Europe revives mining to reduce dependence on the import of key raw materials, supply from Serbia as competitive choice

European officials expect that the Law on Critical Raw Materials, which was presented last week, significantly improve the capacity of the extraction block, processing and recycling of key metals, such as lithium. The law aims to reduce dependence on third countries, while China currently dominates in the supply chain of numerous items on the European list of strategic metals.

The EU is also in the race with the United States, which already invest large funds in capacity to produce critical metals under the auspices of the Law on Defense Production and Inflation Reduction Act.

Europe may, however, has provided himself to himself through simplifying the procedures for issuing permits for projects, a painstaking process, which is often stretched for years before the first shovel hits the ground.

The law covers a list of critical minerals in the EU, with a special focus on battery metals, such as lithium, nickel, cobalt and manganese.

Copper is on the list as a driver of everything electricity, while aluminum and zinc are not, which could be a striking omission given the recent reduction of European production capacities.

While environmental organizations are concerned about Brussels plans to increase the exploitation of critical raw materials, the advocates of this approach say that it is necessary to achieve the green goals of the block.

The European Union wants to diversify the supply of critical raw materials by China and facilitate the use of mineral reserves needed to build green technologies, such as wind turbines and solar panels.

However, local population and environmental activists warn that reducing bureaucracy for projects of exploitation and biodiversity, pointing out that mining can cause serious water and soil pollution and lead to biodiversity forests.

This conflict between European appetite for critical raw materials and its ambitions to protect the continent – local protests are underway against new mining projects in Portugal, Germany, Sweden and Spain, which will only intensify after the adoption of new acceleration legislation Mining activities.

The draft rules suggest that the European Commission could be able to mark strategic plans of public interest, which would prioritize them in the event of a conflict with other EU legislation, for example with the law on conservation of species.

The reason for this is a fear that the EU cannot increase its reserves of key minerals without mitigating strict environmental requirements, which makes the opening of new mines represents a large bureaucratic headache.

Environmental ecologists claim that EU protection rules are necessary and to destroy local biodiversity in search of materials that would become climatic neutral either counterproductive.

Faster drilling

Getting a green light for a new mining project in Europe can take up to 15 years – something that the EU wants to improve in its critical raw material law.

According to the draft, the Commission will allow mining projects that are marked as strategic to receive short terms of two years for permits, with the aim of reducing its dependence on imports.

Although the EU cannot deliver all the raw materials they need, its most important lithium projects, for example, could satisfy 25 to 35 percent of European demand by the end of the decade. Currently, about 78 percent of Lithium in the Block comes from Chile.

Mining companies have long claimed that the issuance of licenses can only be accelerated if the EU agrees to alleviate some ecological rules, such as zero emissions into water, which is difficult to perform.

Mining projects in protected areas, although allowed, also must also undergo an additional impact assessment to show that it will not damage the site integrity.

Treatment of mining activities as projects from primarily public interest would solve a number of similar issues.

Since most well-known reserves of critical raw materials in the block is in protected areas or near them, the EU will have to concesses in nature protection if they want to exploit them, leaders say in the mining industry.

Green groups fought for long anti-expansion of mining in Europe, by favoring efforts to reduce consumption and sources of raw materials in other ways, including recycling and developing alternative materials.

In the light of the new plan of Brussels, they now call for the EU law on nature. However, they fear that the focus of law will increase the offer of raw materials at all costs, not limiting the impact of mining on the environment.

Non-governmental organizations and experts warn that the Commission shoots themselves in the leg if they ignore environmental concerns because protests against new mining projects could potentially disrupt EU goals.

Serbian “critical raw materials”

The demand for rare natural metals for wind turbines is expected to grow four and a half to 2030. Demand for lithium, the key battery element in electrical vehicles and devices will increase 11 times to 2030 and 57 times until 2050, according to the assessments of the Commission. However, only a small part comes from the EU mine.

The largest estimated lithium sites in Europe are in Germany, Czech and Serbia. Legs in Germany are located in large depths and require new extraction technologies that, among other things, can cause earthquakes, and whose environmental and economic sustainability is not yet sufficiently explored.

In 2021, Serbia has begun negotiations on Chapter 15, concerning energy, which implies the implementation of the relevant legal achievements of the European Union, the use of energy protection, the use of renewable energy sources and protection of competition to Serbia.

