Europe’s retreat and the return of geoeconomics
Critical raw materials have become the point where the energy transition, industrial competition and strategic sovereignty converge. And this is where Europe is discovering its weakness. Between 1984 and 2023, European mining output fell by 56%, while Oceania, Asia, Latin America and Africa all expanded their weight in global extraction. In 2023, Europe accounted for just 5.4% of world mining production, down from 25.1% in 1984. This is not a simple economic decline. It is a loss of capacity, know-how and strategic autonomy. The picture is even darker because the share of global mining production coming from politically unstable or highly unstable countries rose from 56% in 1996 to 69% in 2023.
The reasons for Europe’s delay are now structural: too little general exploration, with EU spending stuck between 2% and 3% of the world total since 2010; difficulty moving from general to targeted exploration; permitting procedures that can last 3 to 4 years; environmental impact assessments stretching up to 27 months; mine development times averaging nearly 16 years from discovery to production, but potentially reaching 20; and weak bankability, since the probability that targeted exploration leads to a successful mining project is extremely low, roughly one in a thousand. Europe is entering the new resource race with the administrative tools of a tired power.
The materials that hold up the transition
The European Union has identified 34 critical raw materials and, within them, 17 strategic raw materials deemed essential for the energy transition, the digital transition, defense and aerospace. Of those 34, as many as 26 are directly involved in the green transition. They appear in 18 of the 26 materials used in hydrogen electrolyzers, in 11 for wind turbines, in 10 for lithium-ion batteries, in 9 for heat pumps and in 7 for photovoltaic panels. This alone shows that the issue does not concern a narrow industrial niche. It concerns the technological core of the next two decades.
According to the report’s projections, in a Net Zero 2050 scenario, the market value of six key materials for the transition — cobalt, graphite, lithium, nickel, copper and rare earths for magnets — would rise from 350 billion dollars in 2023 to about 1.072 trillion dollars in 2030, an increase of 206%. Lithium would post the most dramatic jump, up 870% to 331 billion dollars; copper would reach 364 billion, nickel 268, cobalt and graphite 39 each, and rare earths 31. In volume terms, aggregate growth would be 52% by 2030, but lithium would rise by 242% and graphite by 170%. Clean technologies, which accounted for 28% of total demand for these materials in 2024, would reach 50% in the most aggressive scenario.
Relative scarcity, absolute concentration
Scarcity should not be read in purely geological terms, but in economic and strategic ones. Copper, with 980 million tons of reserves, currently has about 43 years of remaining life, but that would fall to 29 years if demand reached projected 2030 levels. Nickel would go from 36 to 26 years, lithium from 128 to 53, graphite from 172 to 70, cobalt from 38 to 27. Only rare earths retain a very long theoretical lifespan, at 218 years, but rare earths are also where Chinese control is strongest.
Supply concentration is the real exposed nerve. For 22 of the 24 materials examined by Mediobanca, the top three producing countries account for more than 70% of global supply. In 16 cases out of 24, the leading country alone controls more than half of world output. China appears 16 times among the top three producers and ranks first in 11 out of 24 cases. The extreme cases are striking: gallium is 100% Chinese, niobium 93% Brazilian, vanadium 75% Chinese, silicon 87% Chinese, magnesium 86% Chinese, titanium 70% Chinese, graphite 78% Chinese and tungsten 79% Chinese. Cobalt is dominated by Congo with 74%, nickel by Indonesia with 67%, and lithium by Australia with 32%, ahead of China and Chile. Only one European country appears in this geography: Norway.
China’s supremacy is not only mining-based
The decisive point is that China does not merely extract. It refines, transforms and controls. In refining it holds 87.8% of rare earths, 77% of cobalt, 69.5% of manganese, 69.2% of lithium, 59% of vanadium, 53.9% of iron and steel, 52.3% of tin, 51.3% of lead, 46.9% of zinc, 45.5% of tantalum, 44.3% of tungsten and 42% of copper. This is a technological and scale advantage that Europe, burdened by higher energy costs, struggles even to challenge.
