MINEX Forum

Tag: Critical raw materials

  • Kazakhstan Produces Over Half of Raw Materials Critical for EU Economy

    Kazakhstan Produces Over Half of Raw Materials Critical for EU Economy

    Kazakhstan produces and processes 19 types of essential raw materials included in the list of critical raw materials for the European Union (EU), reported the Ministry of Industry and Construction on Feb. 6. The list updated by the EU in 2023 includes 34 critical raw materials.

    The raw materials from Kazakhstan are also exported to China, the EU, South Korea, the United Kingdom, the United States and Russia.

    “Kazakhstan’s producers supply the European market with metal and chemical products such as beryllium, tantalum, titanium, ammonium metavanadate, and phosphorus,” said the ministry in a statement.

    Kazakhstan is also among the world’s top 10 copper-producing countries. Kazakhstan boasts opportunities to establish a cluster for battery material production, such as nickel, cobalt, manganese, and lithium.

    Rare metals and rare earth metals are considered critical types of raw materials in demand by leading sectors of the global economy, necessary for the transition to green energy, the development of digital technologies, defense, aerospace, medical, and other high-tech areas.

    “One of the main problems in the rare metals mining industry is the dependence on imported raw materials. Additionally, the development of the production of essential raw materials is hindered by the wear and tear of technologies and equipment at enterprises,” said the ministry.

    These issues are outlined in the comprehensive plan for the development of the rare earth metals industry for 2024-2028, which was approved by the government on Dec. 28.

    According to the document, the main problems of the domestic rare metals and rare earth metals industry are low level of geological exploration, low level of assessment and commercial exploitation of technogenic mineral formations, wear and tear of the main assets of enterprises, and underdevelopment of the regulatory framework for the industry.

    The ministry noted it is working on the tasks for the next five years. Overall, 15 rare earth deposits registered in the state are spread across three regions of Kazakhstan: Turkistan, Kostanai, and Mangystau. Data from the National Geological Service also indicates Kazakhstan possesses a raw material base of rare metals, including tungsten with 2.2 million tons of reserves, molybdenum with one million tons, lithium with 75,600 tons, tantalum with 4,600 tons, niobium with 28,100 tons, beryllium with 58,000 tons, among others.

    Kazakhstan’s Minister of Industry and Construction Kanat Sharlapaev headed the Kazakh delegation at the Raw Materials Week in Brussels in November. Speaking at a panel session in Brussels, Sharlapaev said critical materials represent a blueprint for a new chapter in the Kazakhstan-EU cooperation.

    “Our country is not just rich in terms of the mineral base. It has been a reliable partner for the EU, particularly contributing to its energy security through oil supplies and to the nuclear energy sector through uranium supplies. Now, Kazakhstan is ready and committed to integrate itself with the value chain of critical materials, which was aptly named critical for our green energy transition,” he said back then.

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    Photo credit: strategy2050.kz.

  • Europe is ‘miles behind’ in race for raw materials used in electric car batteries

    Europe is ‘miles behind’ in race for raw materials used in electric car batteries

    European carmakers have secured less than a sixth of the key raw materials they will need by 2030 to make electric vehicle batteries, according to analysis that highlights the expected scramble for green-tech resources.

    Carmakers have secured contracts for 16% of the lithium, cobalt and nickel required to hit their 2030 electric car sales targets, according to public disclosures analysed by Transport & Environment (T&E), a Brussels-based campaign group.

    The world’s two biggest electric carmakers, Tesla in the US and China’s BYD, were significantly further ahead of many of their European rivals in securing access to key raw materials, the researchers found.

    Batteries used in devices ranging from mobile phones to cars are made of precisely controlled combinations of metals. There is a global race to find enough lithium, the lightest metal, but cobalt and nickel are also important in many batteries.

    The analysis suggested carmakers had disclosed agreements that would cover only 14% of the lithium, 17% of the nickel and 10% of the cobalt needed to meet their targets for 2030. The EU and UK will ban the sale of new fossil fuel cars in 2035.

    Julia Poliscanova, the senior director for vehicles and emobility at T&E, said: “There is a clear disconnect between carmakers’ electric vehicle [EV] goals and their critical mineral strategies. Tesla and BYD are way ahead of most European players, who are only waking up to the challenge of securing battery metals now.”

    T&E said Mercedes-Benz, BMW and Hyundai/Kia were the carmakers with large European operations that were lagging furthest behind rivals. Ford, Volkswagen and Stellantis have disclosed plans for battery mineral supply that rival Tesla and BYD.

    Some of the carmakers may have secret deals with mining or refining companies to supply enough minerals, while some are looking at ways of reducing or eliminating the use of expensive cobalt and nickel. Nevertheless, the scale of the undersupply detailed in publicly disclosed contracts suggested carmakers would have to battle to hit their electric targets.

    The analysis tallies with forecasts from the data company Benchmark Mineral Intelligence that demand for some key materials will significantly outstrip supply in the coming decade.

    Benchmark predicts that lithium demand will quadruple by 2030 as China, Europe and then the US move rapidly away from petrol and diesel. However, its forecasts suggest there will be a lithium shortfall of 390,000 tonnes in 2030, compared with global production of 2.7m tonnes. It also predicts shortfalls of cobalt and nickel – part of what it describes as a “great raw materials disconnect” that could limit the pace of the transition away from petrol and diesel cars.

    Caspar Rawles, Benchmark’s chief data officer, said: “In the medium and even the long term, lithium is probably going to be the limiting factor on the rate that the battery industry can scale.”

    Big mining projects usuallytook at least five years to start producing material at scale, and as long as seven years if fundraising was required, Rawles said. That would mean investment decisions would need to be made in the next year or two to increase supply by 2030.

    Poliscanova said it was supply chain strategies that would “make or break the EV transition in Europe, and render some companies obsolete”. However, she added that European manufacturers were ahead of rivals from China and the US in “cleaning up supply chains”. Some mineral suppliers have previously been found to have used child labour, exploited low-paid workers or used environmentally damaging methods.