It remains to be seen whether the new European Regulation will re-open the issue of the controversial project Lithium Jadar.

Although neither new law or accompanying documents mention Serbia, increased cooperation with strategic partners around the world has been announced and it seems that Serbia will be an important point in future plans of European critical raw material mines.

Also, in Serbia, there are a borough bay, natural salts containing pine and are mainly used to produce glass, but also vital for plant growth, so they are in fertilizers.

In addition, they use for insulating homes and in car safety components such as airbags. Currently, the EU gets a huge majority, 98 percent, its borants from Turkey.

On the other hand, the Serbian exploitation mining company Belkanhan could become a primary supplier of EU graphite, which is also on the list of critical materials. It is used in pencils, batteries, steel furnaces, and can be converted into artificial diamonds.

BELKALHAN mine is based on a high quality graphite, with 4 million tons of reserves confirmed at only 25 percent of the project location. The mine is marked as a mineral deposit from national interest in the EU.

Potentially a joint venture partnership and investments will enable Belkalhan to integrate the graphite-based product chain for numerous lithium-ion batteries for electrical vehicles, fuel cells, graphene and nanomaterials, heat management in consumer electronics and smart consumer electronics and smart products buildings.

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.

Europe, Cornwall set for lithium mining boom

Forecasts suggest the UK will require around 80,000 tons of lithium a year by 2030, but almost 40 percent of that could come from under Cornwall.

The second great Cornish metals rush has begun.

Two-and-a-half decades after the closure of its last tin mine, the mineral-rich county could be on the verge of becoming a global player in the undersupplied metals market again.

This time, it’s not just tin which will be mined. As well as copper and tungsten, Cornwall is hoping to become Europe’s major provider of lithium, the metal used in batteries that power technology products from phones to electric cars.

By 2030, it is expected that Cornwall will be producing enough lithium to provide more than a third of the UK’s estimated requirement, just in time for the planned end of fossil-fuel vehicle production.

Five companies are leading the charge on the peninsular. One of them is Cornish Lithium, which by 2026 hopes to begin extracting around 10,000 tons of the metal each year.

“Back in the 19th century, miners started encountering very, very hot water coming into the mine,” says Cornish Lithium’s founder, Jeremy Wrathall. “It was salty and they didn’t know why because it was so far from the sea, right in the middle of Cornwall.

“They had it analysed by Professor William Miller of Kings’ College London in 1864, and he was the first to discover lithium in Cornwall. So, it’s been down there for a long time.”

Mr Wrathall, who gained more than 30 years of experience in the mining finance industry before launching his own exploration company, is confident that Cornish Lithium’s two sites in the county will play a major role in helping to make the UK a critical metals powerhouse.

“Every ton that we can produce in Cornwall is a ton less the UK has to import and a ton less associated carbon,” he said. “If[it’s coming in from China, that lithium is made with fossil fuels and you’re shipping it all the way over the ocean with fossil fuels.”

In total, the Government forecasts that the UK will require around 80,000 tons of lithium a year by 2030, but almost 40 per cent of that could be coming up from up to 2,000m under Cornwall.

British Lithium is hoping to produce 21,000 tonnes a year using sustainable, chemical-free, mining to produce its battery grade lithium carbonate from the mica in Cornish granite.

“We are delighted with the support we’re getting from local, national and international stakeholders and are feeling very positive about 2023 and all that lies ahead,” says British Lithium’s chief executive, Andrew Smith, who aims to begin production toward the end of 2025 at the company’s site at Stenalees, near St Austell.

While lithium production may be hitting the headlines, Cornwall is, once again, set to become a world player in tin.

The existence of tin in Britain can be traced back to 2000BC, but mining for the metal in Cornwall did not begin until around 1800BC. The county soon became an important producer of tin, which forms bronze when mixed with copper.

During the Industrial Revolution, the county established itself as a global player in the industry and remained so for much of the 20th century. It was not until 1998 that the final mine in Cornwall closed.

Cornish Tin is bringing mining back to the Great Wheal Vor for the first time in 150 years. The project involves 26 former tin and copper producing mines in Breage.

