Europe’s rare earth supply chain remains exposed to licensing pace and limited diversification, risking production for autos and chips.
European business groups warn that ongoing export controls on rare earth elements could trigger production disruptions for automakers and chipmakers. The European Chamber of Commerce in China says fewer than a quarter of roughly 140 license applications have been approved, a bottleneck with potential ripple effects across global supply chains. China remains the dominant refiner, handling about 85-90% of world processing capacity for rare earths, so licensing delays can tighten inventories downstream and threaten production lines in Europe and beyond.\nSome observers caution against reading the licensing picture as a simple trend, noting signs that magnet exports have risen since June. This hints at overall flows remaining robust even as access to licenses appears uneven or politicized. Official explanations frame controls as non-discriminatory, while critics worry policy timing creates uncertainty for high-tech sectors.\nThe episode underscores the fragility of Western supply chains that lack stockpiles, diversified sources, or redundant refining capacity. Even with high-level pledges to accelerate licenses, execution can stall within weeks, leaving manufacturers exposed to policy rhythms in Beijing. For investors and plant managers, the takeaway is clear: Europe’s rare earth supply chain remains exposed to policy shifts and to the pace of reform outside the region.