     

  • Sustainable raw materials for green technologies

    Sustainable raw materials for green technologies

    Euromines President invited European Institutions and Automotive sector to jointly assess the realities of supply of raw materials to European manufacturers. His two statements summarize the past decade approach to raw materials in the EU: “For years Europe was far too complacent in outsourcing pollution – and receiving raw materials for our consumption in return” – and yet “Nowhere else mining is happening at such a high level of environmental protection as in Europe”.

    From the rare earth crisis in the beginning of the 2000s, to the magnesium, gallium and germanium graphite crunch today – the intervals demonstrating European vulnerabilities are becoming shorter. The resulting dependency creates pressure on political leadership in the EU. European Institutions seem to have acknowledged this threat to competitiveness of the European industry. After all, the same materials are critical to achieving Green Deal made in Europe with or values, industry and society. Only by including all these aspects the green transformation can be a successful role model to copy for other countries.

    In 1957, European leaders had the incredible foresight to make war economically impossible and eventually unthinkable. At the heart of it: integrating the production of raw materials across borders of countries, obliging them to work together. Across various economic crises, Europe calibrated a systemic prosperity and comfort by trading, finding allies and ensuring access to energy and non-energy commodities.

    Today EU faces yet another challenge: climate change and the required energy, consumption and production transition, shift the rules of the game to a new level of fierce competition. War has returned to Europe, and it is not a given that allies and rivals alike step in for what Europe decided to outsource. Such increasing exposure is a serious to our prosperity and innovation power to find answers to the gargantuan task of tackling climate change.

    ESG and geopolitical imperatives while maintaining prosperity will depend on a commodity transition: metals and minerals will fuel the planet. The demand increase for metals needed for goods such as e-vehicles and the infrastructure to make this work will be enormous – we cannot even fathom it. This requires bold steps in how we treat and use raw materials: not just specific in form of applications or technologies but systemic across value chains. After all, the sustainability impact of driving an e-vehicle depends on the sustainability performance of the raw materials it is made of.

    European mining emerges as a strategic linchpin for autonomy in green, digital, and defence sectors. It can provide the raw materials needed to make a wind turbine run and a battery to store this electricity, but also serve as a benchmark for ESG standards for imported materials.

    Europe is not alone.

    The EU’s Green Deal is not the only sustainability transition policy – the race for raw materials will intensify even more, scrambling to get access to the most promising deposits. Control over extraction rights and refining capacity will be the defining geopolitical challenge for the decades to come. Europe needs to reckon with this on three accounts:

    Utilize Europe’s Resources: Europe must tap into its promising deposits for critical and strategic materials, utilizing the knowledge and expertise of EU mining companies with minimal environmental impact.

    Build Sustainable Partnerships: Outsourcing to areas with lower regulatory requirements is not an option. Europe must engage in partnerships with allies willing to uphold high standards in environmental, social, and governance issues.

    Circular Economy Integration: Beyond recycling, integrating mining into the Circular Economy concept can minimize primary raw material extraction for other sectors.
    Redefining Raw Material Approaches.

    Raw materials should no longer be considered merely a procurement issue. Confirming this disparity in approaches is the fact that for many sectors, supply of raw materials is sixth or seventh tier on their demand list. Yet, without securing the premium for the ESG criteria in sourcing them, the rift between downstream manufacturing and upstream mining companies will continue to render supply chains fragile, prone to disruptions and impede sustainability and human rights standards.

    Extraction, refining, and manufacturing need to compete on more than “just-in-time” and cheapest prices. This behaviour change is a catalyst to do more in a sustainable way and be honest in how we source and procure raw materials to fulfil our own sustainability ambitions.

    Sustainability is not an externality.

    Internalizing high production standards in upstream and security of supply externalities in downstream industries must go hand in hand to recognize costs and benefits of a sustainable raw materials extraction. Mining as the base of many Green Deal objectives – if done right – decarbonizes entire value chains. LKAB’s pellets are 7 times less CO2-intensive than sinter production and key for decarbonized steel production. Boliden’s Aitik and Kevitsa mines are prime examples of mine electrification -providing low-carbon copper and zinc that are needed for electrification through increased deployment of fossil free electricity.

    The EU raw materials mining industry has all the elements ready – from deposits, environmentally friendly extraction processes to a world-class R&D ambition to further reduce the impact of mining and providing critical and strategic raw materials. To make this happen Europe must act now! The Critical Raw Materials Act is a paradigm shift politically recognizing the benefits of our own backyard. The momentum initiated with the CRM Act must not be slowed down. There is a lot to do if we are serious about our role in the global green transition – starting with the production of our daily-life consumption.

     

  • Council and Parliament strike provisional deal to reinforce the supply of critical raw materials

    Council and Parliament strike provisional deal to reinforce the supply of critical raw materials

    The political agreement reached today keeps the overall objectives of the original proposal but strengthens several elements. It includes aluminium in the list of strategic and critical materials, reinforces the benchmark of recycling, clarifies the permitting procedure for strategic projects, and requires relevant companies to perform a supply-chain risk assessment on their sourcing of strategic raw materials.

    Ensuring the supply of raw materials locally and globally

    The Commission’s proposed regulation establishes a list of 34 critical raw materials (including 16 strategic ones) and sets targets to increase the EU contribution of these substances (10% for the extraction; 40% for the processing and 15% for the recycling). To achieve this, the proposal called for a quick and simplified permit procedure for strategic extracting projects, to be dealt by a single national contact point. It also called for risk analysis of possible dependencies, member states’ exploration plans, higher investment in research, innovation and skills; and protection of the environment by promoting the circularity and sustainability of raw materials.

    On the global stage, the regulation identified measures to diversify imports of critical raw materials ensuring that not more than 65% of the Union’s consumption of each strategic raw material comes from a single third country.

