European Commission to ensure a sustainable and secure supply of critical raw materials in the EU.
commission.europa.eu
European Critical Raw Materials Act
The European Critical Raw Materials Act is an initiative of the European Commission to ensure a sustainable and secure supply of critical raw materials in the EU.
Background article on rare earths/REE – www.enbw.com
All about rare earths | EnBW
Rare earths are essential raw materials for modern technologies such as electromobility and wind energy.
Europe’s rare-earth/REE deposits – www.deutschlandfunk.de
Sweden – What the largest discovery of rare earths means for Europe
The largest known deposit of rare earths in Europe to date has been discovered in northern Sweden. The state-owned mining company LKAB speaks of more than one million tons of metals. The discovery is also likely to have consequences for Europe’s raw-material independence and the energy transition.
