Eurasian Resources Group highly commends the publication of the Critical Raw Materials Act

The European Commission recently released the EU Critical Raw Materials Act aimed at achieving climate-neutrality by 2050 and securing Europe’s sustainable and resilient economic growth.

Eurasian Resources Group, a leading diversified natural resources group headquartered in Luxembourg, highly commends the publication of the Act.

Pursuing ‘metals diplomacy’ through EU trade agreements and the Global Gateway strategy has the potential to strengthen sustainability and the resilience of critical raw material supply chains.

While addressing perceived risks around these supply chains in light of expected significant demand and growth, it highlights their importance for achieving net zero.

The Act focuses on strategically important Critical Raw Minerals (CRMs) that display a high risk of supply shortage.

ERG is one of the world’s largest producers of cobalt and the Group supports the EU’s insight into battery metals and global supply chains.

With an increasing demand for EVs and energy storage, ERG encourage global supply chain diligence to ensure global access to green transition metals.

As a leading copper producer, ERG is also pleased to note that, in the 2023 CRM listing, the EU has justifiably listed this metal as a “strategic raw material”.

Copper plays a significant role in achieving net-zero, particularly in electrification and decarbonisation technologies. Due to electricity networks and electricity-related technologies requiring significant copper supplies, the demand for this material in grid lines will most likely more than double by 2040.

Benedikt Sobotka, CEO of Eurasian Resources Group and Co-Chair of the Global Battery Alliance, said:

“The Critical Raw Materials Act is a milestone initiative which demonstrates the EU’s commitment to shifting towards a more resilient battery raw material supply. At ERG, we recognise the crucial role of sustainable mining in the green transition and we welcome the diversification of existing supply chains outlined by the Act through new international strategic partnerships. The Critical Raw Materials Act should be a very positive step forward in this regard, as well as towards European mineral security; however, its success will depend on adequate funding and prompt action. The EU will need to develop a robust and clear financial, operational, and regulatory framework that focuses on production scale-up which is easily accessible for the industry”, Global Mining Review reports.

Europe, Mining key minerals without destroying nature

For decades, the environmental and human cost of mining minerals like lithium and cobalt has largely been hidden from Europe’s view. That’s about to change.

As the EU looks to diversify its supply of critical raw materials away from China, it wants to make it easier to tap into domestic reserves of the minerals it needs to build green technology like wind turbines and solar panels.

But locals and green campaigners warn that slashing red tape for extraction projects risks taking a wrecking ball to decades of work to preserve nature and biodiversity, pointing out that mining can cause serious water and soil pollution and lead to deforestation and biodiversity loss.

In Tréguennec, a coastal area in Brittany in northwestern France, locals are living above what they say feels like a time bomb. Some 130 meters below their homes lies the country’s second-largest deposit of lithium, a key component of the batteries used to power electric cars.

Mining that so-called “white gold” would involve digging up a protected nature reserve located on a migratory route for birds and destroying “something that took millions of years to create,” said Philippe Spetz, a 69-year-old pensioner who lives in Tréguennec. “We will never get nature back,” he warned.

No company has applied to extract the resource yet. At the time, Bérangère Abba, who was then France’s junior minister for biodiversity, promised to “strike a balance” between protecting nature and mineral extraction. But locals and green groups worry the scales won’t tip in their favor.

This clash between Europe’s appetite for critical raw materials and its nature protection ambitions — already playing out across the Continent, with local protests against new mining projects in Portugal, Germany, Sweden and Spain — is only set to intensify after Brussels next week sets out new legislation to accelerate mining activities.

An undated draft of the rules, obtained by POLITICO, suggests the European Commission may allow strategic mining plans to be designated as so-called projects of overriding public interest, which would give them priority in the event of conflicts with other EU legislation, for example with species conservation law.

That echoes calls from industry groups, backed by liberal and conservative lawmakers, who argue that Europe can’t boost its supplies of key minerals without softening stringent environmental requirements that make opening new mines a major bureaucratic headache.

“I think that the way that we mine in Europe is probably… one of the best ones in the world. But we don’t get permitted to do mining,” said Mikael Staffas, CEO and president of Swedish mining firm Boliden. He added that Europe “happily imports metals from other parts of the world” that mine with far lower environmental standards.

But environmentalists and indigenous groups argue that the EU’s nature protection rules are a necessary safeguard, and that destroying local biodiversity in a quest to secure materials to become climate neutral would be counterproductive.

“We’re talking about this green transition. For me, it’s not green, it is black, because it’s going to destroy the rest of the nature that we have left,” said Matti Blind Berg, who heads the National Confederation of the Swedish Sami.