    Main elements of the agreement

    The provisional agreement adds one critical raw material (aluminium) to the list of strategic raw materials (hence, 34 critical raw materials and 17 strategic raw materials). The compromise text also considers that in addition to the natural graphite (which already in the list) the synthetic graphite will also be a strategic raw material during a period of three years, until the Commission makes the first revision of the list.

    Furthermore, the agreement allows that projects able to produce innovative raw materials that substitute strategic raw materials in relevant technologies can be candidates to become strategic projects

    Member states will have the possibility to object on whether a project will be developed on their territories.

    Realistic benchmarks

    The provisional agreement keeps the benchmarks of 10% for extraction of raw materials and 40% for processing but increases the benchmark for recycling to at least 25% of EU’s annual consumption of raw materials. In addition, there should be substantial increase on the recovery of raw materials present in waste.

    Promoting technologies to moderate consumption

    The co-legislators propose that 18 months after the entry into force of the regulation, the Commission shall present a report on the estimated consumption of each critical raw material for the next three decades.

    Points of single contact

    According to the different administrative systems of each country, member states will be able to designate one or several single contact points, at the level they decide (local, regional or national) and the different stages of the value chain (mining, processing, recycling). Promoters of strategic projects will have a “relevant administrative unit” in these points of single contact who will facilitate the permit granting process for the project.

    Permitting procedure

    The provisional compromise also unifies the timings of the permit procedure. The total duration of the permit granting process should not exceed 27 months for extraction projects and 15 months for processing and recycling projects. While the first step of the environmental impact assessment (the production of the report, which must be conducted by the project promoter) will be not included in the time-line for the project approval, the public consultation needed for an environmental impact assessment will be part of the total duration of the permit process.

    Company risk preparedness

    Large companies exposed to shortages of strategic raw materials in strategic technologies (i.e. battery manufacturers, hydrogen producers, renewable energy generators, data transmission and storage, or aircraft production) will have to regularly carry out a risk assessment of their supply chain of strategic raw materials, which they may present to their board of directors, mapping where the materials come from, what can affect their supply and what are the vulnerabilities to supply disruptions.

    Background

    The Critical Raw Material Act, together with the Net Zero Industry Act and the Reform of the electricity market design is one of the flagship legislative initiatives of the Green Deal Industrial Plan that the Commission presented on 1st February 2023. The three were presented as a package on 16th March. The Council adopted the negotiation mandate on 30th of June.

  • How a junior mining company is bringing critical materials supply back to Europe

    How a junior mining company is bringing critical materials supply back to Europe

    Historically, the European Union (EU) has relied on countries like China for its supply of critical raw materials, but companies like Leading Edge Materials are moving to shift the focus back on its own soil.

    Case in point, the EU proposed the Critical Raw Materials Act (CRMA) in March 2023, which aims to boost supply of strategic raw materials that are crucial in advancing the EU’s move towards a sustainable, digital and sovereign future.

    This comes as a move to shift supply away from China, which currently processes almost all rare earth elements. It is estimated that the country currently produces roughly 70 per cent of global production of rare earth elements, however there are three facilities in Europe that are and will be able to produce the materials – in Sweden, France and Estonia – which will effectively reduce China’s overwhelming grip on the permanent magnet industry

  • Battery-grade lithium production to start in Germany

    Battery-grade lithium production to start in Germany

    It has been deemed the “new gold rush” – a frantic pursuit to catch up with China in the production and refinement of materials essential for various products, ranging from computers to cars. However, one must question whether this endeavor has come too late to salvage Europe’s car industry.

    In the heart of a former East German town, lies the initial outcome of the EU’s ambitious plan to mitigate risks and reduce dependence on imports for the green revolution. In Bitterfeld-Wolfen, located 140km southwest of Berlin, a company listed in Amsterdam is racing against time to complete the construction of an expansive factory that will be the first in Europe to yield battery-grade lithium.

    Across Europe, a competition has ensued to both mine the silver-white soft metal and manufacture its refined form, lithium hydroxide, which serves as the key ingredient in batteries powering electric cars, robot vacuum cleaners, and mobile phones.

    Stefan Scherer, the CEO of AMG Lithium, remarks, “Everybody desires access to lithium. This is why they refer to it as white gold; it has sparked a gold rush. There is hardly a company in the raw materials industry that isn’t exploring lithium. It is simply too enticing.”

    The EU finds itself in a state of urgency, having belatedly realized its excessive reliance on China for several critical raw materials. Brussels has identified 16 such materials as priorities in a new industrial strategy aimed at safeguarding the bloc’s economy and achieving the ambitious goal of reducing net greenhouse gas emissions by at least 55% by 2030.

    This dependency also unsettles German and other European car manufacturers, as their domestic markets face threats from high-quality Chinese cars and China’s control over lithium processing.

    The concerns are so significant that Ursula von der Leyen, the President of the European Commission, has initiated an anti-subsidy investigation into Chinese imports, fearing that major manufacturers like Volkswagen and BMW will struggle to keep up with the supply of electric cars from China.

    However, it is worth noting that lithium, for the most part, does not originate from China. So how has China managed to secure such a dominant position? Has Europe been negligent?

    Lithium supplies are primarily controlled by five countries, with the majority of the mineral being mined in Australia and Chile. Yet, it is China that has taken the raw material and become the primary supplier of refined lithium.

    “They have now become the global hub, granting them economic leverage – or more bluntly, the means for economic coercion,” says an EU source.

    The roots of the EU’s dependence on China can be traced back to the 1980s, following the oil crisis when the Chinese leader at the time, Deng Xiaoping, astutely observed, “The Middle East has oil. We have rare earths.”

    Rare-earth materials were once abundant in the United States, Europe, and Japan. However, investors in those regions withdrew from mining, deeming it a costly and environmentally detrimental industry. This retreat handed China a significant share of the market, allowing it to acquire the world’s stockpile and eventually become the global hub it is today.

    The Russian invasion of Ukraine has brought the lopsided trade relationship into sharper focus.

