According to a report by the British newspaper The Guardian on September 20th, as Europe continues to promote diversification of key raw material supply chains, a senior executive of a mining company that plans to supply rare earths to Europe claims that eliminating China's dominance in the global rare earth supply chain is 'crucial'.
But reality isn’t that simple.
The European Steel Product Buyers’ Organization Eurometal stated that due to some Chinese products sometimes being about 30% cheaper than European alternatives, component suppliers and manufacturers are under pressure to choose Chinese products every day. Meanwhile, a Brazilian rare earth project that is highly anticipated in Europe is still in the demonstration stage and will not begin production until the end of 2028 at the earliest.
The statement was made by Rafael Moreno, managing director of the Australian listed mining company Viridis Mining and Minerals. The company has mining assets in Brazil, Australia, and Canada, and is currently developing a rare earth project in Minas Gerais, Brazil.
Moreno stated that rare earths are widely used in various industries, from automobiles and wind turbines to military aircraft. Therefore, it is “crucial” to end China’s dominance in related supply chains.
The Guardian reported on what it called China's 'suppression' of the supply of rare earths, stating that China currently holds a significant share in the global supply of rare earth raw materials and processed products. In recent years, the EU has been seeking key raw material sources other than China, and thus Viridis has received attention from Brussels.
The company has already established a demonstration plant in Minas Gerais, Brazil. It extracts and produces powders containing rare earth elements from mining areas. In the future, these materials may be transported to France for further separation and purification. Jozef Síkela, the European Commission's Commissioner for International Partnerships, visited Brazil this year to inspect this project.
However, it will take at least another two years for this promising alternative supply chain to truly become a viable option.
According to Viridis's current plan, its products are not expected to start production until the end of 2028. The company aims to capture approximately 5% of the global rare earth market. Viridis also plans to collaborate with the French chemical company Solvay, supplying products to European automakers and wind power equipment manufacturers in the future.
Beyond production capacity, price is also an issue that Europe cannot avoid. Moreno himself admits that companies naturally tend to purchase products at the lowest prices. If downstream enterprises are unwilling to support local supply chains, then the so-called alternative supply chains will ‘never truly be able to take off’.
