New legislation aimed at shoring up EU supplies of minerals and Critical Raw Materials (CRMs) has been announced by European Commission President Ursula von der Leyen. The so-called European Critical Raw Materials Act aims to help the EU find more reliable sources of CRMs and rare earths – and importantly, reduce dependence on Russia and China.
The new oil and gas
China currently produces more than 90% of Europe’s rare earths and it has 60-70% of the lithium market. These types of materials could soon become more important than oil and gas, as the world seeks to decarbonise through green technologies.
“Our demand for rare earths alone will increase fivefold by 2030,” von der Leyen said in her State of the Union address. “A single country currently dominates almost the entire market. We must avoid becoming dependent again, as with oil and gas.”
Green and digital future
The COVID-19 pandemic and war in Ukraine have highlighted how vulnerable European supply chains are. Without secure and sustainable access to the necessary CRMs, Europe’s goal to become the first climate neutral continent will be at risk. What’s more, it will struggle to lead the digital decade and future defence capabilities could be in jeopardy.
Bolstering CRM supply and creating more transparency around it has therefore been on the Commission’s agenda for a while. “We will identify strategic projects all along the supply chain, from extraction to refining, from processing to recycling,” said Ursula von der Leyen. “And we will build up strategic reserves where supply is at risk.”
Strong, steady supply chains
The EU is also keen to diversify its trade of raw materials with more stable countries to prevent such critical provision being used as a geopolitical tool. This happened in 2010 when China slashed rare earth exports worldwide and entirely cut Japan off in a dispute over a Chinese fishing trawler.
In light of this, the Commission will also be submitting CRM trade agreements with Chile, Mexico and New Zealand for ratification, while negotiations with partners like Australia and India continue.
Norway’s world-class minerals
Norway is currently sitting on large, untapped mineral supplies and Norge Mining’s site in the southwest of the country is a world-class deposit of phosphate, vanadium, and titanium – all of which are EU Critical Raw Materials.
We welcome the new legislation as it will help progress our work to extract these metals that are of strategic importance to Europe for the green energy transition and in food production.
Vanadium alone plays a key role in efficient power storage for renewable energy, like hydro, wind and solar. Vanadium-based batteries have a decades-long life cycle and can be re-charged thousands of times without degrading.
Track record
While the Commission has previously announced it’s working on CRM supply chain legislation, this is the first time the main pillars of the strategy have been set out.
Speaking of the new Act, the European Commission President said: “We know this approach can work. Five years ago, Europe launched the Battery Alliance. And soon, two thirds of the batteries we need will be produced in Europe.”
Against this evolving backdrop, we have recently published our Responsible Business Report for 2021. Read here for more information.