In 1929, the mining historian AK Hamilton Jenkin described the mines as “probably the richest tin mine which has ever been worked in the world”, and Cornish Tin’s chief executive, Sally Norcross-Webb, is planning to make the site globally significant once again.

“This is very high-grade tin with historic production grades of over 5.5 per cent tin,” she says. “Even assuming a current production grade of only 2 per cent tin this would be one of the top three tin mines by grade in the world today,” adding that the group is using “the best available technologies” as part of a commitment to green mining.

With tin used in the soldering of circuit boards in almost every tech product around, the Massachusetts Institute of Technology in the US has predicted a fourfold increase in demand for the metal by 2040 as the electric vehicle and energy storage revolution really takes hold.

“We will be producing clean tin and provide a domestic supply for UK industry of a critical mineral,” Ms Norcross-Webb says.

“When we’re in full production we will employ between 150 and 200 people, and for every direct job in the mining sector there are four indirect jobs created,” she adds.

It is forecast that the mining industry will bring up to 10,000 new jobs into Cornwall where salaries are lower than the UK average and a high proportion of people work in the seasonal tourism industry.

Europe, Lithium’s green potential

“Lithium and rare earths will soon be more important than oil and gas”, European Commission President Ursula von der Leyen said last September.

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.

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.

Lithium mines in Europe?

The European Union has a new plan that challenges the long-established dogmas of globalization, with its just-in-time supply chains and outsourcing the “dirty” work to the developing world.

It is one of the great paradoxes of our time: in order to overcome some of our dependencies and vulnerabilities — revealed in crises like COVID and the war in Ukraine — we risk falling into other dependencies that are no less toxic. The ecological transition, the digitalization of our economy, or increased defense needs, all pose risks to our supply of strategic minerals.

The European Commission published a plan this week to escape this fate by setting realistic objectives within a relatively short time frame, by the end of this decade.

This plan goes against the dogmas of globalization of the past 30 or 40 years, which relied on just-in-time supply chains from one end of the planet to the other — and, if we’re being honest, outsourced the least “clean” tasks, such as mining or refining minerals, to countries in the developing world.

But the pendulum is now swinging in the other direction, if possible under better environmental and social conditions. Will Europe be able to achieve these objectives while remaining within the bounds of both the ecological and digital transitions? That is the challenge.

EV batteries

The plan presented Thursday in Brussels lists these critical or strategic minerals, which are found in so-called clean technologies, such as electric vehicle batteries or solar panels, but also in satellites, computer equipment, or weapons. Demand is only growing: for example, lithium for electric vehicle batteries is expected to be multiplied by 12 by 2030, and the rare earths needed for wind turbines are expected to be multiplied by four or five.

The EU is asking its member states, in order to ensure the sovereignty of the continent, to plan to extract 10% of the needs from European soil by 2030. A lithium mine project is planned in France, after years of the country having abandoned any mining ambitions.

It is also asking for 15% of needs to be met through recycling, a rapidly growing and virtuous sector. Another objective is to limit the share of a single third country in the supply of a critical mineral to 65%, so as not to end up, as in the case of Russian gas, in the hands of a single supplier.

Caught between U.S. and China

We can truly question the ability of the 27 EU countries to succeed in both transitioning their model, creating new supply chains, reintroducing sectors of activity that Europe had turned its back on, and protecting their sovereignty. This is a dizzying challenge.

China has monopolized a good part of the mining resources in Africa and Latin America.

This notably involves the relationships that Europe will be able to build with the countries producing these minerals, because the current situation is problematic.

First, because China has increasingly monopolized a good part of the mining resources in Africa and Latin America, with a real vision that the West did not have.

China has also been willing to pay the price for the degradation of its environment, for example, to exploit rare earths that the rest of the world no longer wanted.

Europe has faced multiple major challenges in recent months, such as the future plans for electric vehicle batteries plan or semiconductors. Caught between the attractiveness of the United States with their cheaper energy and generous subsidies, and the hegemonic risk posed by China, Europe is also betting on the future in a real way, World Crunch writes.

Europe, Copper demand under pressure due to Green Deal

The world’s largest economies are committed to reducing carbon emissions by diminishing their reliance on fossil fuels.

