“Romanians will refine rare earth elements.”

Rare earth element refining becomes a new field of geopolitical rivalry—and a source of serious environmental disputes. First, there was much discussion about plans to open a refining plant in Puławy, Poland; now a similar project has been announced in Romania. In both cases, the raw material is to be transported from distant parts of the world, while the most burdensome part of the process will take place in countries in our region.

Poland’s promise in Puławy
The proposal to locate a rare earth elements (REE) refinery in Poland was met with great enthusiasm. The facility is planned on the premises of Grupa Azoty Puławy, and the investor is a Canadian company with a branch in Warsaw, holding capital of around PLN 5,300. The plan foresees building the plant in 2027–2028, powered by concentrate imported from central Africa.

From the beginning, there were doubts about the logistics and economics of the undertaking. Thousands of kilometers of transport, geopolitical risks, and rising freight costs raised questions about the project’s profitability. Today, an additional puzzle is the near-total media silence—despite earlier publicity, there have been no reports on preparations for the investment.

Romania enters the game
The topic of REE refining in Europe has re-emerged through Romania. The American company Critical Metals (CRML) signed a term sheet for a 50/50 joint venture with the state-owned Fabrica de Prelucrare a Concentratelor de Uraniu (FPCU). Together, they plan to build a rare earth elements processing plant in Romania and create a European supply chain for industry and the security sector.

According to the agreement, CRML will provide financing, prepare the project, and acquire rights to part of the produced concentrate. The key issue, however, is the raw material source—it comes from the Tanbreez deposit in Greenland. The distance between the deposit and the planned refinery spans several thousand kilometers, making the supply chain as “exotic” as in the Polish project, which is based on concentrate from Africa.

Exotic supply chains and the dirty side of green technology
Why do investors choose such costly logistics instead of building refining facilities near the deposits? The key lies in waste. Refining rare earth elements is primarily a chemical process, requiring large amounts of aggressive reagents and generating highly toxic effluents. Examples from Chinese refining centers show that improper waste management leads to soil and water contamination, destruction of local agricultural bases, and reduced life expectancy for residents.

In this context, choosing locations in Poland or Romania means that the most burdensome stage of the value chain is shifted to peripheral countries—closer to European consumers of the metals but farther from the decision-making centers of Western technology corporations. For the countries hosting the investments, it is a chance for jobs, tax revenue, and prestige from participating in a strategic sector. At the same time, they bear the risk of long-term environmental consequences.

These risks are particularly significant in regions already struggling with the legacy of heavy industry. Areas around potential plant locations must be prepared for costly emissions control, waste disposal, and long-term monitoring of impacts on residents’ health and local ecosystems.

Balancing benefits and costs
Access to rare earth elements is now a prerequisite for developing modern technologies—from wind turbines to batteries and electronics. It is no wonder that Europe is trying to reduce dependence on Chinese supplies and build its own supply chains. Poland and Romania, identified as potential refining sites, face a dilemma: how to reconcile economic ambitions and geopolitical expectations with the real protection of the environment and public health.

Romanians are following Poland’s example, declaring their readiness to host a REE refinery investment. Whether both projects—in Puławy and Romania—will actually be realized is still uncertain. What is already clear, however, is that discussion about them cannot be limited to slogans about “strategic independence” and “development opportunities.” Equally important is the question of who will bear the side effects of this new resource policy—and for how long.

Source: Biznesalert