London | The European Union has issued a plan to cut its dependence on Chinese supplies of rare earths, lithium batteries and solar-cell components, as it tries to build a green-energy economy that isn’t largely made in Beijing.Brussels will bring industry, governments and NGOs into a ‘‘European Raw Materials Alliance’’, which will refashion the continent’s supply chains for up to 30 critical products – including those used to make wind turbines, fuel cells, solar panels, magnets, drones and batteries for electric vehicles.Lithium appears on the EU’s critical list for the first time, in a fillip for the clutch of Australian-listed companies looking to mine and process it within Europe.‘‘We cannot afford to rely entirely on third countries – for some rare earths, even just one country,’’ said the EU’s Internal Market Commissioner Thierry Breton, as he launched the Action Plan on Critical Raw Materials on Thursday (AEST). ‘‘By diversifying the supply from third countries and developing the EU’s own capacity for extraction, processing, recycling, refining and separation of rare earths, we can become more resilient and sustainable.’’Brussels will look to ‘‘build sustainable and responsible strategic partnerships with resource-rich countries’’, the Action Plan said, name-checking Australia as one of its priorities.The strategy isn’t overtly aimed at China – there are also dependencies on Turkey, the Democratic Republic of the Congo, and South Africa – but the European Commission’s analysis shows that in most cases the Asian behemoth is the critical risk factor.The Action Plan’s risk assessment notes ‘‘major concerns’’ about China’s ‘‘quasi-monopolistic role’’ in rare earths used to produce magnets for wind turbines, and its dominance of lithium battery production. The Europeans’ concern has accelerated since the onset of COVID-19, according to Mike Deeks, Western Australia’s agent-general in London. ‘‘So many businesses got caught out by the sudden lockdown in China which, in many cases, completely halted their only source of supply,’’ he told a trade webinar on Thursday.‘‘This could happen again, without warning, due to another pandemic, a natural disaster, let alone political unrest and trade disputes.’’Europe is also increasingly waking up to the strategic threat from China, as Beijing pursues its own interests more aggressively and explicitly.In a policy shift Brussels has dubbed ‘‘open strategic autonomy’’, the EC has encouraged member states to screen major Chinese investments more rigorously and to fight unfair trade practices more trenchantly. The involvement of Chinese telco Huawei in 5G networks across the continent is also in question.This past week, European leaders have hardened their rhetoric with Beijing after Foreign Minister Wang Yi’s five-nation tour of the continent descended into acrimony.Mr Yi said the Czech Senate President Milos Vystrcil would pay ‘‘a heavy price’’ for his visit to Taiwan, which ‘‘crossed a red line’’. Germany’s foreign minister, France’s foreign ministry and Slovakia’s president all upbraided Mr Yi for his remarks.Beside the strategic challenge lies a supply-demand problem: in some cases, Chinese production won’t be enough to meet soaring European appetite as the continent implements its shift to net-zero emissions by 2050.Although lithium isn’t a short-term worry, for example, ‘‘in the mediumterm, large investments are needed to avoid a significant market deficit beyond 2025’’, the EC said. The report estimates the continent will need 18 times its current demand for batterygrade lithium by 2030, and up to 60 times as much by 2050.
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