They are building solar panels and wind turbines to make renewables their primary source of energy, and we can add electric cars to the list. However, all these ambitions require significant volumes of copper, a metal whose electrical conductivity makes it indispensable in the production of green technologies.

But the new green revolution, which will gain momentum in the coming years, comes amid a shortage of copper production.

Copper demand was under pressure in 2022 amid political tensions, economic slowdowns in the US and Europe and anti-Covid measures taken by China.

The red metal is now trading at around $8,300/tonne, after the price fell more than 20% from its 2022 peak in March. However, demand is set to grow in the medium term, while supply cannot keep up.

Under these conditions, Goldman Sachs analysts expect the price of copper to reach $11,000/tonne by the end of 2023.

Green technologies strain demand

The global transition to clean energy is moving fast, and as demand for green technologies grows, more and more copper is needed.

Renewable energy plants require on average 8 to 12 times more copper than fossil fuel forms of energy generation, and electric vehicles consume 3-4 times more copper than an internal combustion engine vehicle.

Current prospects for copper supply in the coming years are well below demand, as copper mines usually take more than a decade to develop, and relatively low commodity prices have discouraged investment in recent years.

“Quite frankly, this shortfall will have a dramatic impact on our ability to make the infrastructure needed for the energy transition – such as wind turbines, EVs and charging stations,” says Kate Southwell, General Counsel at Pala Investments, an investment company focused on raw materials needed to decarbonise.

“Copper cannot be easily substituted in these uses so it is highly likely to see cost increases that will ultimately be borne by consumers and OEMs.”

Since the severe financial crisis that began in 2008, many mining companies have focused their investments on short-term projects to maximise profits. Because copper prices have been relatively low, and opening new mines requires billions of dollars of upfront investment, copper mining has not been a priority, except for a few boom years in the early 2010s.

Romania, in last place in Europe in the exploitation of own resources

Romania, despite being a country with significant copper ore reserves, the largest in Europe, only makes little use of this advantage.

Canada’s Frasier Institute, recognized for its assessments of mining business opportunities around the world, showed in 2021 that out of 112 countries, Romania ranked 109th. Moreover, in terms of the exploitation of its own resources, Romania ranked last in Europe.

Currently, Romania produces around 55,000 tonnes of copper ore annually from the Rosia Poieni mine, owned by the state-owned company Cupru Min, and Baita, controlled by the British company Vast Resources.

The largest quantity, over 50,000 tonnes, is provided by Cupru Min, which holds about 60% of Romania’s reserves.

Last spring, Economy Minister Florin Spataru brought back to public attention Romania’s intention to build a copper ore processing plant after the non-ferrous metallurgy was destroyed more than 15 years ago.

However, under current conditions, the construction of a processing plant is not economically justified, given that a minimum quantity of 120,000 tonnes needs to be processed annually for such a plant to be even close to being profitable.

Another option would be to repatriate the copper resulting from refining the concentrate, experts say, but this is not being considered by the authorities.

For years, what Cupru Min extracts goes to China, and in addition to the quantities of copper that Romania’s economy loses, the other metals that result from refining the ore can also be added to the list of losses: selenium and tellurium, two vital elements for rocket engines and sub-assemblies that require materials with high temperature resistance, gold, and silver.

For example, the Phoenix Copper Smelter in Baia Mare used to produce 40,000 tonnes of copper per year, 12 tonnes of gold and 120 tonnes of silver per year, but it was all destroyed. In addition, Ampelum Zlatna used to produce 15,000 tonnes of copper per year, but this plant has also disappeared.

50,000 tons of ore for sale

Cupru Min sent its copper ore production to China in 2021 and 2022 through Trafigura Group Pte. Ltd. of Singapore, one of the world’s largest players in metals and energy trading.

For contracting the 2023 production, Cupru Min organised a new international tender in November 2022, and the opening of bids took place in mid-December last year.

The winner of the 50,000 tonnes of copper ore has not yet been announced.

Still waiting for mining to reopen

Moldomin, owner of about 30% of Romania’s copper concentrate reserves (approx. 200 million tonnes), was sold in 2021 to Turkey’s largest mining company, Eti Bakir.

But reopening mining here also raises a legislative issue. A new mining law was enacted in 2020, but although some time has passed since then, the National Agency for Mineral Resources (NAMR) has not adopted the methodological rules for its implementation. Among other things, they should also regulate the procedure for reopening closed mining operations.