But the real control does not coincide with where the mine is located. What matters is who sits at the top of the corporate chain. Here the landscape changes. About two thirds of the countries endowed with critical minerals have more than half of their mining sector under foreign corporate control, and about one third do not control their own production at all. China built this superiority through targeted acquisitions. It controls 73% of rare earth extraction activities and 28% of cobalt extraction; it also holds 19% of lithium extraction control, 17% of copper and 18% of nickel on a production-weighted basis. The United States is strong in lithium at 31% and copper at 27%. Latin America weighs 22% in copper and 20% in lithium. Africa concentrates 16% of cobalt-linked extraction. The European Union, by contrast, ranges from 0% in rare earths to 18% in nickel, and even that falls to 4% once formally European holdings masking Russian interests are stripped out.
Europe is moving, but late and badly
The EU Critical Raw Materials Regulation set several 2030 targets: no more than 65% dependence on a single non-EU country for each of the 17 strategic materials; internal extraction to reach 10%, up from 8%; processing to rise to 40%, from 24%; and recycling to rise to 25%, from 12%. But the double limit is obvious: these targets are non-binding and formulated on an aggregate basis. In practice, out of 17 materials, only copper already shows an acceptable level of autonomy across extraction, processing and recycling. Tungsten and aluminum are in decent shape only in two phases. Cobalt performs well only in processing, at 92%. For everything else, the gap remains wide. Even the methodological basis is weak, since aggregate targets can be met without improving security for each individual material.
Italy: strong manufacturing, fragile foundations
For Italy the issue is even more concrete. In 2024, the value of critical and strategic raw material imports attributable to manufacturing and extractive sectors stood at 11.3 billion euros. Those inputs feed a system of 77,274 active firms generating 488.6 billion euros in revenue and 134 billion in value added. In other words, this equals 58% of total turnover and 61% of total value added in Italy’s extractive and manufacturing system. Firms with revenue above 50 million euros number only 2,162, or just 2.8% of the total. That is a decisive weakness: Italy’s productive structure is broad but fragmented, and many operators are too small to negotiate from a position of strength in oligopolistic markets.
The 17 most exposed supply chains are led above all by infrastructure and construction, automation, automotive and chemicals. And above all, firms using critical and strategic raw materials are much more concentrated in high and medium-high technology than Italian manufacturing as a whole. High technology accounts for 7.9% of their turnover and medium-high for 44.4%, versus 5% and 30% respectively for total Italian manufacturing. That means dependence on these materials strikes the most advanced and strategic part of the national production system.
There is another revealing figure. The value of these imports represents only 3.2% of total purchasing costs, and about 2.3% of sales in the manufacturing and extractive segment. So the problem is not their weight in accounting terms. It is their indispensability. They cost relatively little in overall cost structures, but without them entire supply chains stop.
The most fragile areas and the broadest exposure
In Southern Italy and the islands, 18% of the 77,000 firms involved — about 13,700 companies — generate 31 billion euros in sales. Here the share of firms with revenue above 50 million euros falls to just 0.9%, far below the national 2.8%. True, those firms show a better average EBITDA margin than the national total, 13% versus 11.3%, but their smaller size remains a structural weakness.
Beyond manufacturing, the sectors of electricity transmission and distribution, materials recovery and public utility construction account for more than 13,000 firms, 107 billion euros in turnover and 10.6 billion in value added, even though imports there represent only 0.4% of purchases. Added to that are wholesale trade and some consulting, transport support and research activities, absorbing another 6.9 billion euros of imports, generating 479 billion in turnover and 71 billion in value added, with more than 164,000 active firms. Taken together, all the affected sectors amount to more than 254,000 firms, around 1.07 trillion euros in sales and 215 billion in value added, equal to 35% of all Italian industry. The 18.7 billion euros of attributable imports represent on average 2.2% of consumption.
The political conclusion
The final point is clear. Italy does not suffer because critical raw materials are too expensive. It suffers because it depends on them at the decisive nodes of its industrial structure. The vulnerability is not in the balance sheet. It is in the value chains. When an input accounts for just over 3% of purchasing costs but underpins 58% of extractive and manufacturing turnover and 61% of value added, that factor is no longer just a commodity. It is an instrument of power. This is where the difference lies between a sovereign industrial system and an exposed one. China understood this years ago. The United States moved through industrial policy and strategic partnerships. Europe is still responding with regulations, aggregate thresholds and fragmented funding. Italy, a manufacturing power without raw materials and with insufficient scale in much of its business system, is the country that should read this issue most clearly as a matter of national economic security.
Source: Mediobanca, Area Studi, Materie prime critiche e impatto sulle imprese italiane, March 2026.
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