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.
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, 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.
The EU’s 30 critical raw materials
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.
Which countries account for most of the global supply of critical raw materials?
For many raw materials, a single country can be responsible for half of the global output.
For 19 of them, China is responsible for most of the supply.
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.