Estimated shortfall of 50 million tonnes

While Romania has significant deposits but is not exploiting them to their true potential, Glencore, one of the world’s largest dealers of non-ferrous concentrates, is now looking at developing the huge El Pachon mine in Argentina.

Glencore CEO Gary Nagle forecasts a ‘huge shortfall’ of copper, which could reach a cumulative 50 million tonnes between 2022 and 2030. Even now, despite concerns about a global recession, the balance between supply and demand remains tight. Quantities of copper sold on international exchanges reach record low levels, covering only a few days of global consumption.

Large mines reduce production

According to the International Copper Study Group (ICSG), only two major copper mines have been opened between 2017 and 2021.

Currently, two greenfield projects, Kamoa Kakula in the Democratic Republic of Congo and the Quellaveco mine in Peru, are increasing production, but this growth is offset by operational problems faced by other major mines around the world.

In Chile, the world’s largest copper producer, production will fall by 5.8% in 2022, according to government estimates. Chile’s state-owned Codelco said production fell in the first nine months of 2022 and will fall further in 2023.

In December, Panama’s government ordered Canada’s First Quantum Minerals to halt operations at its Cobre Panama copper mine after it failed to agree on royalties under a new contract. Local community protests in Peru are also disrupting copper production and supplies.

Russia opens up a huge deposit

In Russia, the giant Udokan Сopper project is scheduled to start production this year, with an estimated annual extraction of 135,000 tonnes of copper ore.

With ore reserves of over 26 million tonnes, Udokan is one of the largest deposits globally. Located in Russia’s Far East, near the border with China, the deposit is ideally positioned to transport the metal to a country that accounts for more than half of the world’s copper consumption.

China, the big beneficiary of the Udokan deposit

While Europe is postponing some of its green energy projects due to economic problems caused by higher oil and gas prices, China is on track to achieve net zero emissions by 2060.

This country is already the world’s largest producer of electric vehicles, solar panels, and electric batteries. The country’s development plans include increasing renewable energy capacity and increasing the share of electric vehicles in total car sales.

These initiatives will require additional copper and the Udokan deposit is ready to meet China’s growing demand, Energy Industry Review writes.

Europe, Problems with minerals

Mark Mills, speaking at a recent conference held by Norwegian funds management group, SKAGEN Funds, said that expecting the global EV transition from ICE vehicles to take place in the same time frame as occurred in Norway was impossible because the global demand for electric infrastructure and EV-specific minerals could never be met.

He said the mining industry throughout time has never managed to increase production at more than 10 per cent a year yet the demands required under projections envisioned by the EV industry would require mineral production increases in some cases as high as 7000 per cent a year.

Mr Mills is a senior fellow at the Manhattan Institute and a faculty fellow at Northwestern University’s McCormick School of Engineering and Applied Science. He is also a strategic partner with Montrose Lane (an energy-tech venture fund) and has an early background in mining.

Mr Mills said that if the mining industry were to achieve the aspirations of the EV supporters it would be “the largest single increase in demand or supply of metals in all of human history. It has never happened.”

He said that a study by the Electric Power Research Institute, a nonprofit research group in the United States for the electric industry “reached the conclusion that it doesn’t look like it is structurally possible to make the transition in the way that is imagined.”

He said that an EV requires 400 per cent more metals and minerals to build compared to a conventional car and that people “are suffering some modest delusion about what the possibilities are in the mining sector”.

He asked: “Is it possible? Can the world increase the production of these kinds of metals, not by 10 or 20 per cent, not by 50 per cent, not by 200 per cent, but from 700 to 7000 per cent; and in timeframes that are meaningful, which is in the next decade or two?”.

Mr Mills said under the current levels of mining investment required to build the cars, batteries and electrical infrastructure to make that happen the energy transition envisaged, “the reality is that it will fall well short.”

“The world’s miners are not investing 90 per cent of what’s required, nor 50 per cent of what’s required. They’re not even investing 10 per cent of what’s required in global mining expansion to meet the aspirations to build quantities of machines (EVs, batteries, windmills, etc) to have the rest of the world follow Norway.”

He also warned that on average globally, it takes about 16 years to open a new mine.

