Europe’s rare earth debate has largely focused on neodymium (Nd) and praseodymium (Pr) because of their critical role in permanent magnets for the energy transition, electric mobility, and industrial automation. Yet beneath this already significant dependency lies a quieter, more strategically sensitive exposure: heavy rare earth elements, particularly dysprosium (Dy) and terbium (Tb). While their tonnage is small, their impact is outsized. In defence and aerospace applications, Dy and Tb are not optional—they are the difference between functionality and catastrophic failure.
Why Dy and Tb Matter
Dy and Tb enhance magnets’ thermal stability and operational reliability, maintaining performance under heat, stress, and extreme conditions. This is crucial for:
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Electric vehicles, where motor efficiency and durability depend on thermal tolerance
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Defence platforms, where failure is unacceptable and substitution windows are virtually nonexistent
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High-performance systems such as fighter jets, precision-guided munitions, radar systems, submarines, and advanced electronics
Without Dy and Tb, Europe risks compromising defence credibility, even if civilian electrification projects continue.
Europe’s heavy rare earth vulnerability is both industrial and security-critical. The continent lacks:
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Secure access architecture
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Domestic midstream processing
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Control over refining and alloying operations
Dy and Tb are mostly by-products of other mining operations, tying supply to the economics and policies of unrelated industries. Furthermore, refining is geopolitically concentrated in jurisdictions beyond Europe’s control, creating a high-risk single point of failure. A supply disruption could spike prices, delay projects, or threaten operational continuity in sensitive systems.
A Strategic Reframing
Dy and Tb should no longer be treated as generic industrial inputs. They are elements of sovereign defence capability, requiring a security-first approach:
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Stockpiling:
Small volumes and high strategic value make stockpiling financially and logistically feasible. Reserves act as insurance against market or geopolitical shocks, ensuring continuity in critical systems. -
Controlled Refining Capacity:
Sovereignty depends on processing, not extraction. Europe must develop secure Dy/Tb refining and blending operations within its borders, under regulatory, environmental, and industrial oversight. -
Substitution and Innovation:
Investments in magnet technologies that reduce Dy/Tb intensity are essential parallel measures. These initiatives lower dependency while maintaining performance and strengthen Europe’s industrial edge.
South-East Europe: The Strategic Host
If Europe aims to internalize Dy/Tb refining, location matters. South-East Europe (SEE) provides the optimal combination of:
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Industrial chemistry expertise
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Skilled workforce adaptable to precision processes
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Cost-effective investment environment
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Political alignment with EU institutions
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Execution speed to meet urgent strategic timelines
SEE can host refining, alloying, and integration facilities tied directly to European defence supply chains, creating a resilient, institutionally anchored ecosystem.
Governance and Integration
Success requires coherent European-level governance:
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Align defence ministries, industrial bodies, and European institutions
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Coordinate investors and manufacturers under a common strategic framework
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Avoid fragmented, national-level initiatives that dilute effectiveness
Facilities should operate as integrated components of a broader rare earth ecosystem, linking Dy/Tb refining to Nd–Pr processing, magnet production, and recycling infrastructure. Fragmentation equals vulnerability; integration equals resilience.
Strategic rivals are weaponizing supply chains, and export controls have become standard instruments of statecraft. Heavy rare earth dependence is not a minor industrial issue—it is a structural vulnerability. Europe has already experienced the consequences of external dependence in energy systems. Waiting until Dy/Tb shortages disrupt defence or aerospace capabilities would be costly and reactive, leaving fewer options and higher strategic risk.
