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Belgrade
13/04/2024
Mining News

European Union’s ambitious plan: The Critical Raw Materials Act

The Critical Raw Materials Act (CRMA) is set to become law soon, aiming to ensure a stable supply of essential raw materials crucial for the European economy. With ambitious targets set for 2030, the European Union is taking significant steps to achieve this goal.

Scheduled to come into effect shortly, the CRMA marks a pivotal moment in European raw materials policy. The pressing economic need for a dependable supply of raw materials and primary products is increasingly evident, as evidenced by the expanding list of critical and strategic raw materials within the European Union, currently comprising 34 metals, minerals, and ores.

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However, despite the recognition of the need for action, implementing the CRMA poses substantial challenges. Key issues such as financing, potential free trade agreements, guaranteed purchase quotas, infrastructure expansion, and social acceptance of domestic mining remain unresolved. Furthermore, mining, separation, and processing projects typically entail long-term timeframes, with initial projects expected to operationalize within 10 to 15 years, making the CRMA’s 2030 timeframe optimistic yet tight.

Businesses involved in raw material trading and processing must assess the potential implications of the CRMA realistically. While ensuring a secure supply of critical raw materials is a commendable objective, doubts persist regarding the suitability of the law’s proposed measures and instruments. Can investments in European mining projects and the expansion of processing and recycling capacities significantly reduce existing dependencies? Countries like China have established strong positions, exerting market and pricing power, while Russia remains a key alternative source for many raw materials.

European purchasing departments face critical decisions concerning the price differentials of raw materials from China and Western partners, potentially complicating the law’s implementation. Therefore, constructive solutions that balance EU interests with international economic relations are imperative.

The CRMA aims to bolster supply security for companies and diminish reliance on imported critical raw materials. By 2030, the EU targets achieving specific goals:

  • Extraction capacity: At least ten percent of EU annual consumption.
  • Processing capacity: At least 40 percent of EU annual consumption.
  • Recycling capacity: At least 15 percent of EU annual consumption sourced from materials recycled within Europe.
  • Diversification capacity: No more than 65 percent of the EU’s annual consumption of any strategic raw material from a single third country.

Central to the CRMA’s implementation are strategic mining, recycling, and processing projects, which the EU aims to support politically, financially, and through expedited approval procedures. The law envisages shortened approval timelines, with a maximum of 27 months for mining projects and 15 months for processing or recycling plants.

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