Europe’s debate on critical raw materials has long focused on mining, but the real pressure point lies further downstream. The continent’s true vulnerability is not only in discovering new deposits of copper, nickel, zinc or aluminium, but in maintaining the industrial plants that convert raw materials, scrap, and complex residues into usable metals.
Smelters and refineries are becoming Europe’s hidden strategic infrastructure. They produce copper cathodes, aluminium wire rod, zinc metal, lead, cobalt chemicals, nickel intermediates, and rare minor metals such as indium, gallium, germanium, and tellurium—materials essential for energy systems, electronics, defence manufacturing, and digital infrastructure.
These facilities already exist, with permits, grids, skilled labour, and customers in place. Yet they are increasingly fragile. And rebuilding them once lost is far more difficult than maintaining them today.
Europe’s smelting base under pressure
According to Trafigura CEO Richard Holtum, Europe has lost roughly 30% of its smelting capacity in the past decade, while remaining facilities face rising energy costs, carbon pricing, labour expenses, and global competition from heavily subsidised producers outside the region.
The issue is not lack of industrial importance—it is economics. Smelters sit between volatile raw material markets and price-sensitive downstream industries. Their profitability depends on treatment charges, electricity contracts, by-product revenues, and carbon costs. When all of these move in the wrong direction, even strategically critical assets come under threat.
Aurubis: copper refining as strategic backbone
The clearest example is Aurubis, Europe’s largest copper producer and recycler. Operating across Germany, Bulgaria, Belgium, and other sites, the company sits at the centre of Europe’s copper supply chain.
In FY 2024/25, Aurubis posted €355 million in operating profit before tax, down 14% year-on-year, reflecting weaker treatment charges and higher operational costs. Yet its strategic importance is growing, not shrinking.
Aurubis is expanding its Pirdop copper smelter in Bulgaria, investing around €400 million to boost cathode output by 50% to approximately 340,000 tonnes per year. The site is also integrating renewable energy and recycling capacity, aligning with Europe’s low-carbon industrial strategy. The message is clear: smelting is becoming more important even as it becomes harder to finance.
Boliden: resilience through integrated metallurgy
Sweden’s Boliden demonstrates a more integrated model, combining mining, smelting, and recycling. Its Rönnskär smelter is one of Europe’s most important hubs for copper, precious metals, and electronic waste recycling. After a major fire in 2023, Boliden committed SEK 4.8 billion to rebuild and expand the site’s electrolysis capacity to around 230,000 tonnes, with full recovery expected by 2026.
This investment is not just restoration—it is strategic rebuilding of Europe’s circular metals capacity. Rönnskär is central to turning scrap, e-waste, and complex residues into industrial metals, a capability Europe increasingly depends on for resource security and recycling policy goals. Boliden’s Odda zinc smelter in Norway is also expanding, increasing capacity from 200,000 to 350,000 tonnes per year, supported by Nordic financing and designed to improve energy efficiency. Zinc remains essential for construction, transport, offshore wind, and grid infrastructure, even if it receives less attention than lithium or copper.
Aluminium: Europe’s energy-sensitive weak point
The aluminium sector exposes Europe’s biggest structural vulnerability: electricity costs. Primary aluminium production requires extremely high energy input—around 13,500 to 15,000 kWh per tonne. As a result, energy prices determine survival.
Since 2008, Europe has lost roughly 30% of its primary aluminium capacity, with further disruption during the energy crisis following Russia’s invasion of Ukraine. Facilities such as Slovalco in Slovakia shut down entirely, while others were forced into curtailments. Even major players like TRIMET and Alcoa’s San Ciprián plant in Spain have struggled with high costs and delayed restarts.
By contrast, Norsk Hydro in Norway shows the advantage of stable hydropower-based production. With long-term contracts such as its €1 billion agreement with NKT, Hydro is supplying low-carbon aluminium wire rod critical for Europe’s expanding electricity grid infrastructure. Aluminium is increasingly not just a metal—it is a grid component material, directly linked to transmission expansion and electrification.
Zinc, lead, and by-product metals: the hidden value chain
Smelters such as Nyrstar, owned by Trafigura, highlight how fragile Europe’s base metals system has become. Plants like Budel (Netherlands) have been temporarily shut or restarted depending on energy conditions and subsidies. This volatility shows how quickly strategic capacity can disappear without stable policy frameworks.
Beyond zinc and lead, these smelters produce indium, germanium, and other minor metals essential for electronics, semiconductors, photovoltaics, and defence systems. Europe’s critical minerals challenge is therefore not just about mining—it is about protecting the industrial systems that already extract value from complex ores and residues.
METLEN: turning smelters into critical minerals platforms
In Greece, METLEN Energy & Metals is demonstrating how existing smelting infrastructure can evolve into a critical minerals production hub.
Supported by €90 million from the European Investment Bank, the company is expanding its integrated aluminium and alumina operations while targeting production of around 50 tonnes of gallium per year by 2028.
Gallium is not mined directly—it is recovered from bauxite and alumina processing streams, proving that smelters can become sources of strategic tech metals without new mining projects. This model reflects a broader shift: industrial metallurgy as a source of critical materials, not just base metals.
Europe’s hidden advantage: recycling and complex metallurgy
Some of Europe’s strongest capabilities lie in recycling and complex smelting systems.
- Umicore processes precious metals, battery materials, and industrial residues in Belgium and Finland
- Glencore’s Portovesme complex in Italy is being positioned as a battery recycling and metals recovery hub
- Aurubis and Boliden already process large volumes of scrap, residues, and e-waste
These facilities enable recovery of copper, cobalt, nickel, lithium, and precious metals, but also rare by-products such as antimony, tellurium, selenium, and germanium. The challenge is economic: these streams are only viable if recovery is supported by policy, pricing, and industrial demand.
Smelters as strategic infrastructure
Europe’s policy frameworks—such as the Critical Raw Materials Act and carbon border adjustments—recognise the importance of domestic processing, but they do not fully solve the structural issues of energy pricing, feedstock availability, and global competition.
Smelters require massive capital investment for:
- furnaces and electrolysis systems
- environmental compliance
- acid plants and filtration systems
- grid connections and renewable power contracts
- recycling and by-product recovery units
Yet their margins remain tightly linked to global commodity cycles. This mismatch is why many facilities are under pressure despite being strategically essential.
Defence, energy, and the industrial reality
Modern defence production depends heavily on smelting capacity. Metals such as aluminium, copper, zinc, nickel, lead, indium, and gallium are essential for missiles, radar systems, drones, aircraft, and secure communications. Without stable refining capacity, upstream mining alone is not enough. A shortage of refined metals can slow defence production just as quickly as missing components. Similarly, Europe’s grid expansion and electrification strategy depends on stable supply of aluminium and copper products from smelters.
The investment shift: from mining to metallurgy
The most strategic industrial assets in Europe may not be new mines, but existing smelters with upgrade potential.
Brownfield facilities such as:
- Aurubis Pirdop (Bulgaria)
- Boliden Rönnskär (Sweden)
- Boliden Odda (Norway)
- Hydro Karmøy (Norway)
- Nyrstar Auby and Balen
- Umicore Hoboken (Belgium)
- METLEN Greece aluminium complex
- Glencore Portovesme (Italy)
represent the core of Europe’s ability to convert raw materials into industrial power.
