Strategic Responses to China’s Rare Earths and CIM Dominance - A UK and EU Perspective

17th September 2025

China’s tightening grip on rare earth elements and cellular IoT modules (CIMs) has triggered a wave of strategic recalibration across Western economies.

As Beijing expands its control not only over domestic mineral production but also over imported materials refined within its borders, the implications stretch far beyond supply chains. The UK and European Union are now confronting the reality that economic dependency on China could compromise both technological sovereignty and national security.

In the United Kingdom, the response has been marked by a growing sense of urgency. Rare earths have been formally designated as critical minerals, with policymakers acknowledging their indispensable role in defence, clean energy, and advanced manufacturing.

Institutions such as the University of Birmingham are spearheading research into rare earth recycling, while companies like Recyclus Group are developing domestic capabilities to reclaim materials from used batteries. These efforts align with the UK’s broader net-zero ambitions and its desire to reduce reliance on Chinese refining expertise. A domain where China holds tens of thousands of patents, compared to none in the UK.

However, the path forward is fraught with challenges. Environmental concerns, long lead times for mining projects, and a lack of technical infrastructure make rapid diversification difficult.

The European Union has taken a more structured and assertive approach. The passage of the Critical Raw Materials Act in 2024 set ambitious targets: producing 10% of critical minerals domestically, recycling 25% of annual consumption, and reducing reliance on any single country to below 65% by 2030. Diplomatic efforts have also intensified, with the EU negotiating new export mechanisms with China to ease rare earth bottlenecks.

Yet tensions remain, particularly over trade imbalances in electric vehicles and solar technology. In a bold move toward long-term autonomy, the EU is even exploring space mining, with Luxembourg positioning itself as a hub for extra-terrestrial resource extraction.

Despite these efforts, Europe’s rare earth recycling rate remains below 1%, and new mining projects—such as Sweden’s massive deposit discovered in 2023—are years away from production. Estonia’s magnet separation facility stands as the continent’s only operational site of its kind, underscoring the scale of the challenge.

Ultimately, both the UK and EU are racing against time. China’s dominance in CIMs and rare earths is not just a matter of economic leverage. It’s a strategic advantage that could extend into digital infrastructure and cybersecurity.

As Western governments grapple with this evolving landscape, their responses will shape the future of technological resilience and geopolitical balance.

fDi Intelligence 16 September 2025
Read another article HERE

Recyclus Group 8 April 2025
[url=https://recyclusgroup.com/mitigating-the-uks-dependence-on-chinese-resources/]Mitigating the UK’s Dependence on Chinese Resources[/url]

Wikipedia Rare-earth element

PHOTO
These rare-earth oxides are used as tracers to determine which parts of a watershed are eroding. Clockwise from top center: praseodymium, cerium, lanthanum, neodymium, samarium, and gadolinium.
By Peggy Greb, US department of agriculture - http://www.ars.usda.gov/is/graphics/photos/jun05/d115-1.htm, Public Domain, https://commons.wikimedia.org/w/index.php?curid=10512749