    “Lithium and rare earths are already replacing gas and oil at the heart of our economy. By 2030, our demand for those rare earth metals will increase fivefold,” warned Von der Leyen in her 2022 state of the union address. “We must avoid falling into the same dependence as with oil and gas.”

    Consequently, the EU has embarked on a journey to accelerate the development of green technologies through the Critical Raw Materials Act, which was swiftly passed earlier this year. Peter Handley, the head of the raw materials unit in the commission, describes its passage as an accomplishment in record time. The act relaxes state aid rules to compete with the US’s Inflation Reduction Act, sets higher targets for extraction within Europe, and promotes product recycling, particularly for items like phones that contain lithium. If all goes according to plan, the act will become a regulation in the EU this month, setting a high level of ambition.

    Before embarking on a trip to Latin America to secure deals for raw material production, Von der Leyen stated that the EU is “97% dependent on China for lithium.”

    Back in Bitterfeld, Scherer surveys the colossal plant that will contribute to reducing this dependency. He highlights the towering 20-meter metal vats for lithium solutions and the drying machines that produce a substance resembling sugar crystals – just some of the processes involved in creating the final refined product, eagerly awaited by clients as the first batches of EU-manufactured lithium.

    AMG Lithium anticipates commencing operations by the end of this year, with orders extending to 2026. The demand for fresh lithium salt in Europe is projected to rise to 500,000 tonnes annually by 2030, and Scherer affirms their plan to produce 100,000 tonnes, sufficient to provide the active charging ingredient for 2.5 million cars“`
    It has been dubbed the “new gold rush” – a frenzied race to catch up with China in the production and refining of essential materials for various products, from computers to cars. However, one must question whether this effort has come too late to salvage Europe’s car industry.

    In the heart of a former East German town lies the initial outcome of the EU’s ambitious plan to mitigate risks and reduce reliance on imports for the green revolution. In Bitterfeld-Wolfen, located 140km southwest of Berlin, a company listed in Amsterdam is racing against time to complete the construction of a vast factory that will be Europe’s first to produce battery-grade lithium.

    Across Europe, a competition has emerged to both mine the silver-white soft metal and manufacture its refined form, lithium hydroxide, which is a crucial component in batteries powering electric cars, robot vacuum cleaners, and mobile phones.

    Stefan Scherer, the CEO of AMG Lithium, notes, “Everyone wants access to lithium. That’s why they call it white gold; it has sparked a gold rush. There’s hardly a company in the raw materials industry that isn’t exploring lithium. It’s simply too alluring.”

    The EU finds itself in a state of urgency, having belatedly realized its excessive dependence on China for several critical raw materials. Brussels has identified 16 such materials as priorities in a new industrial strategy aimed at safeguarding the bloc’s economy and achieving the ambitious goal of reducing net greenhouse gas emissions by at least 55% by 2030.

    This dependence also unsettles German and other European car manufacturers, as their domestic markets face threats from high-quality Chinese cars and China’s control over lithium processing.

    The concerns are significant enough that Ursula von der Leyen, the President of the European Commission, has launched an anti-subsidy investigation into Chinese imports, fearing that major manufacturers like Volkswagen and BMW will struggle to keep up with the supply of electric cars from China.

    However, it is worth noting that lithium, for the most part, does not originate from China. So how has China managed to secure such a dominant position? Has Europe been negligent?

    Lithium supplies are primarily controlled by five countries, with the majority of the mineral being mined in Australia and Chile. Yet, it is China that has taken the raw material and become the primary supplier of refined lithium.

    “They have now become the global hub, giving them economic leverage – or more bluntly, the means for economic coercion,” says an EU source.

    The roots of the EU’s dependence on China can be traced back to the 1980s, following the oil crisis when the Chinese leader at the time, Deng Xiaoping, shrewdly observed, “The Middle East has oil. We have rare earths.”

    Rare-earth materials were once abundant in the United States, Europe, and Japan. However, investors in those regions withdrew from mining, deeming it a costly and environmentally detrimental industry. This retreat handed China a significant share of the market, allowing it to acquire the world’s stockpile and eventually become the global hub it is today.

    The Russian invasion of Ukraine has brought the lopsided trade relationship into sharper focus.

    “Lithium and rare earths are already replacing gas and oil at the heart of our economy. By 2030, our demand for those rare earth metals will increase fivefold,” warned Von der Leyen in her 2022 state of the union address. “We must avoid falling into the same dependence as with oil and gas.”

    Consequently, the EU has embarked on a journey to accelerate the development of green technologies through the Critical Raw Materials Act, which was swiftly passed earlier this year. Peter Handley, the head of the raw materials unit in the commission, describes its passage as an accomplishment in record time. The act relaxes state aid rules to compete with the US’s Inflation Reduction Act, sets higher targets for extraction within Europe, and promotes product recycling, particularly for items like phones that contain lithium. If all goes according to plan, the act will become a regulation in the EU this month, setting a high level of ambition.

    Before embarking on a trip to Latin America to secure deals for raw material production, Von der Leyen stated that the EU is “97% dependent on China for lithium.”

    Back in Bitterfeld, Scherer surveys the colossal plant that will contribute to reducing this dependence. He highlights the towering 20-meter metal vats for lithium solutions Critical Raw Materialsand the drying machines that produce a substance resembling sugar crystals – just some of the processes involved in creating the final refined product, eagerly awaited by clients as the first batches of EU-manufactured lithium.

    AMG Lithium anticipates commencing operations by the end of this year, with orders extending to 2026. The demand for fresh lithium salt in Europe is projected to rise to 500,000 tonnes annually by 2030, and Scherer affirms their plan to produce 100,000 tonnes, sufficient to provide the active charging ingredient for 2.5 million cars.

