EU wants to mine its way out of reliance on China for raw materials
The EU knows it’s heavily dependent on foreign powers like China for valuable materials needed to power its green transition.
Europe wants to start mining its own backyard in an attempt to end reliance on China for raw materials crucial for green technologies like electric car batteries.
But for the Europeans who live near mineral-rich grounds, opening new mines — with their potential for local environmental damage — is out of the question.
“It’s been my family’s home area since time immemorial,” said Carina Gustafsson, a campaigner who lives near a major reserve of rare earth minerals in southern Sweden that’s a potential mining site. “I really feel like it’s personal — this mining is threatening in so many ways.”
The pushback from campaigners like Gustafsson around the bloc is causing a headache for EU leaders.
Critical raw materials like lithium, cobalt and rare earth elements are found in technologies ranging from electric vehicle batteries to wind turbines and solar panels — tech that lies at the heart of the bloc’s push to go carbon neutral by 2050.
For now, the EU depends in large part on autocratic regimes for its supply of these materials, especially China, which provides nearly 98 percent of the EU’s supply of rare earths.
“Lithium and rare earths will soon be more important than oil and gas,” European Commission President Ursula von der Leyen said last month. “Our demand for rare earths alone will increase fivefold by 2030.”
To avoid the risk of being cut off, Brussels is cooking up new legislation expected in the spring to diversify where it gets these materials from, including by starting new mining projects.
Yet in order to ensure a steady pipeline of such materials and avoid potential blackmail by autocratic providers, the bloc needs to revive certain industrial activities that its environmentally conscious residents would prefer not to have to worry about again.
The EU woke up to its reliance on foreign powers for this green gold dust late in the game, developing its first strategies on raw materials in the late 2000s.
“The overall situation in terms of China has become even worse over time and around 80 percent of all critical raw materials [are] coming from China,” said Frank Umbach, research director at the European Centre for Climate, Energy and Resource Security at King’s College London.
The country entered the raw materials market in the mid-1980s and quickly became a major supplier.
Part of China’s strategy is not only to control raw material mines at home, but also abroad, he said. The Democratic Republic of Congo — where Chinese companies have already invested billions of euros — supplied about 70 percent of the cobalt in 2021.
Beijing has a “record of blackmailing this dependency,” Umbach said, pointing to a two-month embargo China imposed on rare earth exports to Japan in 2010. Tokyo had captured a Chinese fishing boat in Japan-controlled waters that have long been also claimed by China.
Such incidents risk becoming more frequent, Umbach warned.
The European Commission is acutely aware of the danger. As part of its plan to avoid replacing one dependency with another, the EU executive seeks to establish priority mining projects within the bloc — and ensure they can benefit from streamlined permitting procedures and private investments.
Many countries — including some with ongoing mining projects — support the plan. A Franco-German paper calling for greater financing for raw material production within the bloc last month received support from several countries including Denmark, Ireland, Poland, Greece, Portugal, Finland, Belgium and Romania.
But while the EU executive may have these countries on board, it faces a harder time convincing local residents.
Mining still has a “dirty” image, conceded EU Internal Market Commissioner Thierry Breton in a blog post. Environmentalists warn that the possibility of opening new mines within the block risks harming biodiversity and polluting groundwater. That’s making local residents aware of the environmental cost of the green transition — currently being paid by communities on the other side of the globe.
The trade-off is being felt acutely in Jönköping county, Sweden, home to the EU’s most notable deposit of heavy rare earth metals, an area of forest and farmland named Norra Kärr.
Campaigners have long fought back against attempts to mine it. The proposed site is located nearby a Natura 2000 area — meaning it’s protected by EU law — and uphill of Lake Vättern, Sweden’s deepest and second-largest lake which provides 250,000 people in Sweden with fresh water.
Most recently, Canadian company Leading Edge Materials presented a plan for an open cast pit. The proposal has sparked intense debate in recent years — but campaigners have so far succeeded in staving off the plans.
“It has been the sustaining life force and still is — not just for humans but for farmlands,” said Gustafsson, the Swedish campaigner. “[The plan] is mental to me. Mentally insane.”
The situation is a microcosm for the puzzle of how to marry the hunt for green transition technologies with protecting valuable water sources, biodiversity and sustainable agricultural livelihoods, said geologist Julie Klinger. “The potential [environmental] fallout from [mining Norra Kärr] is really quite serious,” she added.
The mining project’s future remains in limbo.
The project is far from the only contentious mining plan in the EU. From lithium mines in Western Spain and Central Portugal, to a copper mine in Romania — where opponents have been buying up land within the project development area — campaigners could hamper the EU’s attempt to mine its way out of China’s monopoly.
Umbach, the King’s College London researcher, said that where “promising projects” emerge in Europe, they run “immediately also into local environmental protests. So it’s obviously difficult.”
Other aspects of the Commission’s plan might hold more promise, according to Klinger, the geologist. While the EU may need to open new mines, she said, this should be a “distant third [choice] behind reprocessing waste and behind recycling,” adding that Sweden is also reprocessing mining waste to extract rare earth elements.
In addition to strong pockets of local resistance, mines can take a long time to start producing, she pointed out — the EU needs new supplies of critical raw materials yesterday.
NGOs also want to see the EU think more about how to reduce consumption, by promoting public transport over the production of new electric vehicles, for example.
“The EU really focuses on the supply side, but you should really think about the demand side, it’s much more important,” said Benjamin Sprecher, an assistant professor at TU Delft.
He expects the EU to go through “a long period of making many mistakes … The question is whether we can afford that long period”, Politico writes.
Can Finland and Sweden help decarbonize EU economies?
Demand for key metals is booming. Geopolitical realities and pandemic-related supply chain issues are increasing the pressure on EU countries to proceed with mining activities of their own to decarbonize their economies.
The European Union wants to decrease its dependency on Russian fossil fuels while accelerating its decarbonization effort. Metals and critical raw materials will play a pivotal role. Minerals, especially lithium, are most needed for clean-energy technologies. Relevant mining activities are concentrated in Asia, Oceania and South America.
