Resources for Europe: Financing critical mineral supply chains
29 October 2025
Author: Petya Barzilska
Resources for Europe explores mechanisms that strengthen investment in critical mineral value chains, including cross-sector cooperation, partnerships that blend public and private capital through hybrid financing and offtake structures, and price-support mechanisms, as well as efforts to develop common standards.
Europe must strengthen and accelerate its policy and financial efforts, and work with allies and partners to address China’s dominance in the mining and processing of CRMs, which creates market and security risks. Repeated, prolonged disruption of industrial production lines can affect Europe’s ability to produce strategic technologies, cause economic downturns, and undermine strategic autonomy.
While joint action through the Group of Seven (G7), NATO, and the Minerals Security Partnership (MSP) is essential, given the scale of the challenge and the shared long-term risks, this paper focuses on what must happen in Europe to serve the continent’s strategic interests. Europe’s energy, economic, and national security depend on the implementation of a forward-looking industrial strategy, underpinned by faster deployment of financial instruments to support strategic priorities and integrated supply chains. This must be addressed with the same urgency with which European leaders worked during the COVID-19 pandemic and the start of the full-scale invasion of Ukraine.
Europe-wide coordination, across the EU and partners such as the UK, Norway, and Ukraine, is essential to Europe’s long-term resilience. Coordination efforts should include multilateral and national financial institutions, as well as export credit agencies (ECAs) and development finance institutions (DFIs). European public financial institutions should maintain a long-term mandate to support CRM activities critical to competitiveness, energy, and security, with permanent funding facilities focusing on strategic projects.
Strengthening transparency, communication, and coordination between public and private actors is essential to building a pipeline of projects across the complex CRM value chain and to directing capital where it is most needed. Public-private partnerships, including with private equity, specialised finance banks and insurers, can help to de-risk projects, support offtake agreements, and strengthen the whole CRM ecosystem, while the defence sector can act as an anchor for specific projects.
To prioritise and foster investment in strategic projects in and outside the EU, a broader trust-based CRM investment network should regularly convene multilateral and national public and private financiers, CRM project developers, and offtakers from EU and partner countries. Such a network should be developed in sync with existing EU initiatives focused on CRM - namely the EU Critical Raw Materials Board and the proposed Critical Raw Materials Centre - and managed by an independent third party with the necessary expertise. It could serve as both a blueprint and a long-term venue for public-private and supply-and-demand information sharing and cooperation in pursuit of Europe’s energy, industrial, and security goals. It would provide strategic focus and bridge the gap between high-level policy goals and individual stakeholder risk appetite.
Recommendations include:
Europe needs a European Minerals Investment Network (E-MIN) that convenes multilateral and national public and private financiers, CRM project developers, and offtakers from EU and partner countries. This will enable allied, cross-sector cooperation and foster investment in strategic projects along the supply chain through equity, debt financing, guarantees, and offtake agreements. Success will depend on capacity to develop projects with sustainable financing and offtake. Building such a network on the principle of structured public-private and supply-demand cooperation can lay the foundations for an independent, trusted and well-funded EU Critical Raw Materials Centre to monitor supply chains, support the procurement and stockpiling of materials, and ultimately build a more resilient CRM market.
The next EU budget (2028-2034) and proposed European Competitiveness Fund (ECF) must earmark sufficient funding for projects across the whole CRM supply chain, drawing not only from energy and decarbonisation budget lines, but also defence and space - consistent with NATO’s new defence- and security-related spending target. To support European security of supply and competitiveness, the proposed European Competitiveness Fund (ECF) must include a dedicated CRM facility to provide loans, equity and guarantees to projects that are integrated across Europe’s CRM supply chain. The EU’s new Scaleup Europe Fund should focus on riskier new CRM processes and technologies and transfer any accumulated CRM expertise to the new CRM facility beyond 2027.
Strategic alignment and institutional partnerships between European – and ultimately G7/MSP - public and private financial institutions must be deepened to pool expertise and accelerate investments in integrated CRM supply chains. EU and national public financial institutions and funding vehicles should have robust, long-term mandates and expertise to support CRM activities, in line with EU competitiveness, energy and national security goals. Partnerships with private banks experienced in commodity and mining finance should be deepened. European public financial institutions must coordinate funding and de-risking efforts with private investors and lenders, and develop a private equity ecosystem to support exploration, mining and processing activities. Partnerships between public financing institutions and private equity firms should leverage sector-specific CRM expertise and align investment with strategic EU objectives. Similarly, partnerships between export credit agencies and private insurers can leverage the latter’s risk management expertise to lower costs and improve project bankability.
The European Critical Raw Materials Board’s financing subgroup should aim to prevent duplication of efforts and actively coordinate funding mandates, timelines, and expertise-sharing across European financiers. Maintain a coordinated financing approach across countries within the EU as well as neighbours, particularly the UK, Ukraine and Norway, to enhance the efficiency and effectiveness of funding. Coordination efforts should include exchange of information/ expertise and strategic alignment of mandates, procedures and definitions across multilateral banks like the EIB, the European Bank for Reconstruction and Development (EBRD), national investment and development banks and funds, and ECAs.
Europe must build an environment conducive to offtake contracts with actors such as the automotive and defence industries for ex-China projects, and particularly focus on facilitating offtake under EU raw materials partnerships with third countries and the EU Global Gateway. Given integrated European supply chains, national funds and banks should support CRM projects with offtakers from across Europe - including the EU, the UK, and Norway - not just their home country. Coordinated EU level action through demand aggregation, collective purchasing, and strategic stockpiling under the EU Energy and Raw Materials Platform (or in the future, the CRM Centre) can strengthen the viability of low-volume strategic CRM projects, including by serving as “offtake agreements”. Such actions should also be coordinated with NATO and national procurement programmes. The defence industry can be an anchor offtaker, particularly for lower volume CRM projects such as heavy rare earth elements (REEs) processing and materials like titanium. By underwriting technological risks and offering offtake agreements, even for small quantities, the defence sector can help build a robust ecosystem that supports both civilian and military resilience. The public sector can use tailored and targeted price support mechanisms to de-risk projects and stabilise smaller CRM markets, while working to mitigate the risk of unsustainable fiscal burdens.
EU financial regulations should define clear, standardised environmental and social risk criteria for responsible mining to reduce uncertainty and enable greater participation by public and private investors. Standardised environmental and social criteria for the mining and processing industries should be recognised as essential risk mitigation tools that enhance long-term project value, reduce reputational and operational risks, and help to attract financiers and offtakers to CRM projects. Mining activities, including the extraction and processing of critical raw materials, should be considered sustainable investment when they meet appropriately high environmental and social standards. Criteria under the EU Taxonomy on Sustainable Activities should reflect the specific characteristics of the sector to facilitate investments in responsible mining and processing.
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