  • Many society organisations are calling on the EBRD to reconsider its approach to mining investments

    Many society organisations are calling on the EBRD to reconsider its approach to mining investments

    Twenty civil society organisations from Albania, Armenia, Azerbaijan, Bosnia and Herzegovina, Georgia, Mongolia, Uganda, Ukraine and Uzbekistan, as well as seven international environmental and human rights organisations, are calling on the European Bank for Reconstruction and Development (EBRD) to reconsider its approach to mining investments.

    In their recommendations, civil society groups urge the Bank to do more to safeguard the environment and welfare of local communities and to take action to reduce the demand for critical raw materials.

    The EBRD is currently in the process of revising its Mining Sector Strategy for 2024 to 2028. The draft document proposes an increase in investments in mining critical raw materials required for the green and digital transition, as well as the promotion of exploration.

    On 15 September, civil society organisations submitted recommendations regarding the EBRD’s mining strategy, advocating for the following measures:

    • Prioritise the circular economy over just mining;
    • Focus on reducing material footprints and promote recycling;
    • Ensure that no mining investments are made in countries that do not enforce environmental laws;
    • Define no-go zones and prohibited technologies;
    • Guarantee Free Prior Informed Consent for Indigenous Peoples and consent from all affected communities;
    • Deliver tangible benefits to local communities in the countries where the EBRD operates.

    Although the draft strategy highlights the importance of improving relations between mining companies and local communities, public consultations on the draft were conducted during the summer holiday period. A very small number of handpicked groups were invited at extremely short notice to local consultation events, seriously limiting public input.

    The mining sector has a shameful track record of pollution, human rights abuses, community resistance and retaliation against activists around the world. It remains the most perilous sector for environmental defenders, with almost 30 per cent of annual attacks occurring within the industry. EBRD-funded projects in Armenia (Amulsar) and Bosnia and Herzegovina (Adriatic Metals) have already prompted complaints by affected communities to the EBRD’s Independent Project Accountability Mechanism (IPAM) due to environmental pollution and lack of public consultation.

    Nina Lesikhina, Policy Officer at Bankwatch, says: ‘Business as usual is no longer an option. Relying solely on environmental and social safeguards is insufficient, given their gaps and inadequate implementation. The EBRD needs to consider each country’s capacity to implement mining projects sustainably and how to reduce demand for critical raw materials in the first place. The imperative for a green transition should not be used as an excuse to reduce efforts, but as a motivation to do more to ensure that the transition is truly green and equitable.’

    Sukhgerel Dugersuren, Chair at Oyu Tolgoi Watch, Mongolia, says: ‘If the EBRD and other development banks increase financing for mining, corporations will scramble to secure critical and/or transition minerals. This will have further negative impacts on climate change, contaminating the environment, depleting water resources and deepening desertification processes. The Mongolian economy is dependent on a single sector – mineral extraction – which is closely tied to the Chinese market. Any future mining strategy must be guided by principles that balance economic, geopolitical and other risks.’

    Gaelle Dusepulchre, Deputy Head of the Business, Human Rights and Environment Desk at the International Federation for Human Rights, says: ‘Mining projects are among the most harmful to human rights and the environment. Any mining strategy must promote a truly just transition. These projects not only require increased due diligence but also rely on the meaningful participation and consent of communities likely to be affected. Protecting human rights and environmental defenders is just as essential.’

  • EU moves to cut dependency on China for battery and solar panel materials

    EU moves to cut dependency on China for battery and solar panel materials

    The European Parliament, in a significant move, has voted to reduce regulatory burdens and diversify the sources of critical raw materials like lithium and silicon. This plan aims to secure a steady supply of these materials, which are essential for the production of solar panels, electric vehicle batteries, and other crucial elements of the EU’s green transition.

    By approving this act with an overwhelming majority of 515 votes in favor and 34 against, the European Parliament seeks to decrease its reliance on a single country for more than 65% of any strategic raw material by 2030. The details of this act will now undergo negotiations between the parliament and the council.

    Nicola Beer, a German MEP from the liberal Renew Europe group, who was responsible for the proposal, expressed that the European Parliament has taken a clear stance on the security of supply, emphasizing the path towards European sovereignty and competitiveness. The EU’s shift towards clean energy necessitates access to critical raw materials like lithium and silicon, as they are vital for electric vehicle batteries and solar panel semiconductors. Presently, the EU depends on a small number of countries, including China, as suppliers.

    Hildegard Bentele, a German MEP from the center-right European People’s Party, stressed the importance of increasing the supply of reliable sources for raw materials, stating that electric mobility cannot thrive without batteries, and batteries cannot be produced without an adequate supply of lithium. She emphasized the need for a credible and strategic raw materials policy to achieve this goal.

    The newly proposed plan establishes targets for the extraction, processing, and recycling of critical raw materials. By 2030, the EU aims to have the capacity to extract at least 10% of its demand and process 50% of its demand for these materials. The plan also includes provisions allowing for up to 20% of new processing capacity to come from partnerships with emerging markets. Furthermore, the recycling capacity is expected to reach 45% for the collection, sorting, and processing of strategic materials from waste.

    Mohammed Chahim, a Dutch MEP from the center-left Socialists and Democrats, highlighted the potential to reduce import demand through improved material efficiency and recycling. He noted that the revised plan expands the scope of national circularity plans to encompass more reuse, refurbishment, and recycling, in comparison to the original proposal put forth by the European Commission.

    According to the International Energy Agency’s net-zero emissions scenario, global demand for key critical minerals, including nickel, cobalt, lithium, copper, and neodymium, is projected to grow by 1.5 to seven times by the end of the decade. This underscores the urgency for the EU to diversify its sources of these materials.

    Since the conflict between Russia and Ukraine exposed the EU’s overreliance on Russian gas imports, European politicians and businesses have been actively seeking alternative suppliers for key minerals. Markus Beyrer, the head of the industry lobby group BusinessEurope, acknowledged the European Parliament’s recognition of the importance of securing and diversifying the supply of critical raw materials. He particularly welcomed the support for streamlined permitting processes, reduced bureaucratic obstacles, and the focus on strengthening partnerships with trading partners.