Finland and Sweden, the two European countries currently applying for NATO membership, have a long mining tradition and could help solve the EU’s deficit, but question marks remain.
“We are the most important mining countries in the EU. Sweden alone produces over 90% of all the iron ore produced in the EU, Maria Suner, CEO of the Swedish Association of Mines, Mineral and Metal Producers (Svemin), told DW. However, that’s just a little over a quarter of what the bloc needs, meaning that the EU still has to import 70% of its iron ore, she added.
Finland and Sweden also share the mineral-rich Fennoscandian bedrock. According to Suner, the solid rock beneath the Scandinavian and Kola peninsulas has the potential to provide everything that’s on the EU list of critical raw materials.
The European Commission compiled a list of critical raw materials (CRMs) in 2011. Economic value and supply risk are the two criteria used to determine the importance of the materials. The list is getting longer.
Russia and supply security
Russia’s invasion of Ukraine is the major reason for Finland and Sweden to apply for NATO membership, and arguably, to step up mining in the medium term.
Svemin’s CEO says the focus on mining increased due to the COVID pandemic and ensuing supply chain disruptions, but more so after Russia invaded Ukraine. It has added to the increase in demand, pushing raw materials prices to a new high.
China is the top producer of graphite and rare earth materials. According to data from the International Energy Agency, it also refines 87% of the rare earths, 65% of cobalt, 58% of lithium, and 35% of nickel. Russia is the second-most-important country in the world for nickel extraction and the third-most-important for cobalt extraction.
“If there’s more support for mining activities in Europe, I don’t see that as a result of Russian hostilities. It’s more a question of whether Europe has woken up to the fact that it lacks metals,” Pekka Suomela, executive director of the Finnish Mining Association (FinnMin), told DW.
Land competition is always an issue in Nordic regions with a focus on forestry. Increased mining is opposed by many environmentalists citing the need to protect biodiversity.
In March, when the Swedish government allowed the exploitation of the Scandinavian country’s largest unexploited iron ore deposit, Swedish climate protection activist Greta Thunberg and the Fridays for Future movement said Sweden was “waging a war on nature.”
Finland, Norway, and Sweden are the least densely populated countries in Europe, which might theoretically be a plus for mining activities. Nonetheless, many scarcely populated areas are protected.
“Almost half of the Swedish territory is reindeer herding area for the Sami people, the only Indigenous people in Europe,” said Suner. “But the area needed for mining is very limited and we know how to minimize the impact.”
In the EU, it can take up to 25 years from the exploration phase to the start of commercial mining. Svemin has proposed 27 reforms, including shortening the permission procedures. Worries about the medium-term environmental impact often clash with long-term decarbonization efforts.
While EU member states are responsible for mining legislation, Brussels deals with aspects related to health, water and land usage.
The current geopolitical situation might increase social acceptance, but caution is needed. According to Suomela, the European Union must be careful not to put too much pressure on any single country to avoid local resistance that could easily shift public opinion.
Another possible future obstacle has to do with energy prices. They remain fairly moderate in northern Sweden and Finland, well below the levels reached in central Europe. But an increase in mining activities requires coherent investments in energy assets.
“The mineral and mining sector is planning for a tenfold increase in electricity use by 2050,” Suner commented. “Additionally, we have other projects for battery production and fossil-free steelmaking. Such projects are not covered by the electricity production we have in Sweden today.”
Estonia, another country bordering Russia, is active in the cleantech supply chain, hosting the only commercial rare earth processing facility in Europe. The facility is owned by Toronto-based rare earth materials technology company Neo Performance Materials. The company launched an initiative in 2020 to expand the supply of rare earth feedstock to their Sillamae processing facility near the Gulf of Finland.
Constantine Karayannopoulos, Neo’s president and CEO, told DW that the war in Ukraine caused refining companies to look more closely at their global supply chains. “Neo is no exception,” he explained, recalling that its supplier in Kola, the Russian peninsula, had been a reliable supplier for over 40 years.
“Geopolitical considerations are always a factor, but our primary driver remains customer demand,” said Karayannopoulos.
Right now, it looks like demand will increase. According to the European Association of Metals (Eurometaux), lithium usage in clean technologies could increase by a staggering 2,109% by 2050. Demand for dysprosium, tellurium and scandium is expected to more than double over the next 30 years, DW writes.
European Lithium welcomes Austrian mining minister’s call
The company expects minister Elisabeth Köstinger to visit the Wolfsberg Lithium Project early in 2022.
European Lithium Ltd (ASX:EUR, OTCQB:EULIF) has welcomed a call from Austrian Minister for Agriculture, Regions and Tourism Elisabeth Köstinger to accelerate the domestic extraction of raw materials to make Austria more independent of imports.
Köstinger, whose ministry is responsible for mining and raw materials since 2017, also wants to promote a circular economy and cooperation with resource-rich countries.
European Lithium, which is advancing the Wolfsberg Lithium Project in Austria, welcomed the minister’s call as it completes key milestones toward development.
The company recently tabled an analysis of lithium carbonate and lithium hydroxide produced using samples from the Wolfsberg Lithium Project.
Importantly, the results demonstrate that high-quality, battery-grade lithium product can be produced from Wolfsberg with very low impurities.
Raw Materials Master Plan 2030
Elisabeth Köstinger, together with the president of the Federation of Austrian Industries Georg Knill, recently presented the “Raw Materials Master Plan 2030”.
Together with the industry, the ministry has defined 75 measures in the master plan by which the Austrian mining industry is to be strengthened and resources are to be better used.
The plan highlights the environmental advantages of mining and processing raw materials in Austria compared to less strict conditions in other parts of the world.
“Austria is heavily dependent on imports for raw materials,” said Köstinger during the master plan presentation.
“China and South America dominate the market, and there are always delivery bottlenecks.”
As an example, Köstinger cited the blockade of the Suez Canal by a pinned container ship this spring.
“An even more recent example was the shutdown of coal-fired power plants in China during the Winter Olympics to improve air quality,” added Köstinger.
