The European Union plans to offer the U.S. a partnership on critical minerals to reduce dependence on China, which controls more than 70% of rare earth mineral production and 90% of processing, Investing.com reported. The strategy includes joint mining projects, price support mechanisms and protection of markets from manipulation.
Key aspects of the partnership include reducing Beijing’s influence on global supply chains, given China’s restrictions on rare earth exports.
Negotiations on a Critical Minerals Agreement (CMA) have been underway since March 2023 to include EU materials in US tax credits for electric vehicles, Congress.gov clarifies.
What constitutes “Section 232?”
The proposal from the EU comes amid the US administration’s push to establish global agreements in this area. The so-called “Section 232”, dealing with critical minerals, authorizes the President to adjust imports of goods and their derivatives entering the United States so that such imports do not pose a threat to national security.
How does the United States act?
The Trump administration is taking sweeping steps this week to build global alliances in critical minerals to reduce dependence on China.
On February 2, Trump announced the creation of a $12 billion National Strategic Minerals Reserve. The project combines $10 billion in government loans and $1.67 billion in private capital to purchase raw materials (lithium, cobalt, rare earths).
A ministerial meeting in Washington is scheduled for February 4. Secretary of State Marco Rubio is hosting delegations from dozens of countries (including the G7, Australia, South Korea and India) to discuss the “Framework Agreement on Cooperation”.
Eleven more countries are expected to join the so-called “mineral trade club” this week. A partnership with the EU to create a “Strategic Partnership Roadmap” is also being discussed.