“In very simple terms, that means that if tomorrow we started investing the necessary amount of capital in exploration efforts, it will be 16 years before the first mines that we need will be open.

“This is a long way after the aspirations have kicked in to build the quantities of batteries, windmills and solar arrays that the world imagines outside of Norway.”

He told the conference that another challenge was that globally the grades of ore (the amount of ore recovered per tonne of mined material) are declining.

“Over all of history, the grade of ore that we mined has been declining – especially for the higher value of metals like copper, nickel, molybdenum, and magnesium.”

He said that the world will be short of copper, fundamental to the EV transition, “in the next year or two.”

“Copper ore grades are typically 1 per cent which means you have to dig up a tonne of ore to get 10kg and that doesn’t count the tonnes of rock overburden that are in the way of the ore. So you dig up tonnes of material to get to kilograms of metal.

“It means that the world is chasing larger quantities of metals from declining ore grades which means that the larger quantities of metals that are produced, the larger quantities of energy will be consumed to produce those metals to deliver to markets.”

He said that the increase in energy consumption as ore declines is nonlinear and the energy consumed rises exponentially.

“This is a non-trivial problem. It means that the future of electric cars, the future solar module, the future wind turbines, carbon dioxide emissions and metal requirements are rising non-linear just to fabricate them.

“So never mind whether (the minerals) are available, the cost just to fabricate them (the energy transition) will require the world to consume fuels and emit carbon dioxide at levels that are frankly unprecedented in mining history. We will solve those problems in due course. But in the mining industry, those problems get solved over decades, not in years.”

Mr Mills warned that as the world chases more and more minerals for the EV transition that the world’s miners are not able to supply, there would be large inflationary pressures in EV minerals.

“So when you look at the aluminum, steel and nickel and cobalt and look at the cost of purchase to make a single EV, that cost per EV was around $4000 before metal price inflation really started to kick in and it doubled to about $8000.

“If the world chases more product than the world can supply, that’s the textbook definition of inflation.

“The question you would ask is how much inflation would we get … on metals as the world chases the energy transition? The underlying fact is prices don’t go down. They just don’t go down.

“If you have 16 years to add supply, on average, a decade at best, and you increase demand immediately, which we are now doing with policies everywhere in the world, you should expect prices to not only go up, but to perhaps go up a lot.”

Mr Mills produced data that suggested that the global energy transition plans would put pressure on metals “that will cause all metals to reach historic price levels for an unprecedented length of time.”

“If you cause metal prices go up 200 to 300 or 400 per cent, or in lithium’s case 1000 per cent, you will have a top-line effect on global inflation.

“This will impact wind, solar and battery and EV prices because they’re made from these metals. The whole demand pressure is coming from those metals. Almost the entire increase that’s been going on at the cost of building wind turbines, solar modules and batteries is the cause of the increasing costs of the mineral inputs.”

Mr Mills said that roughly 70 to 80 per cent of the costs of fabricating an EV battery today is in the purchase price of the materials and 80 per cent of the cost of a solar module is in the purchase price of the materials.

He said that “the much vaunted claim” that the cost of minerals will fall as production volumes increase is incorrect and that the industry should in fact see increases of 200 to 300 per cent.

“These are the rising real prices that governments can hide with subsidies for a while, but the real costs are going up.

“So on what possible basis are forecasters saying that metal prices are going to go down after they’ve been rising in the face of these kinds of demand pressures?

“I don’t think they’re going to go down but this is a bet that people are making,” Mr Mills said, Go Auto Premium News writes.

Europe, Raw materials are present in the ground all over the world but some are more common in certain areas than others

These minerals and metals are used in many technologies, from smartphones to wind turbines and electric car batteries.

And as countries around the world are setting out to reduce carbon emissions, the demand for clean technologies is increasing, and with it so is the demand for raw materials.

K.C. Michaels is a legal advisor and critical minerals expert at the Internation Energy Agency, an intergovernmental organisation analysing data on the energy sector worldwide.

“Essentially all of the clean energy technologies that we need to decarbonise the energy system require large amounts of minerals and metals,” he explains.

Electric vehicle (EV) batteries for instance need large amounts of lithium, nickel, cobalt, manganese and graphite. While rare earth elements are mainly used in permanent magnets for EV motors and wind turbines.