“As a result, the magnesium supply was massively restricted.
“We can still feel the effects on the European market today – on the one hand massive delivery bottlenecks, on the other hand the prices have risen many times over.
“That is why one must accelerate the extraction of raw materials in Europe and Austria to become more independent and more crisis-resistant.
“This would also boost the labour market as the raw materials industry currently employs around one million people in Austria and contributes around 90 billion euros to GDP.”
Raw materials for energy transition
“The energy transition is also contributing to the increase in the demand for raw materials,” said Köstinger.
“In the Renewable Expansion Act, for example, very ambitious targets for the expansion of photovoltaics have been set, but mineral raw materials are required for this.
“Some of these can be obtained in Austria.
“Numerous raw materials such as silicon, indium, gallium and, above all, germanium have to be imported from other European countries so that the photovoltaic systems can be built, and electricity can be produced with them.”
Resource upgrade and Traxys deal
Earlier this month, European Lithium upgraded the Wolfsberg Lithium Project’s total resources by 11% to 12.9 million tonnes at 1% lithium oxide after finalising the resource estimation based on the infill drilling program in Zone 1.
An increase in resources means an extension of mine life from what was previously announced in the pre-feasibility study (PFS).
The company also marked another key milestone this week by agreeing to pursue a cooperation and offtake partnership with Traxys Europe S.A.
Traxys aims to support the development and commercialisation of Wolfsberg by retaining exclusivity until the end of the first quarter of 2022 to finalise an offtake deal.
It will leverage its banking relationships to support European Lithium to structure appropriate project financing and provide working capital to the Wolfsberg Lithium Project.
Traxys will also be considering a direct investment in the company.
Massive demand for raw materials
Federation of Austrian Industries president Georg Knill explained that massive demand for raw materials runs in parallel with strong economic growth.
“Globally we are growing by 6% – the last time we saw this growth is in 1973.
“The raw material producer China consumes a large part of its resources itself.
“The price of manganese rose by 34% from October to November, chromium by 50%, the price of lithium, which is needed for car batteries, has almost doubled since the middle of the year, the price of copper had increased by 19%.
“The higher price level also means that the mining of some raw materials in Europe, which was previously unprofitable, is now making economic sense.”
The EU Commission is pursuing the approach of strategic autonomy, said Knill.
“This should not be confused with self-sufficiency, because Europe will never be able to mine all the raw materials it needs itself, rather it is a matter of guaranteeing availability in Europe through partnerships.
“However, Austria has the largest tungsten deposit in Europe in Mittersill (Salzburg).
“As far as the planned lithium mining in Carinthia is concerned, the Mining Ministry assumes that a mining plan will be submitted next year.”
Lithium mining will have to increase tenfold
For the double transformation – digitisation and greening – massive investments are necessary, said the federation president.
The annual capacity of lithium mining will have to be increased tenfold to achieve the European targets by 2050.
“In the case of cobalt, the mining capacity has to be increased sixfold, in the case of graphite it has to be quadrupled.
“By 2050 we will also have to mine as much copper as has been mined globally in the last 5,000 years since the Copper Age,” said Knill, referring to World Bank calculations.
“The transformation brings you into new dependencies.”
Dependence on developing countries
Köstinger said that Austria should also rely on cooperation with producing countries.
The minister referred to a study by the University of Leoben in Austria, according to which 60% of global mining production takes place in developing countries.
“In the past two decades, mining activities in Europe have declined by 28%, while they have increased in China by 109%, in Africa by 30%, in the USA by 23% and in Australia by 144%.”
“We are not interested in dismantling everything in Austria,” added Köstinger.
“Politicians should also act as a door opener.”
Raw materials mining deal in the Balkans
The keyword for the 2020s is definitely transformation. All of the world’s regions have started to experience the seriousness of the climate crisis, and there’s no doubt that the economy, trade and societies need to become more resilient and less exploitative. The steps needed for this transformation have been set forth in the 2030 UN Sustainable Development Goals (SDGs). Governments are called on to improve economic productivity through sustainable practices, such as diversification and environmentally-sound technological upgrades, while seeking to decouple economic growth from environmental degradation; protect natural resources through improved management and use, including in companies; protect human health from pollutants and hazardous contaminants; and halt habitat and biodiversity loss and species’ extinction.
Europe wants to be the first continent to become climate neutral by 20501 and the leader in ensuring that all of the world’s ecosystems are restored, resilient and adequately protected by 20502. The European Union has declared its ambition to halt, and as much as possible reverse, the pressure humans put on the planet’s resources, ecosystems, climate and biodiversity. However, as the green agenda to reach these ambitions becomes more defined, it reveals that despite the long-term goal of reducing the demand for resources and fossil fuel consumption, Europe plans to continue its exploitative model of mining raw materials in the EU and around the world. The European Commission introduced the European Green Deal in December 2019 as a way to turn the urgent climate challenge into a unique opportunity for the transformation of the economic and societal system. The sourcing and production of raw materials were included in the Green Deal:
Access to resources is also a strategic security question for Europe’s ambition to deliver the Green Deal. Ensuring the supply of sustainable raw materials, in particular of critical raw materials necessary for clean technologies, digital, space and defence applications, by diversifying supply from both primary and secondary sources, is therefore one of the pre-requisites to make this transition happen.
Although this excerpt from the Commission’s communication on the Green Deal emphasises sustainability, it also introduces a key tension between that sustainability and security. Which will be prioritised? Will Europe try to solve the climate crisis by exacerbating the biodiversity, resource and poverty crises, or will the new EU policies stemming from the Green Deal manage to propose a holistic approach to all of these? Who will make use of this transition opportunity, and will it benefit only European citizens, or will other societies also benefit?
EU decision makers have advanced the furthest on reaching their climate neutrality target, and swiftly-implemented changes to infrastructure such as smart grids, energy storage systems and e-mobility have already increased the demand for raw materials. The Commission has given itself until 2025 to make a plan to clean up the industry’s supply chains. We welcome the increasing confidence in the feasibility of Europe’s decarbonisation, but we are greatly concerned about the lack of safeguards which would make this decarbonisation truly sustainable. Very little has been done so far to ensure that, to paraphrase the narrative of the Commission, no one will be left behind.
