In a World War II bunker east of Frankfurt, a steel door weighing over four tonnes protects Germany’s largest reserve of rare earths, a treasure at the heart of rising geopolitical tensions.The exact location is confidential and the site is under close video surveillance. This is where Tradium, a German company specialised in trading rare earths, keeps thousands of barrels of the precious materials — almost all from China, the world’s biggest producer.The materials in the bunker — such as dysprosium, terbium and neodymium — are essential for the manufacture of crucial modern technology including smartphones, electric cars and wind turbines.Tradium, which employs fewer than 40 people, expects to reach a turnover of 300 million euros ($346 million) this year.In the midst of the US-China trade war, Beijing imposed restrictions in April on rare earth exports, making them subject to licenses with stringent conditions. China controls over 60 percent of rare earths mining and 92 percent of refined production worldwide, according to the International Energy Agency.Germany’s flagship automotive sector is especially affected by the restrictions because it is dependent on rare earth magnets.China’s dominance in the sector has left European industry highly exposed.Matthias Rueth, president and founder of Tradium, said that “nervousness is rising” among his clients.For one industrial customer, any further shortage of rare earths “could go as far as halting production”, he said.”Our Chinese suppliers are naturally not very happy either” and would prefer open trade, Rueth said, adding that the Chinese government’s decisions had “tied their hands”.”The rest of the world is currently in a dilemma. There’s a shortage of these raw materials, prices are exploding, and no one really knows how things will turn out.”- Restrictions remain – China’s dominance of the rare earths market goes back decades.According to Rueth, at least since the 1990s Chinese governments have looked at the materials as an asset on a par with the Middle East’s oil reserves.Europe has never created a comparable mining industry, said Martin Erdmann from the Federal Institute for Geosciences and Natural Resources (BGR).He said Europe had preferred to “import these materials at lower cost from countries with less stringent environmental regulations”.The United States, which was the sector’s global leader until the 1990s, then “abandoned production for cost and environmental reasons, leaving China to dominate the market,” Erdmann told AFP. Although US President Donald Trump claimed that his agreement with Chinese counterpart Xi Jinping in late October meant the suspension of some of the restrictions related to rare earths, the reality is far less clear. According to Erdmann, “April’s restrictions remain” in place, with Beijing still requiring “mandatory licenses, which involve disclosing industrial secrets and proving that the material will not be used in defence industries”. Few European companies are able to accept these conditions.- ‘Already too late’ -About 15 years ago, Japan faced a similar rare earths crisis caused by difficulties with supply chains from China.In response, it developed alternative suppliers, notably in Australia, and built strategic reserves. For Europe, “it is crucial to learn the same lessons and invest massively,” said Erdmann. In 2024 the European Union adopted legislation to secure its supplies of 17 strategic raw materials.The Critical Raw Materials Act sets a 2030 target for at least 10 percent of rare earths consumed in the EU to be extracted within the bloc, along with 40 percent of necessary processing and 25 percent of recycling.However, meeting these targets will be complicated given that the rare earth market remains captive to “very low prices, probably deliberately maintained at this level” by Beijing, which aims to “prevent any profitable exploitation” outside China, said Erdmann. Rueth said that “our modern life entirely depends on these materials” but that finding an alternative when they become scarce “is very difficult”.Looking at the conundrum now faced by Europe to catch up in the race for critical rare earths, he said he has come to the gloomy conclusion that “it’s already too late”.

European and Asian stock markets retreated Friday after a slide on Wall Street following weak US jobs data and signals that the Federal Reserve will not cut interest rates this year.Growing worries that valuations, particularly among tech companies, are far too high following this year’s blockbuster rally added to the sense of unease on trading floors.Pressuring markets heading into the weekend pause was also weak Chinese exports data, the ongoing US government shutdown and some poorly-received earnings news, according to analysts.”Global stock indices are heading towards a weekly loss after pockets of volatility have knocked market sentiment,” noted Kathleen Brooks, research director at XTB trading group.”November is seasonally a strong month for stocks… The question now is, can seasonality outweigh valuation concerns and fears about the US economy to deliver more stock market gains this month?”A rollercoaster week looked set to end on a negative note after a report by outplacement firm Challenger, Gray & Christmas showed US layoffs hit the highest level in 22 years last month.The report found that this year has been the worst for layoffs since 2020, when the labour market was decimated by the pandemic.The Nasdaq shed 1.9 percent and S&P 500 more than one percent Thursday, with losses extending to Asia on Friday as Tokyo and Seoul closed down more than one percent.Losses among Europe’s main markets were about half-a-percent around midday.Investors have been forced to use private data as a guide to the state of the world’s biggest economy owing to the longest-running US government shutdown that has closed numerous departments.While the latest jobs figures came a day after news that private hiring had increased, it sparked fresh concerns about the labour market and put pressure on the Fed to cut borrowing costs for a third successive meeting in December.However, comments from central bank officials suggested another reduction was not certain, echoing boss Jerome Powell’s warning last week.Fed Cleveland chief Beth Hammack said she remained “concerned about high inflation”.And Chicago Fed boss Austan Goolsbee told CNBC he was concerned about making decisions during the shutdown without full data.Markets were pressured Friday also by official data showing China’s exports fell in October for the first time in eight months as trade tensions flared in the weeks before Chinese President Xi Jinping and US counterpart Donald Trump reached a detente.London’s top-tier FTSE 100 index was dragged down by heavy losses to share prices of online property business Rightmove and British Airways owner IAG, which dropped 13 and eight percent respectively following earnings updates that undershot market expectations.On the upside, British broadcaster ITV surged 15 percent after announcing it was in preliminary talks to sell its television and streaming business to US-owned rival Sky for £1.6 billion ($2.1 billion).- Key figures at around 1115 GMT -London – FTSE 100: DOWN 0.6 percent at 9,681.94 pointsParis – CAC 40: DOWN 0.4 percent at 7,934.59Frankfurt – DAX: DOWN 0.6 percent at 23,590.60Tokyo – Nikkei 225: DOWN 1.2 percent at 50,276.37 (close)Hong Kong – Hang Seng Index: DOWN 0.9 percent at 26,241.83 (close)Shanghai – Composite: DOWN 0.3 percent at 3,997.56 (close)New York – Dow: DOWN 0.8 percent at 46,912.30 (close)Euro/dollar: UP at $1.1549 from $1.1548 on ThursdayPound/dollar: DOWN at $1.3108 from $1.3135Dollar/yen: UP at 153.30 yen from 153.04 yenEuro/pound: UP at 88.12 pence from 87.91 penceBrent North Sea Crude: UP 1.0 percent at $64.02 per barrelWest Texas Intermediate: UP 1.1 percent at $60.11 per barrelburs-bcp/ajb/lth