The European Union has established a list of 30 critical raw materials, mostly minerals, that are considered strategic to the EU’s economy and that have high supply risk.

But where do we get them from?

“The first challenge is the availability of those critical raw materials,” explains Dario Liguti, the director of sustainable energy at the United Nations Economic Commission for Europe.

“The production of some of those materials is highly concentrated in certain countries today,” he adds.

More than three-quarters of the global production of critical raw materials used for energy comes from just three countries.

China leads with 66% of the global supply share, followed by South Africa with 9% and the Democratic Republic of Congo with 5%.

And in some cases, a single country can be responsible for over half of the global output.

“For example, cobalt supply from the Democratic Republic of Congo is about 60 or 70% of the world production,” Liguti explains.

China also plays a huge role in refining, a necessary step before the materials can be used.

So for example, even though cobalt is primarily mined in the Democratic Republic of Congo, almost all of it goes to China for processing.

This concentration of resources can lead to major issues in supply, particularly for places like Europe, which produces very little in-house.

“If we imagine a world where there are ten suppliers of lithium and one of those suppliers has a strike or some sort of issue and a shutdown, there are a lot of opportunities to switch to other suppliers.

But if we imagine a world where there are only two suppliers and there’s a disruption from one, then there’s a really big impact,” Michaels says.

“Their demand is already right now explosive and it will only become so as the transition towards a less carbonised energy system becomes even more important,” Liguti says.

The International Energy Agency projects that if the world stays on track to meet its global climate goals and reach net zero by 2050, the overall demand for minerals is going to quadruple by 2030.

“This is a huge increase in just the next seven or eight years,” Michaels says.

“When we start to look at specific minerals, then the demand increase can be much higher. Specifically for lithium, it’s as many as 40 times, depending on the scenario,” he adds.

So can the current supply keep up with growing demands?

“There is a real risk that we won’t be able to ramp up production fast enough to meet these goals,” Michaels says.

“Even if we could have 100% re-use of all the minerals and metals that are out there today, we’re still not even close,” he adds.

According to Liguti, increasing production won’t be enough. “The quantities necessary for the green transition are staggering,” he says.

“The answer to that demand is not only through increased primary production, but it is as well through the increase of the recycling and the reuse of those raw materials, on establishing the circular economy, the traceability of those minerals, so we exactly know at which stage of the value chain those raw materials are,” he explains.

Securing the supply is not the only issue at stake. Mining can have a destructive impact not only on the environment but also on local communities.

“While we develop lithium mines and cobalt mines and manganese mines, even if the scale of operations is smaller, we don’t want to do the same errors that we did when we started exploiting oil and gas, ” Liguti says.

So we have to consider what happens to mines at the end of their lifecycle, he adds.

This means looking at “what to do with the mine, how to involve the local communities, how to account for negative externalities on the environment and mitigate those aspects”, he explains.

So how can we ensure a sustainable and ethical supply chain of raw materials?

One of the solutions, experts say, is supply chain diligence.

“Companies will be required to look into their suppliers and really try to understand where the materials are coming from, what the risks are and what they can do as purchasers to reduce those risks,” Michaels explains.

This principle will be used in the new EU battery regulations, to ensure that batteries on the European market are sustainable and circular throughout their whole lifecycle, from the sourcing of materials to their collection, recycling and repurposing.

“It can lead to real efforts to improve the situation because once the downstream companies, the purchasing companies and the car manufacturers become engaged, then they can bring about a lot of change.

They can speak to their suppliers, they can push for new standards and push for improvement,” Michaels adds.

Innovation can also play a big role in reducing the demand on raw materials.

New technologies can help improve how we use and mine these materials but also find alternative sources, develop substitutes and improve recycling.

“A raw material might not be critical a few decades from now as they were not critical a few years ago,” Liguti says.

“But they are critical now and we need to take care of that. So in 20 years, we don’t have to look back and say: “Oh, we did the same errors that we did 100 years ago when we started exploiting oil and gas”,” he adds.

To address this, the EU will adopt a Critical Raw Materials act on the 14th of March, 2023. The initiative aims to make sure Europe has a diverse and reliable supply of materials, and ensure social and environmental standards are respected, Euronews 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.