CEE Bankwatch Network, along with its members and partners, has been monitoring investments in raw materials mining backed by public funds in the EU and around the world for years. This work has shown that despite the EU’s stated ambitions when it comes to changing the energy paradigm or reversing biodiversity loss, there’s still a lot to be done to stop harmful practices in the mining sector, especially in cases where such practices are supported by the EU taxpayers.
The European Commission’s agenda is sound, but to be effective it has to counterbalance the procurement of the raw materials indispensable for the green and digital revolution with safeguards for the people affected by raw materials mining and for the nature destroyed by the overwhelming pressure for cheap and fast exploitation. Therefore, the Commission must be even more ambitious and incorporate policies that ensure the use of less-exploitative and toxic-safe technologies; the restoration of the old mining sites; strict environmental, social and human rights due diligence for mining projects; and finally, the right for the communities affected by the mines and surrounding facilities to have a say. The EU cannot attempt to overcome the climate crisis at the expense of local communities, workers’ rights and biodiversity, especially in the face of the COVID-19-induced economic and social crisis. It would be a raw deal, one experienced too often in the past, which should finally be left far behind.
The European Green Deal: impossible without raw materials
Despite both the scientific consensus regarding the massive destruction to the planet caused by the current economic paradigm and the high-level attempts to address its effects, be it the SDGs agenda, the Paris Agreement or ambitions to reverse biodiversity loss, the global consumption of biomass, fossil fuels, metals and minerals is expected to double in the next 40 years4 and annual waste generation is projected to increase 70% by 20505. In 2019, the European Commission launched several strategic documents to align the European economy with the Paris climate agreement targets and the SDGs. One of them was the European Green Deal – the EU’s growth strategy – which is aimed at positioning Europe to become the world’s first climate-neutral continent by 2050 and to decouple economic growth from resource use. To ensure that the economy will actually give back to nature more than it takes away, the Green Deal requires a new policy framework.
The EU Industrial Strategy, presented in March 2020, identifies the main tool of the green agenda: digitalisation. Digital technologies such as artificial intelligence, 5G, cloud and edge computing and the Internet of things are indispensable for climate solutions – be it electric transport, smart houses or remote working. Digitalisation sounds like a clean, almost utopic, solution, but in reality, making the EU digital requires the rather dirty mining of gold, copper, lithium and other metals, as well as smelters for those metals and a complex, non-transparent information and communication technology (ICT) supply chain.
The EU’s new Circular Economy Action Plan aims at accelerating the transformational change required by the European Green Deal. The Plan lists key products’ supply chains, among them the supply chain for electronics and ICT. This industry is tackled in the Plan as waste-producing only; however, it has a very non-transparent and heavily impactful supply chain, starting with the raw material mines, and stretching to smelters and complicated manufacturing networks. With an expected annual growth of 9.6% by 2022, the ICT sector is one of the fastest-growing industries. Currently, the sourcing of the raw materials used in ICT is almost impossible to trace, and it is increasingly obvious that raw materials mining is associated with human rights abuses, socio-ecological conflicts and violations of labour rights and standards.
The untraceable ICT supply chain
The official supply chain data published by global brands such as Apple, Dell, HP and Samsung shows the full lists of smelters and refineries used by these companies. But that’s where the very limited transparency of the big brands’ supply chains ends. They claim that they are not able to determine the sources of the raw materials refined in the smelters which are part of their supply chain. In its Conflict Minerals Report, Apple claims:
Apple conducts robust due diligence on the source and chain of custody of 3TG in its global supply chain but does not directly purchase or procure raw minerals from mine sites… The challenges of tracking specific mineral quantities through the supply chain continue to impede the traceability of any specific mineral shipment through the entire product manufacturing process.
Similarly, Dell in its Responsible Minerals Sourcing Report says: Dell supports, respects and upholds the internationally-recognised human rights of all people, including all internal team members and those in our supply chain. Ensuring the responsible sourcing of minerals is also part of this global approach. Although we do not use minerals in their raw form or purchase them directly from mining companies or smelters, we engage our supply chain to perform due diligence.
Among the smelters mentioned in the official lists published by the world’s leading ICT brands, there were four situated in Kazakhstan. CEE Bankwatch Network, in cooperation with a Kazakh journalist, attempted to trace the connections between the global brands and mines in Kazakhstan providing the raw materials for ICT. In the course of the investigation, connections between three mines and the smelters used by global ICT brands were uncovered and mapped, but it was ultimately not possible to provide proof of these connections. This exercise confirmed an open secret: this part of the supply chain is the blind spot of the whole industry. It is of utmost importance to make the ICT supply chain fully transparent, in part to ensure that the electronic products, one of the foundations of the new EU green and digital approach, are not connected with conflicts, human rights abuses or environmental destruction.
Global brands underline their financial support for different kinds of initiatives aimed at better understanding the impact of the industry on the lives of people working and living in mining communities. They also support whistle-blower initiatives to empower independent, local voices to raise issues and report incidents at the mine-site level. But until the ICT supply chain is fully traceable, this support will only be a corporate social responsibility exercise without the companies taking real responsibility for the impact of their business.
The Critical Raw Materials Resilience of the EU: at odds with sustainability
Raw materials mining is associated with risks concerning human rights abuses, socio-ecological conflicts and violations of labour conditions. Many rare metals are located in countries with risky political contexts: tin, tungsten, tantalum and gold are often referred to as conflict minerals, the extraction of which has been fuelling war in the Democratic Republic of the Congo for several years. In September 2020, the Commission launched a communication10 regarding the Critical Raw Materials Resilience of the EU. It indicates that ‘resilience’ for the EU simply means securing raw materials’ supply by negotiating trade agreements or seeking to eliminate trade distortions. EU demand for these minerals is projected to increase, but concrete measures to address the human rights and environmental concerns about mining and the mineral supply chain have not been addressed. A foresight Study on Critical Raw Materials for Strategic Technologies and Sectors in the EU published together with the communication gives the critical raw materials outlook for 2030 and 2050 for strategic technologies and sectors.
