Strategic Agreements on Rare Earths: The Shaping of Global Supply Chains

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The so-called rare earths are a group of 17 chemical elements (including lanthanum, neodymium, dysprosium, and praseodymium), essential for the production of high-value technologies such as batteries, permanent magnets, wind turbines, semiconductors, microprocessors, and advanced electronic components. Despite their name, they are not particularly “rare” in the Earth’s crust, but their extraction and refining processes are complex, costly, and environmentally impactful. In recent years, rare earths have become a crucial strategic resource, both for the economic development of industrialized countries and for national security. Currently, China controls over 60% of global extraction and more than 85% of global refining of rare earths, making many Western economies heavily dependent on its industrial supply chain. This imbalance has led to growing attention from Western powers toward diversifying supply sources.

Recent Agreements and Strategic Developments

U.S.–Ukraine Agreement on Rare Earths:In February 2025, the United States and Ukraine reached an agreement that includes the creation of an investment fund for reconstruction, with Ukraine contributing 50% of the revenues from the exploitation of state mineral resources, including rare earth elements like scandium, alongside lithium, graphite, cobalt, and titanium. This agreement aims to secure vital raw materials for Western nations while fostering economic development in Ukraine.
U.S. Interest in Greenland’s Rare Earths:Greenland, rich in rare earth resources, has attracted international attention, especially from the United States. Former U.S. President Donald Trump’s interest in purchasing Greenland underscored the strategic significance of its mineral resources, particularly rare earth elements.

Legal and Regulatory Implications

From a legal standpoint, these agreements are primarily intergovernmental collaborations designed to secure access to critical raw materials more sustainably and transparently. The European Commission, for instance, has already adopted the Critical Raw Materials Act (Regulation (EU) 2024/733), which aims to achieve at least 10% domestic extraction and 15% recycling of critical raw materials by 2030. Although the EU is not directly involved in these agreements, it could put indirect pressure on European industrial policies in the mining and metallurgical sectors.

Furthermore, questions arise regarding the compatibility of such agreements with the multilateral trade rules under the WTO, especially concerning potential export restrictions, sourcing preferences, or state support measures. Environmental and human rights considerations also demand attention: the extraction and refining of rare earths often have devastating impacts on local ecosystems and Indigenous communities. Implementing binding standards and certification systems, similar to the Kimberley Process for diamonds, will be crucial to avoid a resource race that sidelines sustainability.

These recent developments highlight the increasing strategic importance of rare earths and the global efforts to secure a more diverse and sustainable supply chain. The U.S., Ukraine, Greenland, and Australia are all playing pivotal roles in shaping the future of this critical industry. As these agreements unfold, the challenge will be to create a framework that promotes equitable access to resources, sustainable practices, and respects fundamental human rights while reducing dependence on any one nation. For the European Union, the key challenge will be to build a cohesive industrial policy that ensures technological sovereignty while fostering international cooperation on critical raw materials.