The United States is outspending Europe in the race to secure critical minerals outside China, raising concerns that European manufacturers could remain dependent on Chinese supplies, The Wall Street Journal reported late Thursday.
Washington has committed about $46 billion to critical raw materials projects over the past five years through grants, loans and tax incentives – roughly eight times the amount allocated by the European Union, citing an analysis by the French Institute of International Relations.
The US has also negotiated preferential access to mineral resources in countries including the Democratic Republic of Congo and Ukraine while backing overseas projects through financing programs.
Disruption
The aggressive US strategy has already disrupted European efforts, the Journal said. London-based rare earth developer Pensana (LON: PRE), which is developing the Longonjo project in Angola, shifted plans for a processing plant from Britain to the US to pursue Export-Import Bank financing.
Privately held Brazilian rare earth producer Serra Verde, which operates a rare earth mine in Goiás state, secured US government-backed financing and later agreed to sell its magnetic rare earth production under a long-term arrangement supported by Washington.
European industry leaders told the newspaper they fear the US could dominate emerging non-Chinese supply chains. Pensana founder Paul Atherley described it as like friendly fire to other Western countries.
The European Union is responding with plans for a €3-billion ($3.4billion) financing hub, strategic stockpiles and partnerships with countries including Canada, Argentina, Norway and South Africa. By 2030, the bloc aims to ensure that no single country supplies more than 65% of its strategic raw material needs, the Journal reported.