For electric vehicle batteries and energy storage, the EU would need up to 18 times more lithium and 5 times more cobalt in 2030, and almost 60 times more lithium and 15 times more cobalt in 2050, compared to the current supply to the whole EU economy. If not addressed, this increase in demand may lead to supply issues.
Mines that are currently under exploration or already operating show the wide range of impacts mining can have on the environment and people, which cannot be neglected in the race to secure the supply of minerals. In response to the strategic directions proposed by the Commission at the Raw Materials Initiative, namely to ‘accelerate and facilitate procedures’ for the approval of mining projects in the EU and its neighbours, such as Norway, Ukraine and the Western Balkans, as well as in partnerships with countries in Africa and Latin America, it is crucial to underline why rapid approval for such projects is a dangerous idea.
Case 1: Strategic copper mine in Serbia violates property rights and environmental standards
Zijin Mining Group’s takeover of the Bor Mining Complex shows the dangers that pursuing mining projects in countries with weak rule of law poses for individuals’ right to property and a clean, safe and healthy environment.
Located in eastern Serbia, Bor is home to one of the largest copper reserves in the country and in the world. The Chinese company Zijin Mining Group, as a strategic partner of the Serbian government, planned to produce 55,000 tonnes of copper concentrate and 90,000 of copper cathode in 2020. One of the most contentious mines is Veliki Krivelj, an existing open cast mine located in a village of the same name, about 10 kilometres from Bor.
In the last decade, Serbian mining and spatial planning legislation has increasingly enabled the Government of Serbia to issue some of the necessary permits for ‘preparatory works for opening of exploitation of mines’ without requiring an environmental impact assessment (EIA) or the consent of local communities, both of which are required before issuing exploitation permits. This has led to the direct and systemic violation of the rights of the population to say no to any mining operation. As such, a temporary permit allows for serious exploitation works, and it has become very hard to stop the commissioning of the mine.
At the Cerovo mine, near Veliki Krivelj, a Chinese company forcibly took the property of five inhabitants and opened the mine without a permit, a developed spatial plan or an EIA for that plan. The expansion of Veliki Krivelj, even with its enormous future potential, is one of the most problematic mine expansions in Serbia. One of the most important questions is how to protect the Timok River, where inflows from the Kriveljska and Borska Rivers carry pollution from the mines, smelters, flotations and other polluting sources in the mining complex. Kriveljska and Borska are among the most polluted rivers in Europe. Serbian legislation requires that a special spatial plan for specific aims is developed prior to the expansion of any mine. Development of this plan for the mining complex in Bor and Majdanpek started in 2020. But in 2019 and 2020, Zijin had already started attempts to obtain the properties necessary for the extension of Veliki Krivelj. It has thus far only proposed buying those properties that are a few meters from the mine. However, if the mine is expanded as proposed, more than 300 households will be located in the heart of the mining operations – surrounded by constant explosions, vibrations from mine equipment, large trucks and dust from mining and transport. Houses and other structures in the village have already been damaged by mining operations in 2018 and 2019.
In 2020, villagers from Veliki Krivelj, Ostrelj and Slatina held several meetings with the representatives of Zijin, the Government of Serbia and the Serbian President’s office. They repeatedly asked the same questions: who will protect them from the negative effects of mining, who will protect their properties, and why doesn’t Zijin pay the regular market price for the properties?
Residents of the village of Krivelj also held a protest where they demanded the relocation of all 400 households of their village. Speakers stated that it is already impossible to live in villages around the mines, and they cannot imagine what it will be like when new mines will open. A representative of the communal council of Krivelj, Mr Dalibor Stanković, stated:
‘Many houses have cracks on the walls and foundations, and some roofs collapsed, dust covers the village on three sides, while the river is polluted with acidic mine waters.’
In 2020, citizens of Bor also protested against excessive pollution, which they claim has intensified since Zijin became the mine’s owner. In fall 2020, Bor’s municipal administration filed a criminal complaint against the managers of the Zijin for causing excessive sulfur dioxide pollution that is harmful to the health of the population. The Environmental Protection Agency’s (SEPA) measuring stations had recorded excessive sulfur dioxide pollution in Bor for three consecutive days, and there have been similar levels of pollution almost every day for nearly two years since Serbia sold Bor Smelting Company to Zijin. The level of sulphur dioxide in the air allowed by law is 350 micrograms per cubic metre, but on some days, average values in Bor reached 1,969 micrograms several times during the day. The conclusion was that the air is ‘very polluted’ and residents were advised against leaving their homes. The air is also ‘heavily polluted’ by PM10 particles.
In September 2020, Zijin’s smelter temporarily halted operations due to the excessive air pollution. The results of a pilot study conducted by the SEPA about the impact of industrial pollution on the health of the population in Bor, published by the Institute of Public Health of Serbia Dr Milan Jovanović Batut, show that the city’s residents are at a significantly greater risk of disease and death from cancer, and there is a higher risk of premature death from other diseases. Arsenic pollution in Bor increased by 323 times in August 2020. In October 2020, the Commercial Court in Zaječar ruled that the company Zijin Bor and one of its managers are responsible for the pollution in Bor in November 2019 and January 2020. The verdict is not final, because both parties have filed appeals – the last word will be given by the Commercial Court of Appeals in Belgrade.
Despite this ruling, the fine that Zijin will need to pay (about EUR 4 000) will be so small that it is expected that the company will continue to pollute. Thus, in Serbia, private and public mining companies are able to open mines without resolutions on property rights disputes, EIAs for mines or exploitation permits. Such cases have occurred and are ongoing not only at Bor’s copper mines, but also at the Kolubara and Kostolac coal mines and Vojvodina’s oil extraction fields.
