EU Pours €3 Billion Into Critical Minerals Fund to Counter China's Grip
New 'RESourceEU' framework aims to fast-track domestic mining and processing of lithium and rare earths vital for green and defense industries.
The European Union has launched a €3 billion (approximately $3.2 billion) fund to accelerate the development of its domestic critical raw materials supply chain, a direct move to reduce its significant industrial reliance on China.
The new framework, named RESourceEU, will provide its initial funding to 25 strategic projects focused on essential materials such as lithium, rare earths, gallium, and germanium. These elements are indispensable for Europe's ambitions in electric vehicle manufacturing, renewable energy infrastructure, and advanced defense systems.
This investment represents a core component of the broader European Critical Raw Materials Act, which came into force earlier this year. The act sets ambitious targets for 2030, aiming for the EU to extract 10% of its annual mineral consumption, process 40%, and recycle 25% within its borders. The overarching goal is to ensure that no more than 65% of any single strategic raw material comes from a single third country.
The €3 billion is just the first step in a multi-year financial strategy. Brussels has outlined plans to deploy at least another €3 billion over the next three years, including €700 million in 2025 and an additional €2 billion between 2026 and 2027 to further de-risk supply chains.
The initiative is designed not as a simple subsidy but as a catalyst to unlock much larger pools of private capital. The RESourceEU framework will be supplemented by financing from the European Investment Bank and an expanded EU Innovation Fund, which will now include critical materials projects. This blended finance model is intended to give private investors the confidence needed to back capital-intensive and long-lead-time mining and refining projects.
For the global mining and materials sector, the EU's assertive industrial policy creates a powerful, long-term demand signal. While the fund initially targets projects within the bloc, its effects are expected to ripple outward, benefiting producers in allied nations like the United States, Canada, and Australia as European manufacturers seek to diversify their sourcing.
The strategic importance of this move has been underscored by recent geopolitical instability and supply chain disruptions, which exposed systemic risks to Europe's industrial base. By building a more resilient and localized value chain—from mining and refining to processing and recycling—the EU aims to secure the foundation of its green and digital transitions.
While the fund marks a significant commitment, the path to mineral independence remains challenging. Projects will still face lengthy permitting processes, environmental regulations, and the need for substantial technological investment. However, the RESourceEU framework sends an unequivocal message that Brussels is prepared to financially back its strategic autonomy goals, providing a significant long-term tailwind for the critical materials sector.