Rare earths – how we can tackle geostrategic dependencies

Rare earth elements are indispensable for many modern technologies. To remain independent of regions with a monopoly on supply, we must invest in appropriate research infrastructure, says Jens Gutzmer, mineralogist and founding director of the Helmholtz Institute Freiberg for Resource Technology.

History repeats itself. Back in 2010, rare earths were already the talk of the town. The press reported daily on dysprosium and neodymium – and on Europe’s dependence on supplies from China. At that time, China had used its monopoly on rare earths as a geostrategic tool for the first time and imposed an export ban. The resulting panic in industry and politics made it clear that the role of raw materials as the foundation of industrial production had been ignored for too long.
Initially, the search was on for alternative sources available in the short term. Geological exploration boomed: it quickly became clear that there are a large number of rare-earth deposits worldwide – including within the European Union. Not only the business sector but also governments reacted swiftly to the resulting shortage. In 2010, the German Government formulated a ‘National Raw Materials Strategy’, used funding programmes to specifically stimulate research and innovation, and established two new institutions: the German Raw Materials Agency in Berlin collects data on raw materials and provides advisory support to German industry. The Helmholtz Institute Freiberg for Resource Technology conducts research into technologies for the efficient management of mineral and metallic raw materials. As a result, raw materials research has now become an integral part of the Helmholtz Association’s portfolio.

China’s growing dominance

One might assume that we have learnt our lessons from the ‘rare earths’ crisis of 2010, and that China’s monopoly has been put into perspective after 15 years. But nothing could be further from the truth. Prices for rare earths returned to normal as early as 2012 following the easing of Chinese export restrictions. Importing rare earths from China was therefore once again cheaper than tapping into alternative sources of raw materials, and so the need for a strategic alliance between industry and politics to ensure a resilient supply of raw materials no longer seemed urgent. Consequently, opportunities were missed to diversify supply chains, establish strategic raw materials reserves, build up domestic extraction and processing capabilities, invest in systematic recycling, or develop substitutes for rare earths. Even the promising results of publicly funded research – for example, on the recycling of neodymium magnets – failed to find their way into domestic industry: there was a lack of buyers and capital. Even the EU’s Critical Raw Materials Regulation, adopted in 2023, has so far done nothing to change this. As a result, China’s dominance along the rare-earth value chain has grown even further over the past 15 years.

Innovation requires investment

So it came to pass – history repeats itself: since the beginning of 2025, China has been using its monopoly as a geostrategic tool for a second time – this time in the trade dispute with the US. And once again, industry and politics appear ill-prepared. ##In the wake of this second supply crisis, one might now ask whether publicly funded research in Germany in 2025 can play a different role to that it did in 2010. Fifteen years ago, groundwork had to be laid first; research into raw materials had not been a priority for over 30 years. New expertise and capacities had to be built up. These are now available, unlike in 2010. Raw materials research in 2025 will therefore require a significantly shorter lead time – rapid progress can be expected. A broad portfolio of attractive research topics is available, ranging from materials research on substitutes to the development of a sustainable circular economy for rare earths.
However, there is one major obstacle that will continue to limit the effectiveness of research and innovation even in 2025: the lack of suitable research infrastructures to rapidly scale up novel raw materials technologies and prepare them for transfer to industry. Innovation requires investment, and this is particularly true for research into raw materials in Germany. Time is of the essence for these investments if we are to take a more relaxed view of the use of rare earths as a geostrategic tool in the future.
Source: HZDR