Europe must ‘guard against US dominance in rare earths’

LONDON, Dec 7 (Reuters): Europe has finally taken major steps to build up its rare earths sector to counter Chinese dominance, but the region also needs to guard against being overwhelmed by the United States, the head of an EU-funded agency for key minerals said.

Bernd Schaefer, CEO of EIT RawMaterials, welcomed Wednesday's release of a new EU action plan to secure critical raw materials used in electric cars, wind turbines and semiconductors.

The European Commission's REsourceEU plan includes investing 3 billion euros ($3.49 billion) over the next year to fast-track projects that could cut reliance on supplies from a single country.

"It is certainly a real step change from ambition to delivery, but it's still missing a couple of things," Schaefer told Reuters in an interview.

The EU needs to step up negotiations with third countries that can supply it with key minerals, he said.

"Many memorandums of understanding have been signed in recent years with international partners, but this is only a starting point," Schaefer added.

"We must become more of a deal-maker and get away from our prosaic attitude and just talking about everything."

Europe also needs to make sure it does not continue to lose key rare earth assets to the US, he said, citing the recent acquisition by USA Rare Earth (USAR.O), opens new tab of Less Common Metals.