“National Plan on Rare Earths”: Can France and the EU Make up Lost Ground Against China?

Rare earths lie at the heart of global economic and geopolitical rivalries. Used in medical technologies, electric vehicles, offshore wind turbines and defence equipment, they have now become a major strategic issue for states. Faced with China’s dominance in extraction, refining and the manufacture of permanent magnets, France and the European Union are trying to develop their mining strategy in order to reduce their dependence. But the accumulated delay remains considerable and European industrial capacity remains limited. Does France’s “national plan on rare earths” mark a genuine turning point? Why are rare earths at the heart of global geopolitical issues? Can the European Union really catch up with China? And how does China use rare earths as an instrument of power and diplomatic pressure? Guillaume Pitron, Associate Research Fellow at IRIS and a specialist in critical raw materials, explains.

Why Are Rare Earths Receiving such Particular Attention Today?

Rare earths are a family of fifteen metals found in a large number of technologies. They are used in electronics, electric vehicle motors, offshore wind turbines, medical technologies and imaging equipment. They are also strategic for the defence industry. Samarium, for example, is used to manufacture magnets that can withstand very high temperatures, which are essential in certain military equipment. Today, the defence sector faces an extremely high level of dependence on rare earths.

China extracts around 60% of the world’s rare earths, refines nearly 85% of production and manufactures around 94% of rare-earth-based permanent magnets. For several years, Beijing has been gradually restricting its exports of rare earths and permanent magnets. These restrictions directly affect user sectors, notably the medical industry, electric vehicles and, above all, defence.

French companies in the defence industrial and technological base now find themselves in a situation of acute vulnerability, particularly with regard to samarium-cobalt magnets, of which China accounts for virtually 100% of production. Industrial firms are therefore actively looking for alternative suppliers, mainly in the United States or in Europe. But the United States is now following an “America First” logic, which also limits supply guarantees for Europeans. This situation explains the current urgency surrounding rare earths and the need to accelerate the development of alternative production on the European continent.

Does the “National Plan on Rare Earths” Presented by Roland Lescure, Minister of the Economy, and Sébastien Martin, Minister Delegate for Industry, Constitute a Major Step Forward in Reducing France’s Dependence on Rare Earth Imports?

A major step forward, perhaps not. France, Europe and the Western world more broadly are around thirty years behind China in the development of their rare earths industry. The gap is immense. The term “major” therefore seems ambitious, even if this is indeed a step forward.

The plan first recalls what has already been undertaken in France concerning the redeployment of a production chain for rare earths and rare earth elements. This industry already existed in France before gradually disappearing. The aim now is to revive it. The plan highlights several companies that are already active, whose production is expected to begin in the medium term. In this sense, it is not entirely new, since it largely takes up industrial initiatives that have already been under way for several years, notably by companies such as Carester or MagREEsource.

There is therefore an element of communication in the announcement of this plan. Industrial actions that have already been launched are being presented from a new angle, with relatively short-term objectives that remain very ambitious, particularly in terms of rare earth separation and the production of permanent magnets. Above all, the plan confirms the continuation of existing government schemes: tax credits, regulatory simplifications and a state-guaranteed loan intended to support companies in the sector. These mechanisms are designed in particular to secure rare earth purchases by companies located downstream in the value chain, by guaranteeing certain future purchases from French or foreign producers. This guarantee secures both the buyer and the producer. At the same time, the state is also asking industrial firms to map their supply chains and the origin of their rare earth supplies more effectively. This more precise knowledge of the value chain is presented as an essential step in implementing a genuine mineral sovereignty strategy. The plan therefore requires industrial firms to invest more in understanding and monitoring their own supply chains.

The plan also implicitly recognises that France will not be able to rebuild on its own an entire integrated chain running from the mine to the permanent magnet. Several bilateral agreements have already been signed with countries producing critical metals and rare earths, notably Brazil, Malaysia, South Africa and Sweden. France will therefore have to source abroad some of the rare earths needed for its sector. We can therefore see the limits of this plan, which are first and foremost geological. France does not have sufficient resources on its own territory. The objective is thus to integrate resources extracted in partner countries into a French or European sector, with a specialisation more geared towards separation, the production of permanent magnets and recycling.

The genuinely new aspect lies mainly in the fact that there is now a national plan specifically devoted to rare earths. Until now, France had a general policy on critical metals, but never a plan targeting one particular family of raw materials. This is the first time that specific treatment has been applied to rare earths, which could herald other national plans devoted to particular critical metals depending on industrial emergencies.

Does the European Plan on Critical Raw Materials Really Enable the European Union to Respond to Current Challenges? What Are the Main Obstacles to Relocating Production and Refining in Europe?

The European plan is officially known as the Critical Raw Materials Act. Adopted in 2024, it sets mineral sovereignty objectives for 2030 for all critical metals, including rare earths. This plan is an essential step. It marks a European awakening and establishes a common strategy. However, it suffers from a significant lack of funding and its implementation remains complex. For certain metals, such as lithium, a degree of European sovereignty appears achievable by 2030. By contrast, for other critical metals, notably certain rare earths, the plan’s objectives will be much harder to achieve because of insufficient industrial capacity. The European Commission has also launched a programme of 47 strategic industrial projects covering extraction, refining, magnet manufacturing and the recycling of critical metals. These projects receive European support in order to accelerate the industrial revival of the sector.

Overall, the decisions taken are moving in the right direction, but they have come late. They should have been launched ten, fifteen or twenty years ago. Their effects will therefore only be visible in the medium or long term. Moreover, the United States is also massively accelerating its investments in critical metals. By way of example, for every euro invested by Europeans in this sector, the Americans invest ten dollars. Given China’s head start, it will be impossible to secure full, or even partial, sovereignty rapidly by 2030.

How can China’s dominance in the production and refining of rare earths be explained? To what extent does it use these resources as a lever of power and diplomatic pressure?

From the 1980s onwards, China understood the strategic importance of rare earths and, more broadly, of critical metals for the industries of the future. The Chinese state has the capacity for very long-term industrial planning. It can accept immediate economic sacrifices in order to secure strategic benefits over several decades. Beijing therefore secured access to rare earths very early on while gradually absorbing alternative Western production capacity. This strategy enabled China to acquire a dominant position that now gives it real leverage over Western countries. Rare earths have become an instrument of power.

China can tighten or reopen the export tap according to its economic or diplomatic interests. This logic became very clear when the trade war between the United States and China resumed after Donald Trump’s return to the White House. Beijing reduced its exports of rare earths, forcing Washington to moderate certain trade positions. Rare earths are now a real Achilles heel for both the United States and Europe.

This dependence is likely to continue for several more years. Western countries are now accelerating their mineral sovereignty strategies, particularly in mining extraction. But China retains a considerable lead in refining and the manufacture of permanent magnets. We should therefore expect the country to continue to dominate for another ten to fifteen years over a significant part of the rare earths value chain, particularly for certain highly strategic rare earths such as samarium, of which it controls virtually the entire global production.