Case 2 Labour rights abuses in Bulgaria’s mining and metallurgy sector
Workers identified several serious violations of labour rights guarantees, demonstrating a lack of implementation and oversight of labour laws in the EU’s own mining sector. Bulgaria is the third largest copper and fourth largest gold producer in Europe. According to the official data, about 25,000 workers are employed in the mining sector (which includes coal, oil and gas; non-ferrous metals; and construction materials), representing some 5% of Bulgaria’s GDP.
However, the testimonies of people employed in the mining and metallurgy companies in the Bulgarian Panagyurishte region reveal the problems with labour conditions in the gold and copper supply chains. A survey conducted in November 2019 included 61 interviews conducted with both workers and local residents. The interviewed workers were employed by Asarel Medet AD, which operates an open-pit copper mine and a gold mine; Aurubis Bulgaria AD, which operates smelters that produce copper, gold, other rare metals and sulphuric acid; and Chelopech Mining EAD, which operates an underground copper mine and a gold mine. Chelopech received support from the European Bank for Reconstruction and Development in 2005 and 2008. Core issues identified by the research include the lack of equal treatment of workers employed directly and indirectly, lack of independent trade unions, precarious and low-pay working conditions, intimidation and silencing of critics, and the negative health impact on workers and the local communities.
Case 3 Transfer of toxic mining waste materials from Bulgaria to Namibia
The disposal plan for arsenic waste from the Chelopech mine violates the international convention on waste disposal, showing how the procurement of raw materials at the expense of human health and environmental protection can have severe consequences. Canadian company Dundee Precious Metals has used continuous loans from the European Bank for Reconstruction and Development (EBRD) to improve the profitability and performance of its copper and gold mining operations in Bulgaria. Arsenic content in the precious metal concentrates is one of the main environmental and health issues connected to the operations. The company failed to ensure the extraction, stabilisation and safe deposit of the arsenic in Bulgaria and instead the concentrate with arsenic is exported to Namibia. The primary saleable product of Chelopech is a gold-copper concentrate containing, on average, 5.5% arsenic.
After the tailing dam of the nearby smelter collapsed in 1988 and because of the relatively high arsenic content of the concentrates, in 1990 the Bulgarian government issued a decree that Chelopech concentrate could no longer be treated in Bulgaria, unless arsenic capturing and treatment facilities were installed at the smelter. For this reason, the arsenic is transported by sea to the Tsumeb smelter in Namibia. The annual processed ore in the Chelopech gold mine has increased from around 0.5 million tons in 2004 to above 2 million tons in 2019.
By the final year of the mine, which is projected to be 2025, around 100,000 tons of arsenic will be extracted, processed, stored and/or released in some form elsewhere around the world. Dundee applied for the approval of cyanide leaching technology, claiming that this would also ensure the capture and stabilisation of the arsenic residue, but with no success. In addition, the project’s EIA and permit, which were respectively approved and issued by the relevant ministry, were ultimately rejected by the Bulgarian Administrative Court in 2010 due to significant deficiencies. Under the threat of not being able to process the concentrate, Dundee acquired the Tsumeb smelter in 2010.
The Tsumeb smelter in Namibia was constructed in the early 1960’s and is one of the few smelters in the world equipped to treat complex concentrates as its primary feed. Behind the neutral term ‘complex concentrate’ lies the fact that complex concentrates have high levels of one or more deleterious elements, such as arsenic, uranium, cadmium or mercury. Smelters that will currently accept complex concentrates include Tsumeb in Namibia, Altonorte in Chile, Guixi in China and Horne in Canada. For complex concentrates that contain more than one per cent arsenic, the DPM smelter in Namibia at Tsumeb is now the only smelting option.
RESEERVE’s West Balkan Mineral Register launched
The RESEERVE project represents the first step in establishing fruitful cooperation between countries where there are not yet EIT RawMaterials partners. RESEERVE project has launched the West Balkan Mineral Register to provide a comprehensive and useful register of primary and secondary raw materials. The West Balkan Mineral Register focuses on metals and industrial primary minerals, mine and metallurgical waste sites in the following ESEE countries: Albania, Bosnia and Herzegovina, Croatia, North Macedonia, Montenegro and Serbia. The project aims to increase the capacity of mineral management in the West Balkan countries and ensure a sufficient flow of mineral information for European industry to expand their business and investment in the West Balkan region. The geographical coverage of European Minerals Inventory is being extended with data from the West Balkan countries belonging to the Regional Innovation Scheme (RIS) region. In line with EU mineral needs and strategic trends, West Balkan Mineral Register provides publicly available data for interested stakeholders: potential investors, mineral-related companies, research and educational institutions. The project will reduce exploration costs and investment risks, thus positively contributing to boost economic development and employment in the ESEE region. The project is also in line with the EU Green Deal aimed at transforming the EU into a fair and prosperous society, with a modern, resource-efficient and competitive economy.
West Balkan Mineral Register of Primary Raw Materials
The West Balkan Mineral Register of Primary Raw Materials relates to mineral deposits and mineral endowment in the EU neighbouring countries in West Balkan. Mineral Register facilitates the establishment of West Balkan mineral community and accelerates mineral exploration. These actions will enable the integration of West Balkan into the pan‐European mineral market. According to the EU mineral demands and its strategic tendencies, metals, industrial minerals and rocks are integrated into a common dataset, focusing on critical raw materials (CRMs). Primary raw materials data are addressed to active, abandoned and closed mines that might be interesting for further exploration/exploitation and perspective greenfields where any relevant data exit. The 473 locations of primary mineral resources are represented in the register on the European Geological Data Infrastructure (EGDI) map.
West Balkan Mineral Register of Secondary Raw Materials
The creation of West Balkan Mineral Register of Secondary Raw Materials acquire information about the mine and metallurgic waste sites in involved ESEE countries and create a common dataset for this part of Europe to improve their accessibility. Created dataset contains the following information on secondary mineral deposits: basic geographical information of each site, type of waste landfill, geometry and primary extracted elements. Evaluation and classification of potential secondary raw materials, identification of extraction possibilities and environmental impact assessment has been performed on waste deposits. Such a systematic approach presents a good starting point for mineral extractive industry, to enter into new markets. Secondary raw materials data acquire information about the mine and metallurgic waste sites in involved ESEE countries and create a common dataset for this part of Europe to improve their accessibility. The 1461 locations of secondary raw materials in the West Balkan countries are represented in the register and on the Google Earth viewer.