    However, some environmentalists have raised concerns regarding the act, fearing that it may lead to poorly regulated mines in countries like Finland, which is rich in critical minerals, thereby posing risks to the environment. They have criticized the proposal for expediting the issuance of permits without adequately raising the environmental standards that mining companies must adhere to.

    Satu Jaatinen, a board member of MiningWatch Finland, an environmental nonprofit organization, emphasized that mines and the battery industry can be made sustainable by adopting existing technologies. She expressed disappointment that the industry is unwilling to make the additional investments required for sustainability, asserting that mines should reflect their true costs.

    The negotiations and implementation of this act will play a significant role in shaping the EU’s approach to securing critical raw materials while balancing environmental concerns and sustainability.

  • Norwegian Mineral Strategy to ramp up production of materials crucial to global industry

    Norwegian Mineral Strategy to ramp up production of materials crucial to global industry

    In 2021, Norway was revealed to be the location of another large deposit of critical raw materials (CRM),1 as 240 million MT of phosphate, vanadium, and titanium were estimated to be in Storeknuten. This would already be a vast resource of three of the 30 critical raw materials, but since then has been shown by drilling operations to be as much as 910 million MT. The global economy, industry, and the current state of world politics mean that Norway has been presented with an opportunity to take a more prominent role in supplying much of the world’s industrial innovations. This includes the EU and the US, and stands to give Norway a lot more political and economic power in the coming years via developing green industries, increasing exports and growing the number of jobs in the Norwegian industry.

    As the name suggests, the EU defines critical raw materials as materials that are critical to industry. Generally speaking, this includes metals and minerals that cannot be replaced by a more common material, that have a significant supply risk, and if there is a disruption of supply, will have economic consequences. For Norway, this will include aluminium, copper, cobalt, zinc, and much more. With the EU moving towards less dependence on China, Russia and other countries for importing, Norway has become a key player in supplying these materials.

    CRM in Europe

    The shift towards greater production of CRMs comes from a variety of factors, and the EU plan, known as the Critical Raw Materials Act, has a number of objectives. This act, introduced in March 2023, seeks to strengthen the EU’s CRM capacity, reduce dependency, increase preparedness, and promote supply chain sustainability and circularity.2 The reduction of dependency essentially means the diversification of Europe’s supply of materials. Ideally, no more than 65% of one critical material is to be imported from one source. This would lead to several advantages, including the facilitation of manufacturing more green energy solutions, as well as the political advantages of not relying too much on one country’s source. With political tensions in China and the war in Ukraine with Russia, this would be a significant development for the EU and is a key cause of the Critical Raw Materials Act’s existence.

    Similarly, and since Norway is not an EU Member State, Norway has its own Green Industrial Initiative. This roadmap aims to increase investment and create jobs within green industries, as well as cutting pollution as it turns towards low-to-no emissions. Vital to this are critical metals and materials. Norway currently has a lot of these materials for not only themselves but also Europe.

    The Norwegian Mineral Strategy

    As such, Norway has had to change its strategy in terms of mining and processing these materials in order to keep up with the demand from the EU and themselves. In June, the Norwegian government unveiled the Norwegian Mineral Strategy. This strategy is a five-pillar process that aims to improve the Norwegian mineral industry and is a first step towards ‘the world’s most sustainable mineral industry.’3 Within this strategy are five key areas of focus.

    Faster implementation of mineral projects

    This is primarily concerned with the mapping of critical raw materials as well as reducing the time taken to process the mined materials. Obviously, this will reduce the time from mining the material or mineral to using it or exporting it for use, which in turn will reduce the time taken to develop green industries and grow profit for the economy.

    The mineral industry must contribute to the circular economy

    A circular economy is designed to minimise both the materials put in as well as the waste materials or pollution outputted. Norway’s circular economy is relatively low at 2.4% as of writing this, so an increase would be beneficial for green plans as well as profits. This will also decrease the cost of construction as material is recycled for use.

    A more sustainable mineral industry

    Similar to many countries and companies, Norway is aiming for its mineral industry to be zero emission or net zero by 2030. This will also specifically target the use of non-environmentally friendly chemicals in manufacturing processes. This will not only develop new industries as methods and constructions need to be updated or replaced, and therefore create new jobs, it will also benefit the planet and make the industry as a whole much more appealing to people conscious of the effects of industry on the planet.

    Private capital is a must

    Private capital will be key to funding these endeavours. Furthermore, all options will be explored to increase the profitability of mineral mining and processing, as well as increase the opportunities for communities, i.e. creating jobs. Altogether this aims to greatly stimulate the Norwegian economy.

    Norway will continue to supply international partnerships with green value chains

    This new strategy aims to change Norway’s global image to being a mineral nation and to further strengthen the ties between Norway and the rest of Europe in terms of trading critical materials. The mining industry has frequently overlooked value chains, leading to wasted resources and isolated operations, leading to miscommunication and bogged-down production.

    These five points constitute the Norwegian Mineral Strategy and are an excellent vision of Norway’s hope for its future in mining and processing critical raw materials. With these coming to fruition, Norway will occupy a spot of increasing power on the world stage.

    Europe’s position and Norway’s future

    As mentioned earlier, Europe currently has a tenuous relationship with China. The political issues in China under EU criticism range from the mistreatment of Uighur Muslims to China’s continued alliance with Russia after their invasion and sustained war in Ukraine. Yet, China is currently able to mine two-thirds of the 30 raw materials, giving them a dominating position in industrial endeavours.

    Similarly, Russia was a very contentious country even before the invasion of Ukraine, and most of Europe is on edge regarding a future with Russia. Still, Russia is in the top three countries for mining critical raw materials, with China at the top and the US between them. The EU being strong allies with just one of these three is a weak position, and one that they have started looking to rectify in recent years. Norway has an abundance of these materials and so it is easy to see how this will not only benefit the EU but Europe as a whole and especially Norway. With the EU diversifying their sources of critical raw materials, Norway stands to profit greatly from exporting to Europe, as well as its own industry developing both in economic terms and green industrial terms.