His community in the northern town of Kiruna has been fighting the expansion of the world’s largest iron-ore mine, which he argues has displaced locals and threatens their ability to herd reindeer.

Faster drilling

Getting the green light for a new mining project in Europe can take up to 15 years — something the EU wants to fix in its Critical Raw Materials Act.

According to the draft, the Commission will allow mining projects designated as strategic to benefit from permitting deadlines of two years, with the aim of putting the bloc on track to lessen its dependency on imports more quickly.

While the EU can’t supply all of the raw materials it needs, its most important lithium projects, for example, could satisfy 25 percent to 35 percent of Europe’s demand by the end of the decade, according to Michael Schmidt, a research associate at the German Mineral Resources Agency. Currently, some 78 percent of the bloc’s lithium comes from Chile.

Mining companies have long argued that permitting can only be sped up if the EU also agrees to relax some environmental rules.

The EU’s water laws, for example, require companies to pass “very high thresholds,” such as “zero emissions to water,” which is “quite difficult to do,” said Kerstin Brinnen, legal counsel at LKAB, a government-owned Swedish mining company.

Mining projects in protected areas, while allowed, also need to undergo an additional impact assessment to show they won’t harm the integrity of the site.

The industry has taken steps to minimize its environmental impact and compensate for damage to biodiversity, said Brinnen. But despite those efforts, “some kind of impact on the surrounding” area is “unavoidable.”

Treating mining activities as projects of overriding public interest would solve a number of those issues, she said. Industry bodies Eurometaux and Euromines have called for similar measures.

Because a majority of the bloc’s known reserves of critical raw materials are located in or near protected areas, the EU will have to make concessions to nature protection if it wants to exploit them, industry leaders say.

“Mining cannot be moved,” said Boliden CEO Staffas. “So unless you’re willing to kind of accept that, then the whole Critical Raw Materials Act will not really make any difference” because it won’t in fact make it any easier to start new mining projects.

That argument is getting traction among some liberal and conservative lawmakers in the European Parliament.

“We keep expanding protected areas, and we can’t afford that anymore right now,” said Hildegard Bentele, an MEP with the conservative European People’s Party.

Speaking during a plenary debate last month, MEP Emma Wiesner of the Renew Europe group said: “We can’t on the one hand say we want more raw materials and minerals. And then on the other hand, go regulate so it’s impossible to open a new mine in Europe”, Politico writes.

EU outlines new Critical Raw Minerals Act

The European Commission has announced the Critical Raw Minerals Act as the bloc competes in the green energy transition.

The European Commission (EC) has outlined plans for how the EU will compete in the development of new technologies necessary for the green transition against the US and China.

The Critical Raw Minerals Act, proposed by the European Commission on Thursday, seeks to reduce the EU’s dependence on raw minerals imported from beyond the EU. Along with the Net Zero Industry Act, it forms a part of the EU’s Green Deal Industrial Plan.

The region aims to not only lead the way in cutting emissions but also in producing the necessary technology to do so.

The EU executive set new targets for the bloc, stating that 10% of the raw critical material consumed by EU members, such as lithium and cobalt, should be mined in the region.

Additionally, 15% of its needs should be met by recycled sources and 40% of all critical miners used ought to be processed within the EU.

Diversifying supply

The EC has announced plans for no more than 65% of any key raw material to come from any single country as it looks to diversify its supply of minerals. China currently processes 90% of rare earth metals and 60% of lithium.

The EU states that recent global events such as “Covid-19 related supply disruptions, the chips shortage and the energy crisis following Russia’s invasion of Ukraine” demonstrate the need to diversify of raw earth mineral sources.

President Ursula von der Leyen said in a statement: “raw materials are vital for manufacturing key technologies for our twin transition, like wind power generation, hydrogen storage or batteries […] it’s in our mutual interest to ramp up production in a sustainable manner and at the same time ensure the highest level of diversification of supply chains for our European businesses.”

According to EU predictions, demand for lithium in the region is expected increase 12-fold by the year 2030.

The EC has announced that a Critical Raw Minerals Board will be set up, composed of member states and the commission, which will oversee the implementation of measures which are set out in the act.

The news comes shortly after the EC announced plans to triple renewables production by 2030, in a series of measures to increase the competitiveness of Europe’s net-zero energy industry, Power Technology writes.

Europe, “Lithium and rare earths will soon be more important than oil and gas”

The Commission chief pronounced these words as Europe was reeling from an energy crisis accelerated by Russia’ war in Ukraine and which led to the bloc pledging to wean itself off fossil fuels — most of which it has traditionally supplied from Russia — and accelerate its transition towards “homegrown” renewables and other green tech.

