The longer the supply chain for critical raw materials the greater the risk and vulnerability to Europe’s car manufacturers.
The recently published draft of the European Union’s Critical Raw Materials Act will provide a new regulatory framework to encourage the exploration and extraction of Europe’s own resources.
It’s a critical issue for automakers and represents a generational shift in attitudes from European policymakers. By encouraging the onshoring of essential minerals, such as lithium and cobalt, it will help support European industrial competitiveness and its ability to innovate in an increasingly volatile global trading environment.
New technology is transforming the automotive industry. From creating new low-carbon products; to the creation of a domestic European battery industry; to new ways of making cars smarter and more efficient — all are dependent upon securing a sufficient and affordable supply of critical minerals.
Without critical raw materials (CRM) there can be no green and digital transitions. The longer the supply chain the greater the risk and vulnerability to Europe’s car manufacturers.
A recent World Bank report highlighted that the world needs an anticipated 500 percent more critical raw materials to enable successful green and digital transitions by 2050, equivalent to 3 billion metric tons.
Everyone will want their share and the challenge is that existing sources and current supply won’t be sufficient. To meet future demand Europe will need more imports, more recycling and must explore and extract more of its own resources.
No net neutrality without mining
Europe has outsourced its supply over many decades. It is now almost entirely dependent upon imports from Australia or South America. These materials are then transported to a port to be shipped to Asia, where they are processed, before being shipped again to Europe.
That process is at odds with Europe’s strategic ambition to develop a sustainable domestic battery industry. Everyone needs to be producing more, closer to home.
New technology a key driver
Supply is one issue surrounding the critical raw materials debate. The other is the essential role technology will play and how technology and mining will need to work seamlessly as we adapt and nurture new ways of producing end-products.
From hubcaps to car-body parts, consumers will increasingly want to know where the raw materials have been sourced. Technology will help us do that. Innovation is enabling us to do things we couldn’t do only a few years ago, allowing us to create new products, such as zero-carbon aluminum. Technology will help us do that too.
Technology and sustainable mining
The mining industry is at a critical juncture. If it wants to build more partnerships with the automotive sector, the mining industry must learn from past mistakes to help deliver a more sustainable future and become a partner of choice.
More sustainable ways of mining are now possible, and technology plays a critical role here too, from the move to pure electric fleets on site to new ways of mining underground.
It’s all interconnected as the industry must show how it can minimize its environmental and societal impacts to succeed and deliver benefits to local communities.
Making partnerships work
If Europe wants EVs, it needs to think more holistically.
If Europe wants to be ahead in innovation and global technology, it needs to be able to compete effectively.
If Europe wants to meet its climate change ambitions, it must source more locally. This is business critical and this goes beyond just the mining sector; the automotive sector will not be able to achieve its objectives without the necessary resources.
Source: Automotive News