    All of these factors, along with the new Norwegian Mineral Strategy, mean that Norway may well be catapulted up in the ranks of top critical raw material exporters, and Norway itself will only benefit from this in profit and political power. The benefits to industry will also give the country a swathe of new jobs and the ability to develop green solutions and industries to benefit the world and humanity as a whole.

     

  • The geopolitical dimension of the Jadar Lithium project in Serbia

    The geopolitical dimension of the Jadar Lithium project in Serbia

    On March 16, the European Commission published a proposal for a new Law on Critical Raw Materials. EU wants to compete with China and the USA in the production of green technologies, as well as to reduce the emission of harmful gases by 2050. Critical raw materials are primarily rare metals necessary for modern green technologies, and lithium is among them. EU members are obliged to carry out geological research and mapping of new deposits in order to reduce import dependence on China through the exploitation of critical raw materials. It is also planned to form a Committee for Critical Raw Materials, which will have the right to declare certain exploitation projects as strategic and reduce the maximum period for issuing permits for the operation of such mines to 24 months. Serbia is not mentioned in the new law, but cooperation with exporters such as Namibia, Chile and Canada is announced. As Serbia is home to one of the largest lithium deposits in Europe, it is not excluded that the Jadar project will also have a geopolitical dimension. Especially since Serbia opened negotiation chapter 15 on energy on December 14, 2021, in the midst of protests against amendments to the Law on Referendum and the Law on Expropriation, which, it was believed, served to speed up the implementation of the Jadar project. Meanwhile, BIRN obtained a report from the meeting between the representatives of the Rio Tinto company and the head of the EU Delegation in Serbia, Emanuel Gioffre, held on March 25, 2022, two months after the end of the project was allegedly put on hold. The company’s representatives then said that they support the local one, but that they are afraid of the results of the national referendum.

    A fairy tale of accelerated growth

    With its GDP per capita of 7,803 euros, Serbia is 2.6 times behind a medium-developed country such as Slovakia, and even 4.7 times behind the EU average. In other words, the GDP per inhabitant of Serbia would have to grow by 10 percent per year on average over the entire decade just for Serbia to reach today’s Slovakia. Or 13 percent per year to be similar to what it was then (or only slightly less if we take into account the Balasa-Samuelson effect that would act on the appreciation of the dinar and which would eventually help to equalize the GDP per capita faster), assuming that Slovakia in that period grows a modest 2.5 percent. It is immediately clear that this kind of growth is simply not possible – neither without the Jadar project, nor with ten such projects in the next ten years. The President of Serbia has repeatedly said that the exploitation of lithium would contribute to GDP growth of 3.5 to 4 percent. “We would have 3.5-4 percent higher growth on an annual basis,” he literally said. Growth higher by 3.5-4 percentage points per year means that, say in 2022, growth would be around 6.05 percent (actual growth of 2.3 percent plus 3.75 percentage points), and growth higher by 3.5-4 percent would mean that it would be 2.39 percent (2.3 percent times 1.0375). I reasonably assume that the president meant percentage points, not percentages, as he said, for two reasons. First, the difference in economic growth between 2.3 and 2.39 percent, although welcome and many times closer to the real effects, is far from the economic miracle needed for Serbia to catch up with the middle developed European countries. Second, politicians – even when they know the difference between a percentage and a percentage point – almost always use a percentage in both cases to be more “understandable”. And now let’s demystify the claim that the opening of one company, no matter how big it is, could accelerate economic growth by 3.5-4 percentage points and thus enable Serbia to catch up with the mentioned countries. Admittedly, not to catch up with them, because Serbia needs growth of 10 or more percent for 10 years in a row. And Serbia has never achieved such a growth rate. Not during one year, let alone continuously. In fact, such rates can only be achieved by extremely underdeveloped countries with a growing and young population, such as China (two decades ago) or African countries. In addition, history is dominated by examples that show that through the direct exploitation of mineral raw materials, few countries, and even fewer populations, developed (became happy), and that instead of economy, corruption mostly develops. This is also shown by the countries of South America, which are incomparably richer in ores.

    Having shown that even an increase in growth by 3.5-4 percentage points alone is insufficient to fulfill the fairy tale, we will now show to what extent it is impossible and improbable to achieve it through the Jadar project. First, the information that this project would increase growth by so much is not even in the study on economic effects, prepared by Rio Tinto. The study evaluates the economic effects significantly more modestly – the project would increase the GDP by 2.8 percent in the phase of full realization – that is how much it would participate in the formation of the GDP. Therefore, if the Jadar project were to be realized, and everything else in Serbia remained unchanged, the GDP per inhabitant would increase from 7,800 to 8,029 euros. The opening of the mine would help, therefore, to cross only one-eightieth of the way to the “then Slovakia”! At the same time, all these assumptions in the Rio Tinto study refer not only to direct, but also to indirect (development of domestic suppliers and subcontractors) and induced effects of the project (generation of GDP through spending of income generated in the company). Assumed indirect effects (not directly dependent on the project) actually make up most of the assumed effects – out of 5,120 new jobs, only 1,170 are predicted to be created in the mine, and the remaining almost 4,000 are related to indirect and induced effects. This is not necessarily too optimistic, but, nevertheless, a project of this size must require serious planning – which new investments would it attract, which domestic suppliers could it hire, do they need support to increase capacity, acquire new equipment, and the like – otherwise these effects would be completely absent.

