Critical raw materials have increasingly dominated strategic conversations in recent years, and for good reason. Their essential role in technologies that power daily life, particularly in renewable energy systems and electric vehicles, makes them foundational to any modern economy. Equally vital is their role in advanced military systems. In this light, China’s dominance in CRM extraction and processing has justifiably raised concern across Europe and its allies. EU Member States should follow Canada’s example by allocating part of their rising defence budgets to support Europe’s critical raw materials policy. Most importantly, this funding should be pursued jointly, with coordinated efforts to identify priority projects and pool resources to maximise the impact on Europe’s strategic autonomy.
Tungsten, designated by the EU as a critical raw material, highlights Europe’s dependence on external suppliers. Valued for its exceptional hardness, strength, and heat resistance, tungsten is essential in defence applications, including engine components and warheads. Yet in 2023, China controlled around 83% of global high-quality tungsten production, underscoring the West’s heavy reliance on a single supplier for this strategic resource.
To reduce this and many other strategic vulnerabilities, the EU passed the Critical Raw Materials Act in 2024, which outlines targets for boosting domestic extraction, recycling, and diversifying imports. Notably, the act identifies 34 critical raw materials, of which 17 are also strategic, referring to their heightened importance in green transition, digitalization, and defence industry needs. The regulation sets ambitious 2030 targets for the EU’s supply of strategic raw materials. By then, at least 10% of annual consumption should come from mining within the EU, 40% should be processed domestically, and 25% should be sourced from recycled materials. To reduce dependency, no single non-EU country should account for more than 65% of the supply of any given raw material. Yet, despite its ambitions, the act shows “a lack of clear measures to improve access to financing”, according to the European Roundtable for Industry. This shortfall is especially relevant for EU member states with untapped geological potential.
Europe holds significant untapped mining potential, especially for battery materials such as lithium, cobalt, copper, manganese, and natural graphite. Portugal ranks among the top lithium producers, while major reserves also exist across France, Germany, Czechia, Serbia, Spain, Finland, and Austria. Cobalt prospects are strong in Finland and the Balkans, and Sweden hosts Europe’s largest known rare earth deposit. Further potential lies in the secondary market for critical materials as well as in recycling critical raw materials. 
Therefore, increasing the investment available for new mining projects is crucial in bridging the mining production goals and reality in Europe. Eurometaux, the European non-ferrous metals producers and recyclers association, has announced that meeting the EU goals on raw materials will require opening at least 10 new mines, 15 processing plants and 15 recycling plants.
The increasing need for these raw materials exacerbates the investment gaps driven by the long timelines, often lasting up to 20 years, and the billions in capital needed to bring projects from exploration to operation. This challenge is compounded by a shortage of skilled professionals capable of managing a modern, high-tech mining sector. Furthermore, structural deficiencies in the sector, combined with challenging market conditions, such as volatile material prices and high energy costs, will make attracting investment difficult without a certain level of public support.
Canada, a NATO ally with significant CRM deposits, has begun to bridge its mining investment gaps by linking CRM development with its national defence strategy. As part of its response to NATO’s 5% defence spending pledge, Canada has strategically directed funds toward midstream CRM infrastructure, recognising that these materials are not only economic assets but also military necessities. Prime Minister Mark Carney explained:
“Some of the spending for that counts towards that five per cent. In fact, a lot of it will count toward that five per cent because of infrastructure spending, it’s ports and railroads and other ways to get these minerals out. So that’s something that benefits the Canadian economy but is also part of our NATO, our new NATO responsibilities.”
This offers a blueprint for EU states with investment gaps in mining. As they ramp up defense spending in response to geopolitical shifts and NATO commitments, they should follow Canada’s lead and ensure that a portion of these increases supports critical raw material production. Doing so would not only strengthen their own strategic autonomy but also contribute to Europe’s broader resilience in the face of global supply chain disruptions.
However, the EU should not simply replicate Canada’s model. EU states and regions should focus on jointly addressing these investment gaps through leveraging increased defence budgets, coordinating efforts to identify priority projects and pool resources. As the OECD highlights, the EU’s competitiveness is constrained by low-scale, isolated investments and slower decision-making compared to some non-EU countries that can mobilise greater capital more quickly. By creating a coordinated, strategic investment framework that reflects Europe’s unique governance and industrial context, the EU can turn its geological potential into a key pillar of both economic and military resilience.
