Brussels sets out a $3.5bn ReSourceEU package to halve reliance on Chinese critical minerals by 2029, pairing new financing for mining, refining and recycling with tougher scrutiny of corporate supply chains and planned scrap export limits.

SINGAPORE, SG / ACCESS Newswire / December 10, 2025 / Europe's industrial policy tightens its grip on supply-chain risk as Carvina Capital Pte. Ltd. circulates new analysis of the European Commission's ReSourceEU Action Plan, a $3.5bn programme aimed at cutting dependence on China for critical raw materials by 50% by 2029.

The vulnerability is measurable. On the Commission's most recent sourcing snapshot, covering the preceding 12-month period, China provides 98% of the EU's rare earth inputs and 60% of the wider critical minerals list, creating a single-point-of-failure for net-zero technologies, digital hardware, aerospace manufacturing and defence supply.

China's readiness to apply pressure remains an active factor in corporate planning. Export controls introduced towards the end of 2023 continue to influence availability for selected metals and rare earth elements, while research published during the preceding 12 months by the EU Chamber of Commerce in China indicates that 60% of European businesses expect government-imposed restrictions to disrupt supply chains.

Permanent magnets illustrate how quickly geopolitics reaches factory floors. Over the preceding 12 months, EU imports are estimated at about 20,000 tonnes, with 17,000 to 18,000 tonnes originating in China, concentrating risk in components that sit inside electric motors, wind turbines, electronics and a growing share of defence equipment.

ReSourceEU is structured to force momentum through the weakest links. The Commission is set to mobilise up to $3.5bn over the next 12 months across an initial 25-30 projects spanning extraction, processing and recycling, while the European Investment Bank is expected to supply around $2.3bn a year in loans and debt instruments. A European Critical Raw Materials Centre is due by early 2026 to provide market intelligence and steer projects, and a new platform is designed to pool demand, coordinate purchasing and build stockpiles that reduce exposure to sudden export restrictions.

Peter Jacobs, Director of Private Equity, frames the shift as "Europe moving from exposure to agency, using financing and coordination to reduce the leverage that comes with concentrated supply". Carvina Capital's assessment adds that the headline funding figure matters less than whether permitting, grid access and processing capacity move on timelines that match industrial need; Jacobs puts it as "a race between policy announcements and physical build-out".

Brussels is also signalling that diversification is becoming a governance issue rather than a procurement preference. Proposed changes to the Critical Raw Materials Act are set to require vulnerable companies to brief boards on supply-chain broadening plans, supported by verification systems that test implementation and bring procurement officers closer to strategic decision-making. Jacobs describes the direction as "a compliance baseline where sourcing risk sits alongside cyber risk and sanctions screening as a board responsibility".

Recycling and scrap policy add another layer. Trade data for 2024 places EU aluminium scrap exports at 1.26m tonnes, around 50% higher than in 2019, and the Commission plans to restrict exports of aluminium scrap and permanent magnet waste from early 2026 to keep material inside the bloc. The Act sets a target for recycling to meet 25% of EU demand for critical minerals by 2030, yet rare earth recycling stays below 1% on the latest available measurement over the preceding 12 months. In the European Parliament, an industry committee vote during the preceding 12 months supports recycling at least 45% of each designated strategic raw material found in Union waste.

China's market power explains why the language is shifting from resilience to security. On global estimates compiled during the preceding 12 months, China accounts for about 60% of rare earth mining, 87% of processing and 92% of magnet manufacturing. The EU's counterweight is written into 2030 benchmarks for 10% of annual consumption to come from domestic extraction, 40% from processing and 15% from recycling, with the European Raw Materials Alliance, in a project pipeline published during the preceding 12 months, listing 14 priority projects that require around $2bn of committed capital.

For investors and companies, the message is that raw materials sit at the centre of a new industrial settlement, with policy, security and returns increasingly intertwined. Jacobs concludes that "capital follows certainty, and the jurisdictions that can build processing and recycling capacity with predictable rules are likely to command the strategic premium".

About Carvina Capital

Carvina Capital Pte. Ltd. (UEN: 201220825D) is headquartered in Singapore and has operated since 2012. The firm runs research-led, long-only public equity strategies for institutional and professional investors and is assessing products intended to be accessible to retail investors. Its research discipline and risk framework aim to compound capital across full market cycles. Further information is available at https://carvina.com.

Media enquiries: Huacheng Yu, media@carvina.com

SOURCE: Carvina Capital Pte. Ltd.