Norwegian phosphate, vanadium and titanium raw materials discovery
A lucrative phosphate deposit in Norway caught the attention of local scientists. What sounded rather unspectacular at first has turned into one of Europe’s most fascinating discoveries. Norway does not belong to the EU. Its huge deposit has certainly piqued the interest of the 27-member bloc and China. Michael Wurmser was a banker, investor and strategic consultant before he met new business partners from Norway. They offered the Swiss national five licenses for the phosphate deposit. Wurmser’s company claims to have discovered the biggest deposit of its kind globally, which could produce 70 billion to 80 billion tons of ore-containing material.
After backing from Swiss and German investors, Wurmser and his partners founded Norge Mining in the UK in 2018. They started taking soil samples in the Dalane region in sparsely populated south western Norway. Besides phosphates, two other important minerals were found: vanadium and titanium. Vanadium is tipped to become the most important raw material of the future. About a tenth of all globally mined vanadium is currently used to produce high-performance batteries that store renewable energy. Vanadium batteries are far superior to conventional lithium-ion batteries. They can be charged faster and survive 10 times more recharging/discharging cycles without losing performance. Besides that, recycling them is easier. Titanium is important for the steel industry, while phosphates are required for the production of fertilizers.
Electromagnetic field tests, carried out from a helicopter in 2019, produced a 3D visualization of the whole ore deposit. At first, Norge Mining only expected the raw materials to reach a depth of 300-400 meters (984-1,312 feet). Further test drilling and lab studies helped them calculate that the mineralization of the ore deposit reaches at least 2,200 meters (7,217 feet) deep. The company now believes the depth could be up to 4,500 meters.
“At first, we didn’t expect the deposit to have such gigantic dimensions,” Wurmser told DW. Norge Mining says it has since secured six licenses for the development of an area four times the size of Paris, some 420 square kilometers (261 square miles). In 2012, the Geological Survey of Norway put the value of the deposit at some €30 billion ($36.4 billion). But that estimate assumed the ore deposit would have a depth of just 100 meters.
British consulting firm SRK calculated that the total ore body contains 70-80 billion tons of phosphate-containing material, which would make it the world’s largest phosphate deposit, ahead of Morocco’s 50 billion and China’s 30 billion tons. Added to this is some 3.5 billion tons of ore-containing rock material, which contains 2.45 million tons of vanadium. Norge Mining didn’t provide any details on the titanium deposit.
Critical raw materials for the EU
The Norwegian mega deposit has spurred the European Union’s interest, all the more since phosphate, vanadium and titanium are on the European Commission’s list of critical raw materials. The list contains 30 rare earths and other minerals which are classified as crucial for the bloc’s economic and climate protection policies but predominantly need to be imported. Often, importing these materials is risky or complicated. China, for instance, has reserved the right in its latest five-year plan to curtail exports of rare raw materials should they be needed for domestic production.
Over 60% of the EU’s phosphate, vanadium and titanium supplies come from China, along with 20% from Russia and the rest from Kazakhstan, Morocco and other African nations. By 2030, demand is likely to soar — up to 58% for vanadium alone, according to Berlin-based consortium EIT RawMaterials. Seeking to reduce the risk of supply bottlenecks, Brussels has created the European Raw Materials Alliance (ERMA). The initiative is backed by 160 companies, including Norge Mining, to make raw-material supply chains resilient.
But the company hasn’t specified just how much vanadium, titanium and phosphates it aims to supply to the bloc, arguing it’s too early to say. After all, it will take about five years to begin extraction. The EU doesn’t see an immediate bottleneck in the supply of critical raw minerals, but the Economic Council of Germany’s center-right Christian Democratic Union (CDU) party has called for the creation of reserves just in case.
Alternative to oil exports
The European Commission is in talks with Norwegian authorities about potential supplies. Oslo, with its dwindling oil reserves, is already readying itself for the post-fossil fuel era. Extracting and exporting rare earth minerals could become a new pillar of economic growth. Odd Stangeland, the mayor of Eigersund where the huge deposit is located, told DW the locals are happy about the discovery, especially as Norge has pledged to adhere to strict environmental protection standards. Such is the backing for rare earth minerals, a highway may be rerouted so as not to be in the way of future mines, despite costing €330 million. Wurmser thinks that is a relatively small sum, given the expected yields. He says the Dalane deposit could be a multigenerational project, lasting for more than a century.
Wurmser noted how rare earth minerals have become a political hot potato. As well as the EU, China’s state-run enterprises are taking a keen interest in its Norwegian project. “Every 10 days, there’s a call from China,” Wurmser told DW, sensing an unspoken wish to buy his firm, which he insisted is out of the question. “We only see them as potential recipients [of our minerals].”
In contrast, Norge sees the EU as a key partner, as it will help the bloc realize its ambition of becoming carbon-neutral by 2050. This goal cannot be achieved without green technologies and long-lasting batteries, produced with the help of rare raw minerals that are mined responsibly, he told DW.
Europe lagging behind securing supplies of the raw materials needed for batteries production
Investments in the EU battery sector reached €60 billion last year, while China invested only €17 billion, EU commissioner Maroš Šefčovič told EURACTIV in a recent interview. This year, Europe has so far invested €25 billion – again twice as much as China, he noted. Since the launch of the “European battery alliance” in 2017, the EU has made a leap forward in its quest to develop a full battery manufacturing value chain.
“In terms of investment levels in Europe, we probably have caught up,” says Andrew McDowell, the European Investment Bank’s vice-president responsible for economics and energy. According to him, there has been “a transformation in the level of ambition” in Europe since the battery alliance was launched in 2017.