Battle for Lithium

In the hunt for lithium and other crucial minerals for the electric car supply chain, the United States must compete not just with Chinese competitiveness and manufacturing capability, but also with internal Western limits.

While the US does not appear willing to significantly change their Inflation Reduction Act, which will guarantee nearly $400 billion in “green” subsidies to companies operating in the US over ten years, and while the EU is preparing a response that could include a mix of further easing of state aid and the creation of a “sovereign” fund made up of the residues of the Recovery Plan and little else, but without the coveted (by the Italians) Eurobonds, Consider the case of lithium.

The price of this essential mineral for electric vehicles has more than quadrupled to $75,000 per ton by the end of 2022. It is required to seek for new sources and build refineries to process them. All of this, in accordance with Washington’s approach, without relying on supplies from Beijing or any other “hostile” country. According to the Financial Times, the Biden administration has given the Australians of Ioneer a 700 million dollar conditional loan to establish a mine and processing complex in Nevada. Mining might begin in 2026, but supply contracts with Ford and Toyota have already been struck. Production may support roughly 400,000 electric automobiles per year.

The Inflation Reduction Act’s public financial support for the supply chain is based, above all, but not exclusively, on benefits of up to $7,500 for buyers of electric vehicles produced by companies that procure components and raw materials in the United States or in countries with which Washington trades under a free trade regime, defined not as a formal treaty but rather as “friendship” and partnership.

The administration then invoked the Defense Production Act, a law enacted during the Korean War to direct domestic production toward the war effort, and has so far distributed 2.8 billion to approximately twenty companies involved in the electric vehicle supply chain, as well as activated agreements with Canada, the EU, the United Kingdom, and Australia to invest in critical extractive projects.

In the hunt for lithium and other crucial minerals for the electric car supply chain, the United States must compete not just with Chinese competitiveness and manufacturing capability, but also with internal Western limits. Beijing is aggressively forging partnerships in Africa and Latin America to get minerals in less demanding regulatory environments for use in its home refineries. In reality, China owns 80% of the world’s lithium hydroxide processing capacity, a structural advantage that will be tough to overcome in a reasonable amount of time. It is also required to address the internal limits associated with the mining activity’s permission processes. This is an objective problem in the United States, relating to environmental impact assessments.

Nevada has just one operational lithium mine, and another is awaiting a court decision after a fight with conservation groups safeguarding a rare species of wildflower. A similar tragedy befell a mining project in North Carolina, which failed due to environmental limits, forcing Tesla to rely on Canadian supply. The expansion of the EV chain necessitates mining, which has an environmental effect, as well as the building of processing capacity for these minerals, which necessitates time, money, and administrative difficulties. In the battle between Americans and Chinese, the latter has an obvious edge, owing to the relatively minimal limits imposed by local territory on the establishment of extraction and processing systems.

Europe is in the middle. Which engages in extractive project funding but risks being undermined by the appeal of American environmental subsidies? At the World Economic Forum in Davos, the White House’s special envoy for climate, John Kerry, asked the EU to move quickly on its own version of the Inflation Reduction Act, in order to shorten the development timelines of the Western approach. Because, in Kerry’s words, “money, money, money” is required. Even on our continent, attempts to build lithium mining and processing factories face stiff opposition from local residents.

Examples include the $2.4 billion Serbian Jadar mine project, which Rio Tinto’s Anglo-Australians aimed to exploit but which ended up stalled by the resistance of local communities, which led to the revocation of the initial authorizations by the Serbian government. Or the cancellation of a mining project in Portugal, by government decision.

To these obvious critical issues, which demonstrate that Green Mining is not an oxymoron, is added the European Chemical Agency’s (ECHA) request to classify lithium salts as dangerous to human health and, as a result, subject their extraction and processing to a more stringent and onerous regulatory framework. This might swing the cost balance in favor of imports rather than domestic manufacturing, with all of the associated geopolitical risks. The EU will have to give answers to these crucial operational and budgetary challenges. Keeping in mind that if the new “sovereign wealth fund” is simply a repackaging of the Recovery Fund’s unspent leftovers, individual nations with fiscal ability will act alone, posing a relative danger to the integrity of the single market, Europeans 24 writes.