Battle for Critical Minerals: The Urgency and Divisions Within the U.S.-Europe Alliance

On January 11, 2026, at Shimizu Port in Shizuoka Prefecture, Japan, the research vessel Chikyu of the Japan Agency for Marine-Earth Science and Technology slowly set sail. Its destination was the waters near Minamitorishima, approximately 1,950 kilometers southeast of Tokyo, with the mission to conduct the world's first experimental mining of deep-sea rare-earth mud at a depth of 6,000 meters on the seabed. Almost simultaneously, U.S. Treasury Secretary Scott Bessent was preparing for a dinner in Washington, D.C., with invitees including finance ministers or cabinet-level officials from the Group of Seven (G7), the European Union, Australia, India, South Korea, and Mexico. An urgent meeting focusing on the security of critical mineral supply chains was about to commence.

From the depths of the Pacific Ocean to the Greenland ice sheet, from meeting rooms in Washington to laboratories in Tokyo, a strategic game reshaping the global resource landscape is accelerating. At its core is China's near-monopoly position in the supply chain of critical minerals. The data from the International Energy Agency is stark and direct: China refines 47% to 87% of the world's copper, lithium, cobalt, graphite, and rare earth elements. These materials, often referred to as the vitamins of modern industry, are the lifeblood of strategic sectors such as defense technology, semiconductors, renewable energy, and batteries. When economic dependence transforms into geopolitical leverage, the construction of a global resource alliance aimed at de-risking or decoupling moves from concept to urgent action.

Washington's call for "urgency" and alliance building

The atmosphere of the Washington meeting on January 12 was described by U.S. officials as one where urgency was the theme of the day. This gathering, which brought together approximately 60% of the global demand for critical minerals, had a clear and singular goal: to accelerate the reduction of dependence on China. Since presenting a briefing on rare earth issues to leaders at the G7 Summit in Canada in June 2025, U.S. Treasury Secretary Bessant has been pushing for such a specialized meeting. Although the summit resulted in an action plan to strengthen supply chains, Bessant grew increasingly frustrated with the slow progress that followed.

The United States' strategic posture is clear: it assumes the role of convener and leader. A senior U.S. official stated that the U.S. is convening various parties, demonstrating leadership, sharing its vision for the future, and preparing to act alongside nations that share a sense of urgency. This posture is backed by a series of concrete measures from the Trump administration: signing an $85 billion project pipeline agreement with Australia aimed at leveraging Australia's strategic reserves to counter China's dominance in critical minerals; simultaneously, the U.S. is also boosting domestic production through agreements with other producing countries like Ukraine.

However, the alliance is not monolithic. Apart from Japan—a country that has vigorously promoted supply chain diversification since China abruptly cut off rare earth supplies in 2010—other members remain heavily dependent on China. The meeting is expected to issue a statement but is unlikely to produce a concrete joint action plan. This reflects the early-stage characteristics of the alliance's formation: consensus lies in identifying problems and directions, while disagreements exist over action pathways, cost-sharing, and geopolitical priorities.

A frequently discussed potential tool is setting a price floor for critical minerals. German Finance Minister Lars Klingbeil revealed after the meeting that this measure aims to counter China's market dominance and price suppression through dumping, ensuring a minimum profit level for non-Chinese producers and thereby stabilizing investment expectations. Klingbeil emphasized that this is not about opposing anyone but about strengthening cooperation among partners. Setting a price floor can provide the market with predictable prices and minimize the influence of countries attempting to manipulate market prices. However, the design of this mechanism is complex, involving a balance of interests between producing and consuming countries, as well as how to avoid distorting the global market. Many details are left to be clarified in the coming weeks and may require further involvement from foreign ministers and energy ministers.

Europe's "Diversification" Path and the Adherence to Sovereignty

Compared to the United States' emphasis on speed, even at the cost of displaying a tough geopolitical stance, Europe's response appears more cautious, with its core logic being diversification rather than simple substitution. Before his trip to the United States, German Vice Chancellor and Finance Minister Christian Lindner clearly stated that Germany is willing to take joint action to strengthen supply chain security, but its primary goal is to reduce dependence and enhance supply security.

This caution is particularly acute in the issue of Greenland. When U.S. President Trump once again raised the idea of controlling Greenland, directly linking it to countering the influence of China and Russia in the Arctic, Europe's response was one of vigilance and principle. Klinkbyer spoke bluntly in Washington: the future of Greenland is solely determined by Denmark and Greenland. Territorial sovereignty and integrity must be respected. These principles of international law apply to everyone—including the United States. During his visit to the U.S. around the same time, German Foreign Minister Johann Wadepool conveyed a similar message to U.S. Secretary of State Rubio, reminding the U.S. of its shared responsibility as a NATO ally for freedom, self-determination, and security.

Europe's stance reveals the duality of its strategy: on one hand, in terms of economic security, it is acutely aware of the urgency to break China's monopoly, as the Greenland ice sheet is estimated to contain critical rare earth elements such as dysprosium and neodymium, sufficient to meet over a quarter of the world's future demand; on the other hand, in terms of geopolitics, it firmly upholds the rules-based international order and opposes any unilateral attempts to alter the territorial status quo. For Europe, supply chain security cannot come at the cost of undermining the international legal norms it relies on and the trust within its transatlantic alliance.

