China’s stranglehold on rare earths must be ended, says hopeful supplier to EU

Rafael Moreno, the head of Viridis Mining and Minerals, a company hoping to supply the EU with rare earths within two years, has emphasized the need to break China's grip on the global rare earths market. Speaking ahead of the upcoming Trump-Xi summit, Moreno expressed concern over the "nervous" market situation, urging the Chinese leader to ease export restrictions on these essential materials used in various industries, including cars, wind turbines, and military jets.

China imposed export controls on rare earths in April 2025, causing significant disruption to the auto industries in the EU, UK, US, and Japan. Although Xi Jinping agreed to suspend stricter global restrictions for a year following a meeting with Trump in South Korea last October, the extension of this suspension remains uncertain.

Kurt Tong, a managing partner at the Asia Group, a Washington-based strategic advisory firm, stated that if the suspension is not extended, it could hinder regular presidential meetings between the two leaders. However, Tong suggested that the suspension deal might be postponed until November, when Trump plans to visit China for the APEC governmental forum of 21 countries.

Viridis is gaining attention in Brussels, where diversifying supply chains away from China is a top priority for Ursula von der Leyen, the European Commission president. The company has opened a demonstration plant in Brazil to extract and process rare earths, with the potential for further processing in France to isolate the rare earths themselves.

The EU trade commissioner, Maroš Šefčovič, is set to travel to Beijing on October 8 for a summit with China's commerce minister, Wang Wentao, to address the "unsustainable" €1 billion daily trade deficit with China. Šefčovič highlighted the concerning deficit, driven by the surge in exports of electric vehicles, cars, and renewable energy machinery, as well as related components.

EU politicians and officials are scrambling to find alternative sources for critical raw materials and rare earths as China controls between 80% and 90% of the world's raw materials and processed end products. The Chinese exchange rate is also contributing to lower import costs for EU industries.

The EU's international partnership commissioner, Jozef Síkela, visited Viridis's demonstration plant in Brazil to learn about the company's plans to secure a 5% share of the rare earths market, with production slated to begin by the end of 2028. Moreno expressed optimism about Viridis's partnership with the French chemical company Solvay to process and supply rare earths to OEMs, car manufacturers, and wind turbine producers like Siemens Gamesa.