These, however, rely on so-called rare earths which are needed to produce everything from the latest generation batteries to the materials needed to manufacture photovoltaic panels.

“The urgency now is securing lithium supplies, it’s really really urgent,” Dr Evi Petavratzi, a senior mineral commodity geologist at the British Geological Survey told Euronews.

The United States Geological Survey estimates that Europe is home to 7% of global lithium deposits, enough to cover 80% of European battery needs.

Why are new mines so hard to open?

New mines currently take decades to get approved, due to fierce opposition by local people and politicians who are concerned about environmental and social consequences.

An example of this is the Norra Kärr rare earth element project in southern Sweden. Despite this deposit being found in 2009 and a 25-year mining licence being granted in 2013, no metals have been extracted.

The licence granting led to large protests over environmental concerns and the extraction licence was overturned in 2016 and a mine leasing application was rejected in 2021.

Speaking about the environmental impact of hard-rock mining, Dr Simon Jowitt, an economic geologist and associate professor at UNLV Department of Geoscience said: “There’s always a certain potential impact on the environment, on ground and service water.”

“Every mine is a little different in terms of that potential, but there’s always some. There’s also the risk posed by dust from mines.”

Most lithium is extracted by one of two methods: solar evaporation and hard-rock mining.

The biggest concerns with this form of extracting lithium are its high water usage, possible depletion of groundwater levels, and the waste salt which is left behind. Approximately 2.2 million litres of water is needed to produce one tonne of lithium using this method.

The other most common way of extracting this precious metal is through more traditional hard-rock mining, typically using opencast pits.

Not only are such pits an eyesore, but dust from such mines can also spread to surrounding areas sparking health and environmental concerns. Furthermore, the processing of the mined material can also use significant amounts of water.

However, it is important to put the risks involved in precious metal mining in the context of the benefit they bring from reducing fossil fuel extraction.

Higher prices enabling more complicated extractions

Increased demand for batteries — it is set to explode 14-fold between 2020 to 2030 — has pushed up the demand and price of lithium from about $20,000 per tonne five years ago to $80,000 per tonne last November and driven innovation into new, more expensive, mining methods that mitigate possible impacts on the environment.

An example of this is the proposed San José de Valdeflórez lithium mine in Spain’s Western province of Extremadura.

Originally proposed as an open-pit mine less than a kilometre away from the UNESCO mediaeval city of Cáceres and a natural reserve, the project faced fierce opposition from all quarters.

However, Extremadura New Energies (ENE), the Spanish subsidiary of Infinity Lithium, is now planning on building the mine completely underground with the entrance of the mine being located 2 km away from the city.

The material will also be crushed inside the enclosed mine, cutting the risk of dust pollution.

It has also unveiled plans to use patented technology which means the mine will not have to use sulfuric acid for lithium extraction, resulting in a zero-flow discharge mine. This dramatically reduces the risk of contaminating surrounding land water sources.

Additionally, the vehicles and mining operations will be powered by renewable energy, including from a new green hydrogen plant.

However, these mitigation methods were only introduced following objections by local people and authorities – highlighting the importance of local engagement in improving lithium mining.

Furthermore, although the deliberations and debates over the San José de Valdeflórez project resulted in a much-improved end project, it has been a long journey since it was first proposed in 2015.

Despite this, the project’s environmental impact has never been approved or evaluated. The company is currently seeking approval for an exploration permit and hopes to submit the project for environmental evaluation by April this year.

A local protest group, Salvemos la Montaña (Let’s Save the Mountain), has also gained significant support in its campaign against the project.

EU mining ambitions

The Commission wants Europe to build a more resilient supply chain to reduce its reliance on strategic competitors for imports and processing of rare metals.

In a document published last year, The Commission stated it could introduce targets into legislation, for example, that at least 30% of the EU’s demand for refined lithium should originate from the EU by 2030. Another goal is to ensure that the time from the start of exploration work to a mine or a refining facility opening is reduced to a matter of years, not decades.

To do that, it plans “to facilitate the roll-out of targeted raw materials projects in the EU” and for the Commission to be empowered to “list Strategic Projects – which would be labelled as of European interest – based on proposals from member states.”

Ramón Jiménez, CEO of ENE told Euronews he certainly believes that “it is possible to make this process faster without reducing environmental or social impact reductions”.

He said that his San José de Valdeflórez project had enjoyed strong support from the central Spanish government. However, convincing central governments may be the easy part, convincing local residents will be key if the EU really wants to boost its mining output, Euronews writes.