Europe's diversified approach may lean more towards technological cooperation and global multi-point deployment. For instance, Japan is regarded by Europe as a key technological partner due to its advantages in rare earth separation and refining technologies, as well as its exploration of deep-sea rare earth mud mining (its mud samples contain almost no radioactive uranium and thorium, facilitating domestic processing). At the same time, European capital has also shown interest in Australia's strategic reserve projects. This path is more costly and time-consuming, but perhaps better aligns with Europe's long-term pursuit of strategic autonomy and rule-based order.

The Real Dilemma of Resource Hotspots: Challenges in Greenland and Deep-Sea Mining

Whether it be the radical concepts from the United States or the cautious planning in Europe, none can avoid a fundamental question: where will alternative resources come from? Greenland and the deep sea are held in high hopes, but the reality is fraught with challenges.

The Allure and Pitfalls of Greenland Trump's fixation on Greenland is seen by analysts as more of a geopolitical spectacle than a practical supply solution. The challenges in Greenland are comprehensive: the extremely harsh environment, nearly non-existent infrastructure (lack of roads, railways), the complex state of mineral deposits (rare earth elements are often found in hard-to-refine eudialyte rather than the more common carbonatite), and the potential conflict between the fragile Arctic ecosystem and the emerging tourism industry. Extracting rare earth elements requires large amounts of toxic chemicals for separation and is often accompanied by radioactive uranium, posing extremely high environmental risks. Diogo Rosa, an economic geology researcher at the Geological Survey of Denmark and Greenland, points out that any mining enterprise must build all accessibility facilities from scratch and solve energy and expert manpower issues on-site.

Despite over a dozen companies conducting exploration on the island, most remain in the early stages. Even the most promising projects face the challenge of raising hundreds of millions of dollars in funding and could become unprofitable at any time due to China dumping excess materials onto the market, driving down prices. Ian Lange, a professor of economics at the Colorado School of Mines specializing in rare earths, analogized: Everyone is racing toward the finish line. If you go to Greenland, it's like going back to the starting point.

Technological and Commercial Uncertainties of Deep-Sea Mining Japan's deep-sea rare earth mud mining trial represents another cutting-edge path. The rare earth mud resources in the waters near Minamitorishima are vast, and the advantages for environmental processing are evident. Japan plans to assess commercial feasibility through this test, aiming to commence large-scale experiments from February next year, with a daily mining capacity of up to 350 tons of rare earth-bearing sediment. This is undoubtedly an ambitious plan, but the technical challenges of operating at 6,000 meters depth, the high costs, and the long-term impact of large-scale mining on deep-sea ecosystems are all unknowns. This is more akin to a technological reserve and strategic bet for the future, rather than a quick fix for the immediate pressures of the current supply chain.

Pragmatic voices within the industry believe that the United States and its allies should focus resources on companies and projects that have proven viable. For example, the U.S. has directly invested in the country's only rare earth mine, as well as lithium miners and rare earth recycling companies. Scott Dunn, the company's CEO, pointed out that when over % of the world's rare earths come from China, it is difficult to quickly change the status quo, and efforts should start with projects that have a proven track record of successful delivery.

The Future of Alliances: Coordination, Competition, and the Long Road to Decoupling

The Washington Conference has concluded, but the battle for critical minerals has just entered deeper waters. What the U.S. and its partners face is a complex chessboard intertwined with technology, economics, environment, and geopolitics.

First, internal coordination will be a protracted battle. The proposal to set a price floor demonstrates the intent to build a non-China market mechanism, but the specifics of how it will operate, who will lead it, and how costs and benefits will be distributed will test the political wisdom and spirit of compromise of all parties involved. Germany has hinted that the finance minister alone cannot solve all problems, requiring deep involvement from the foreign and energy departments. This indicates that future cross-departmental international negotiations will become more frequent and complex.

Secondly, interactions with China will exhibit a delicate dynamic of competition without rupture. Although the meeting aims to reduce dependence on China, China is currently still fulfilling its commitments to supply critical minerals to American companies and purchasing soybeans. This indicates that in the deeply intertwined global industrial chain, complete decoupling is neither realistic nor extremely costly. A more likely scenario is that the Western alliance attempts to establish a parallel supply chain, seeking autonomy in key strategic areas while maintaining connections with the Chinese market in general commercial sectors. How China responds to this alliance—whether by exerting pressure through pricing tools, consolidating advantages through its own technological upgrades, or participating in the formulation of new multilateral rules—will directly influence the direction of the game.

Finally, technological breakthroughs will be the ultimate variable determining victory or defeat. Whether it is Japan's exploration of deep-sea mining and refining technologies, or the investments made by various countries in rare earth recycling and the development of alternative materials, these may ultimately prove more important than competing for mineral deposits beneath a specific piece of land. The development challenges faced by Greenland and deep-sea resources precisely illustrate that possessing resources does not equate to having supply capacity. From geological resource quantities to economically recoverable reserves, and further to a stable, competitive supply chain, there lies a vast chasm of technology, capital, and environmental considerations.

This critical minerals alliance initiative, spearheaded by the United States and pursued by Europe through diversified pathways, is at its core a competition for future industrial dominance and strategic resilience. It reveals the profound anxiety over economic security among nations following the end of the golden age of globalization. Washington’s urgent calls, Europe’s insistence on sovereignty, Greenland’s resource mirage, and the technological gambles in the deep sea together sketch a new landscape of resource politics in the post-globalization era. The establishment of the alliance is only the first step; the real challenge lies in whether these nations, with their divergent interests, can forge a path that transcends zero-sum games and genuinely enhances the overall resilience of global supply chains. This path is destined to be long and arduous, yet its direction will profoundly shape the world’s economic and geopolitical landscape for decades to come.