    Let’s take a step back, to the claim that the opening of one company can make up for Serbia’s 30-year lag by accelerating growth. The statement that the opening of one company could accelerate growth by 3.5-4 percentage points indicates economic illiteracy or deception. Because it would have to be a company with the economic strength and size of EPS, three Ziđina or six Michelin factories. And every year for the next ten years. At the same time, the business assets of EPS, together with Kolubar, are 4.5 times larger than the planned investments in the Jadar project, while the number of employees in EPS is 30 times larger! Considering the similarity of the industry, a convenient comparison with the Jadar project is China’s Zijin, as it had comparable investments and has six times more direct employees. At the macro level, Ziđin generates about one percent of Serbia’s GDP, and in the past, a record year for them, it participated in exports with 4.5 percent, and very similar effects are expected from the Jadar project. It is indisputable that the revitalization of the Bor mine was of great importance for the local economic activity – 20 percent of the employees and more than half of the wages paid in the Bor area. In the case of the Jadar project, the effects would be similar, but still somewhat smaller, since the surroundings of Loznica have a different economic structure and there would be a shutdown of certain economic, primarily agricultural, activities. By no means should we leave out the effect on the environment either – despite Ziđin’s alleged efforts to reduce pollution, Bor is the “black point of the Balkans”. The problem of growing pollution coincides with the start of work and increased production. Would it be the same in the case of Jadar, is one of the main questions to which there seems to be no credible answer.

    The fiscal moment is also important. As a major investor, Rio Tinto would effectively be exempt from paying corporate tax up to the amount it invested in the project – paradoxical but true, just like Ziđin. To conclude, the effects of those two investments would be comparable, they have positive sides – although not close to hyperbolic claims, for the fulfillment of which a clear strategy and a more meaningful fiscal policy are needed. Both investments, unfortunately, have negative effects, primarily on the environment. This analysis is neither for nor against the Jadar project per se. The situation in which Rio Tinto finances economic and environmental impact studies certainly has a negative effect on the credibility of the facts. Telling fairy tales has an equally negative impact. Maybe it would really have more significant economic effects, but there is no one to plan them and convince us of that. It might not have an irreparably negative impact on the environment, but no one can guarantee that. This is also the key development problem of Serbia. At this moment, I am closer to the point of view that Serbia is not institutionally mature for something like this.

    Economist Nebojša Katic also wrote about the economic effects of the Jadar project more than a year and a half ago. “If Rio Tinto start with exploit and export of ore from Serbia, export revenues will increase Serbian GDP, but these revenues belong to Rio Tinto and, as a rule, do not stay in Serbia.” Serbia will have mineral rent from that, maybe Rio Tinto will pay some taxes, and some will even get a salary working for Rio Tinto. This is where the financial benefits for Serbia will end and they will be incomparably less than the statistical growth of GDP,” Katic wrote in the author’s text, with the remark that “economists really like indirect effects because they can estimate, magnify and manipulate them as much as they want, or as much as they are paid”. The words of Luka Erceg, a native of Canada, originally from Loznica, master of law and economics and director of a company in the USA that manages investments, have even greater specific weight. All the more so since until 2013 he ran a company for the production of lithium in the USA, about which he also spoke to the leading world media, the New York Times, Bloomberg and CNN, and in 2012 he spoke about strategic minerals in the US Congress. “The Jadar project will never be able to compete economically with lithium extraction projects from salt water, which are being developed around the world.” I would recommend that Serbia explores old oil and gas sources, because in many of them, economically profitable amounts of lithium have been found,” Erceg claims for NIN.

    “Extraction from salt water is more economical and can withstand falling prices.” If we insist on the Jadar project, it will be shut down in a few years, because lithium from salt water will lower the price. More and more such will arrive from the “lithium triangle”, which consists of Argentina, Bolivia and Chile. Furthermore, lithium for car batteries is not obtained from rocks, because it has too many impurities,” explains Erceg, noting that everyone forgets that lithium batteries last for ten years, and that they can be recycled afterwards. “That’s why eventually we won’t need to produce as much lithium as we do today, because even after recycling it will be able to be used as if it had just been taken out of the mine.” It would therefore make more sense for Serbia to encourage factories for the production and assembly of lithium batteries, which are large and heavy, so local production has advantages. Such a technologically advanced industry would also be stimulating for students of engineering, electrical engineering, chemistry… and that is why it is better to deal with it than ores. I would praise the government for developing technological industries and in general I would recommend it to focus on “knowledge industries,” because the lithium mine will not create many new jobs,” Erceg points out. “After all, it is not impossible to have a lithium mine like the ones that exist in Australia.” But look at the pictures of the disasters those mines have created. At the same time, what exists in Australia does not exist in Serbia. Australian mines work because ore is sent to China for processing. When the ore is processed there, there are also battery manufacturers nearby. Where will Jadar send his ore or his lithium?” The already fantastic story of Serbian officials about lithium billions could hold water as much as possible while the demand and prices of that metal on the world market were breaking records month after month. Meanwhile, the situation has changed dramatically. On April 28, global media reported that the price of lithium carbonate had fallen to an 18-month low, from a record high of $86,170 to around $52,000 per metric ton. In March of this year, somehow just at the time when Vučić brought back to the public the story of the greatest missed opportunity, the price fell by 64.22 percent compared to March 2022. And at the same time, world agencies do not cite the key reason for such a price drop only a weak demand, but an abundant supply.

    At that time, experts estimated that the drop in lithium prices would be reflected in the drop in prices of electric cars, if their sales would not increase. And then, when the sale of electric cars increases, one could also expect a recovery in lithium prices… But that was obviously a long shot. Meanwhile, the decline continued on the first working day of this week, on September 4, a ton of lithium carbonate cost $27,861 on the world market, and just a month before that it was $37,612 or 35 percent more. The dramatic decline is even better evidenced by the fact that the price of lithium a little less than two years ago was almost three times higher than it is now. This time, lower demand contributed to the decline, not much higher than the lowest at the beginning of the pandemic, in April 2020. Despite this, Serbian officials have not changed their story, as if they are still basing their calculations on record lithium prices. It was as if time and everything else had stopped. Everything except an effort to revive the fairy tale about the economic effects that Serbia would have if the Government decided to change its position and still enable lithium mining. However, Minister Momirović was right when he said that “we will only see how this story unfolds in the coming period, but we cannot ignore the perspectives it opens up.”