Europe is blessed with many things but abundant and accessible mineral wealth and processing infrastructure are not among them.

Industrially, Europe has positioned itself as a centre of excellence for research and development and high-end manufacturing, insulated from the challenges of extracting and processing raw commodities. Politically, Europe has driven the global agenda in environmental, social and governance best practices. These policies have to an extent reinforced the region’s separation from the world of commodities.

All of this made sense in a world where supply chains were globally integrated. But the invasion of Ukraine has highlighted the risks of being too far removed from sources of supply.

Europe’s immediate priority is to find alternative sources of energy, given its dependence on Russian oil and gas. However, if the region is to remain globally competitive in manufacturing, most notably cars, then it also needs to secure reliable access to raw materials. Rare earths, industrial and battery metals are vital areas to prioritise, given the importance of lithium, nickel, copper and cobalt to electrification.

Decarbonisation of the global economy has been a cause that Europe has rightly championed. The region has developed the most sophisticated carbon credit market. It has also been the first to set clear thresholds for recycled content in electric battery manufacturing. The world is following the lead that Europe has established.

But European companies need reliable and affordable commodities to produce the goods required by a decarbonised world. In this respect, Europe finds itself not only far less naturally well-endowed than the US or Canada. It has also fallen far behind China which has been systematically building its supply chain in these critical minerals.

In the long term, China is unlikely to want to merely sell Europe battery materials or even batteries, but rather the consumer goods that they power. China understandably wants to retain as much of the associated value creation from its own investment in electrification. This poses a far more existential threat to Europe’s manufacturing base than the short-term gas shortage or even longer-term energy price inflation.

In order to be able to secure supplies of these critical minerals, European manufacturers must fundamentally review how they approach procurement. Western mining companies also need to rediscover their own appetites for risk.

The exploration and development departments of the western miners have been systematically downgraded over the past two decades. There has been an increasing focus on existing large-scale mines operating in developed countries, particularly North America and Australia. This trend has been far more pronounced within metals than in the energy markets. Even Latin American democracies such as Chile have come to be seen as being unacceptably high risk in terms of incremental capital.

Yet it is an unavoidable fact that the vast majority of reserves of critical minerals are not located in first-world geographies. The west, particularly Europe, cannot afford to neglect developing markets in this way. Investors and NGOs should both recognise that their influence here has been and remains substantial.

There is an opportunity for Europe to take the lead in reconnecting the best exploration and development projects with capital where it is most abundant and responsible. The ESG leadership Europe has championed need not be sacrificed, rather it should form a blueprint for the development of emerging markets, particularly Africa, where so much of the incremental supply resides.

There are also substantial opportunities for Europe to help develop the processing sectors in these emerging economies. This will enable developing counties to share more of the total value of the underlying materials mined there. Initiatives such as the Fair Cobalt Alliance should be supported and replicated.

Perhaps the DRC will not yet manufacture European cars, but there is no reason why it should continue to export unrefined ore, wholesale, to China. European manufacturers must also reassess how they secure reliable long-term supply of materials. This will perhaps include direct investments in mining assets.

Europe also needs to rebuild its own refining and smelting capacity, especially given the increasing importance of recycling to decarbonisation. The current “not in my back yard” position can only be changed by government policy.

Energy costs will remain an issue, but this must be balanced with security of supply. Europe can no longer afford to outsource everything which is challenging, dirty or can be done cheaper elsewhere.

Europe collectively needs to address the challenges made evident by the war in Ukraine or it risks becoming a manufacturing museum and merely a holiday destination.

Paul Smith is the non-executive chair at Trident Royalties

The Commodities Note is an online commentary on the industry from the Financial Times