If Europe wishes to secure its own critical mineral supplies, it must learn from its failures and rein in private sector mineral companies.

While the United States is pushing to reestablish a domestic supply chain for rare earth metals, the European Union (EU) has fallen behind in combating its own economic dependencies. Consider, for instance, that the EU relies on China for 100 percent of rare earth elements used in the manufacturing of magnets—a pivotal component of modern technology, from semiconductors to electric motors.

Yet while EU countries are aware of their mineral dependency problem, discussions over both how this dependency came about and how to tackle it are lacking. The European Commission itself argues that the continent’s mineral dependency problems are a consequence of over-sourcing from individual countries. However, this framing and other explanations consistently overlook a key factor — the significant role of private-sector companies in Europe, which often deviate from national economic interests in favor of corporate profits.

Ultimately, any realistic strategy for enhancing the EU’s critical mineral supply chain resilience will require greater state involvement in critical mineral investment projects. By conceding too much influence to private corporations, European countries have compromised their national interests in favor of the profit incentives and cost-cutting interests of the private sector.

The Consequences of “Profit Now, Pay Later” Thinking

More often than not, European mineral policy has been shaped in boardrooms rather than ministries, with governments de facto outsourcing the long-term stewardship of strategic resources to the private sector. By doing so, European capitals avoided the messy discussions over the financial and political burdens of high-cost exploration and processing projects, to say nothing of the environmental concerns.

This approach, however, has a naked problem: corporate priorities are completely different than those of states. Namely, companies in the neoliberal era—unbound by national priorities—optimize for cost efficiency and maximizing shareholder value, even if that means dismantling expensive domestic manufacturing capacity and deepening cheaper foreign supply dependencies. Nonetheless, European capitals broadly allowed this shift to occur because it was cheaper, politically easier, and in keeping with neoliberal orthodoxy, which regards resource security as a natural outcome of global trade rather than a deliberate objective of statecraft.

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The consequences of this approach have been evident. In Germany, for instance, gallium production facilities were shuttered in 2015 to take advantage of cheaper Chinese alternatives. France followed a similar pattern. In 2012, the........

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