“It’s not just about catching up anymore, it’s about Europe taking a leadership position in this industry,” McDowell told reporters during an online briefing in late August.
But the catch up is not over yet. Europe’s Achilles Heel is at the start of the value chain, where raw materials are mined and processed, according to Peter Carlsson, the CEO of Swedish battery maker Northvolt.
“We’re building plants but they need to be supported by raw materials, components and suppliers of equipment,” Carlsson told journalists at the August online briefing.
Northvolt is currently constructing Europe’s first battery gigafactory in northern Sweden, and a second site is planned in Germany following a deal signed with carmaker Volkswagen in July.
“Today, as we’re starting up the factory, we will still be dependent on a lot of suppliers from outside Europe,” Carlsson said, citing raw materials and components as part of a wider battery “ecosystem” that he says should be promoted in Europe.
“This is where we really need to continue strengthening the European ecosystem,” Carlsson said. “It’s going to require focus and investments.”
Developing home production
Raw materials like lithium and cobalt, which are currently imported into Europe, have come under close scrutiny as part of the EU’s push to secure raw materials for battery manufacturing. Demand for lithium is expected to increase 16-fold by the end of the decade and be 60 times larger by 2050, according to European Commission forecasts. Cobalt, another key ingredient for batteries, will also see a spike in demand, growing 500% by 2030 and 15 times by 2050. To address this weakness, the Commission launched an action plan on critical raw materials as well as an industry alliance last September, with the aim of strengthening the EU’s “strategic autonomy” on key raw materials. And the focus is not only on car batteries – sectors such as aerospace, construction, and low-carbon industries are also concerned because they are considered key for the green and digital transitions.
“Today we are acutely aware that this dependency is something we have to take extremely seriously, which is why we created this European Raw Materials Alliance,” Šefčovič said.
The good news is that Europe can quickly become independent on some of them. “For lithium needed for batteries and storage, we’re confident that we can be 80% self-sufficient by 2025,” Šefčovič said, citing mining projects currently under development across Europe and neighbouring countries. In April this year, a lithium mining project in the Czech Republic secured €29.1 million in funding and is expected to become the first EU producer of battery-grade lithium compounds. In July, global mining giant Rio Tinto announced a decision to invest nearly $200 million in a lithium-borate project in Serbia. For rare earths, which are used in magnets founds in wind turbines and electric motors, it will be a longer shot. The EU is currently 100% dependent on imports but the Commission hopes the first European mines could open as soon as 2030.
“We also have rare earth reserves in Europe, which until now, have not been fully explored,” Šefčovič said. “This is why countries like France, Germany, Portugal, Spain, Sweden, Greenland and Norway, are looking into it.”
To diversify supplies, Europe is also looking to the Western Balkans – notably, Serbia and Albania – as well as Ukraine, which “have very solid reserves of most of these critical raw materials,” Šefčovič added.
But developing mining at home and diversifying supplies is only part of the answer. The European Commission’s strategy also relies on recycling and green standards for batteries, which could help extract huge amounts of untapped raw materials contained in electric waste. Every year, the EU generates some 9.9 million tonnes of waste electrical and electronic equipment but only 30% of it is collected and recycled, the Commission says. Worse, some valuable raw materials are not recovered because they are too difficult or costly to extract.
“The recovery of critical raw materials from this e-waste stands below 1% because we do not have the necessary technology and industrial processes in place,” Šefčovič said. “If you just collect all the old cell phones we have in our drawers, we can immediately build four million car batteries just from the cobalt,” the commissioner remarked, highlighting the vast untapped potential of so-called “urban mining”.
“This is why we’re funding research and innovation in order to develop these processes,” Šefčovič added, saying the EU is already spending “almost €1 billion” on raw material projects as part of the Horizon 2020 research and innovation programme.
Finally, the European Commission is planning stricter green standards for batteries as part of a new battery regulation, expected to be tabled on 9 December, spelling out new standards for batteries, with the aim of reducing the overall carbon and material footprint of batteries manufactured or imported into Europe. This will include “something like battery passports that will ensure easy access to information about key parameters of batteries and their origin,” including the raw materials that went into the manufacturing process, Šefčovič said.
“We also want to make sure that we will be working with raw materials that are traceable and respect ecological, labour and other standards. This is important for European consumers.”
In total, fourteen new measures are expected to form the basis of the new EU batteries regulation, according to Recharge, a trade association representing manufacturers of advanced rechargeable and lithium batteries.
“To put it simply, we want to put the regulation in a form that would provide for mandatory requirements for the greenest, safest and most sustainable batteries on this planet,” Šefčovič told EURACTIV.
The recycling of key raw materials used in the manufacturing of batteries is one of the flagship measures expected in the EU’s updated battery regulation, Recharge said in a briefing paper outlining the main elements of the future EU law. As part of the new rules, the Commission is looking at introducing specific recovery rates for selected materials used in batteries, such as lithium, cobalt and nickel. It also plans to improve the collection rate of used batteries and pave the way for the introduction of mandatory levels of recycled content in new batteries as from 2030.
“Recycling is one of the most effective ways towards an efficient use of our resources in the battery industry. Especially the recovery of high-impact materials brings a true improvement to the environmental and social profile of batteries,” Recharge says. Another flagship measure envisaged by the Commission is the introduction of a due diligence obligation on battery manufacturers, forcing them to trace the materials based on the model of the EU’s Conflict Minerals Regulation, which enters into force in January.
Further measures include the promotion of an aftermarket for used EV batteries and an extended producer responsibility scheme obliging producers of batteries to finance collection, take-back and recycling activities. ECOS, a green NGO, says green standards for batteries are essential to ensure the transition to electro-mobility is done in a truly eco-friendly way.
“We need performant and durable EV batteries, which are easy to repair, reuse and recycle,” said Rita Tedesco from ECOS. “Parameters such as the state of health of the batteries and tests to evaluate them need to be comparable throughout different brands. A minimum set of design standards – such as lifting parts – would make the disassembly process for recycling cheaper, simpler and less time-consuming”.