Rare earths – How we can address geostrategic dependencies

History tends to repeat itself. In 2010, rare earths were already on everyone’s lips. The press reported virtually daily on dysprosium and neodymium – and on Europe’s dependence on supplies from China. Back then, 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 basis of industrial production had been ignored for too long.

Initially, this led to a search for alternative sources that were available in the short term. Geological exploration boomed and it quickly became clear that there were a large number of major rare earth deposits around the globe – including in the European Union. Not only the economy, but also governments reacted quickly to their scarcity. In 2010, the German government formulated a “National Raw Materials Strategy,” promoted research and innovation through targeted funding programs, and established two new institutions: the German Raw Materials Agency in Berlin, which gathers data on raw materials and advises German industry; and the Helmholtz Institute Freiberg for Resource Technology, which pursues research on technologies for the efficient use of mineral and metallic raw materials. Raw materials research is now an integral part of the Helmholtz Association’s portfolio.

One might assume that we’d learned our lesson from the “rare earth crisis” in 2010 and that by now, 15 years later, China’s monopoly would have been weakened. But guess again. Prices for rare earths normalized as early as 2012 with the easing of Chinese export restrictions. Since importing rare earths from China was once again cheaper than developing alternative sources of raw materials, the need for a strategic alliance between industry and politics to ensure a resilient supply of raw materials no longer seemed urgent. As a result, we failed to diversify supply chains, establish strategic raw material reserves, develop domestic extraction and processing structures, invest in systematic recycling, or establish substitutes for rare earths. Even the promising results of publicly funded research – for example, on the recycling of neodymium magnets – never found their way into domestic industry due to a lack of buyers and capital. And so far, the EU regulation on critical raw materials ratified in 2023 hasn’t changed things. As a result, China’s dominance throughout the rare earth value chain has actually grown over the past 15 years.

And so, inevitably, we see history repeating itself: since the beginning of 2025, China has been using its monopoly as a geostrategic tool once again – this time in a tariff war with the US. And once again, industry and politics appear ill-prepared to respond.

In the wake of this second supply crisis, it is now worth asking whether publicly funded research in Germany can play a different part in 2025 than it did in 2010. Fifteen years ago, pioneering work had to be done first: since research into raw materials hadn’t been a priority for over 30 years, new skills and capacities had to first be established. These are now available, unlike in 2010. Consequently, raw materials research will require far less prep time in 2025 – and rapid advances can be expected. A broad portfolio of attractive research topics is available, ranging from materials research for substitution to the establishment 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 in 2025: the lack of a suitable research infrastructure, which is essential for rapidly scaling novel raw material technologies and preparing them for transfer to industry. Innovation requires investments, and this is especially true for research into raw materials in Germany. The time for making these investments is running out if we don’t want to have to worry about the use of rare earths as a geostrategic tool in the future.