Europe’s plans to tap into Australia’s stocks of critical minerals and rare earths to reduce dependency on China look set to be scuttled by a breakdown in free trade agreement talks, leaving the bloc badly exposed to future supply chain and geopolitical disruption.

Monday’s announcement that negotiations were being put on ice due to a stand-off between Australia and the European Union sparked frustration within federal Labor, with some government figures noting the lessons of the COVID-19 pandemic on the risk of over-reliance from limited sources.