Critical minerals are back in the headlines. Since Liberation Day last April, China has increasingly tried to exert its dominance over supplies of gallium, antimony, graphite and rare earth elements using export controls to aggressively counter the "America First" agenda. Suddenly, US manufacturers, producing everything from electric vehicles to semiconductors and advanced weapons, found themselves suffering from critical supply disruptions. To say Washington is displeased would be a profound understatement.
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Mike Clements
Fund Manager
Strategic Minerals, Strategic Mistakes? Europe Watches as America Acts
Meanwhile, Europe faces the same dilemma, but with double the complexity. Caught in the crossfire of two superpowers, the EU has recognised the urgent need to decouple from Chinese supply chains. However, the Continent is simultaneously reeling from the political earthquake of Donald Trump’s ambivalence towards NATO, forcing European capitals to pivot toward massive, unplanned defence spending. The solution to both problems is clear: bolster domestic resilience. But with the US acting more as a competitor than a collaborator, achieving that resilience is an uphill battle.
Europe’s primary hurdle is its own consensus-driven approach. Compared to the hyper-proactive US administration, Brussels moves at a much slower pace risking being left behind. The divergence in approach to critical mineral policy is a case in point.
In 2025, the US government shifted from grants to direct intervention, making numerous investments in domestic mineral firms. This includes an unprecedented 15% stake in MP Materials, the largest integrated rare earth producer in the US and a 5% stake in a lithium project in Nevada.
Most striking is the recent unveiling of Project Vault: a massive $12 billion Strategic Critical Minerals Reserve backed by the US Export-Import Bank. Supported by industrial heavyweights such as Boeing and GE Vernova, this stockpile aims to insulate US factories from global shocks.
In contrast, the European Union’s Critical Raw Materials Act (CRMA) feels cautious. While it sets ambitious targets, namely that 10% of demand is mined locally and 40% processed within the EU, the associated 47 projects designated as “Strategic” are mainly supported by streamlining permits and attracting private capital. The European Investment Bank (EIB) has committed around €2 billion in 2025 to bolster investments across the value chain, mostly in the form of loans and advisory support, but this remains a far cry from the US’s more direct investment approach.
Paradoxically, Europe’s muted response is creating a unique opportunity for investors. While MP Materials’ shares have soared on the back of US government backing, European plays like Vulcan Energy Resources (lithium) and Talga Group* (graphite), have lagged behind. In a world where supply chains are being rapidly redrawn and resource nationalism is moving up policy agendas, companies that can help increase European resilience may soon become the focus of investor attention in the same way that the defence names did in 2025.
*Note that both Vulcan Energy Resources and Talga Group primary share listings are in Australia but their operations are squarely focused in Europe.
Mike Clements, Fund Manager
Pras Jeyanandhan, Fund Manager
Contact Details:
Fund Manager: Pras Jeyanandhan – [email protected]
Fund Manager: Mike Clements – [email protected]
Head of Distribution: Theresa Russell – [email protected]
Data source (unless otherwise stated): Bloomberg
Disclaimer
All information about the VT Tyndall European Unconstrained Fund (‘The Fund’) is available in The Fund’s prospectus and Key Investor Information Document which are available free of charge (in English) from Valu-Trac Investment Management Limited (www.valu-trac.com). Any investment in the fund should be made on the basis of the terms governing the fund and not