MINEX Forum

Tag: EU

  • EU Requests Profit-Based Backstop for Germany’s €1.75 Billion Coal Shutdown Payout

    EU Requests Profit-Based Backstop for Germany’s €1.75 Billion Coal Shutdown Payout

    The EU is urging Germany to include a profit-based backstop in its €1.75 billion ($1.9017 billion) payout for the early shutdown of the operations of its second-largest coal miner. A state payment of up to €1.2 billion to an entity of Czech billionaire Daniel Kretinsky’s EPH Group AG has been preliminarily approved by the European Commission, according to Germany’s economy ministry. The remainder of the payout will depend on the future profitability of the assets.

    The approved sum, as reported by Bloomberg on May 31, is intended to cover costs for mine rehabilitations, closures, and the impact on jobs. To prevent overcompensation, Lausitz Energie Bergbau AG (LEAG) will be required to provide proof of future costs and will be compensated from the remaining sum of €550 million, according to a letter from the EU’s Competition Commissioner Margrethe Vestager.

    Germany is working to accelerate the phaseout of coal in its power generation mix after failing to meet its emissions reduction targets. In 2020, the government agreed to pay billions of euros in compensation to LEAG and RWE AG to shut down coal-fired power plants by 2038. Now, to cut carbon emissions faster, the state is negotiating to advance the coal exit by eight years.

    In 2022, RWE agreed to a 2030 phaseout and will receive €2.6 billion in state payments. LEAG is still negotiating, aiming to continue burning coal beyond the end of the decade. Fossil fuel plants have to pay for carbon permits, and rising costs could squeeze coal profits. The backstop measure is designed to address this—if LEAG shuts down plants early due to unprofitability, the subsidy would be reduced. LEAG maintains that coal will remain profitable until 2038, the current legal exit date.

    “This is a bet on the future,” economy minister Robert Habeck said at a press conference in Berlin, noting the difficulty in calculating foregone profits for 2038. The European Commission still needs to give its final decision on the payment.

  • Resistance to EU Coal Phase-Out Evident in Bulgarian Mining Village

    Resistance to EU Coal Phase-Out Evident in Bulgarian Mining Village

    In Beli Bryag, a Bulgarian mining village already displaced for an open-pit mine, opposition to the European Union’s coal phase-out is palpable. Despite significant community displacement to make room for the mine’s expansion, Bulgaria’s commitment to exit coal by 2040 aligns with EU aims for carbon neutrality by midcentury. However, for residents like Beli Bryag Mayor Ivelina Dimcheva, the situation is dire, especially with uncertainty looming over the mine’s longevity. The resistance to the Green Deal underscores broader concerns in coal-dependent Bulgaria ahead of both European parliamentary and national elections. Stanimir Georgiev, a veteran miner, voices discontent, organizing protests against what he perceives as a threat to livelihoods posed by the EU’s environmental policies.

  • EU and Australia Nearing Strategic Partnership on Raw Materials for Green and Digital Transitions

    EU and Australia Nearing Strategic Partnership on Raw Materials for Green and Digital Transitions

    The European Union (EU) and Australia are on the brink of forging a strategic partnership aimed at securing the essential raw materials crucial for their respective green and digital transitions. According to a spokesperson from the European Commission, negotiations have been underway for a memorandum of understanding (MoU) that will lay the groundwork for this partnership. Commission spokesperson Johanna Bernsel disclosed to POLITICO on Monday that they anticipate signing this pivotal agreement as early as May. Sources close to the discussions revealed that both parties have reached a substantial consensus on the content of the MoU, which is nearing its final form. An official, speaking on condition of anonymity due to the confidential nature of the talks, suggested that the announcement of the deal could be expected in the upcoming weeks or months.

  • Euro Manganese’s Chvaletice Project Positioned to Support EU’s Critical Raw Materials Act

    Euro Manganese’s Chvaletice Project Positioned to Support EU’s Critical Raw Materials Act

    Euro Manganese Inc. issued follow-up remarks today regarding the European Commission’s recently approved Critical Raw Materials Act (CRMA), aimed at ensuring a sustainable supply of essential materials for the energy transition. With the Council of the EU granting final endorsement to the CRMA, Euro Manganese’s Chvaletice Manganese Project in the Czech Republic emerges as a pivotal asset, poised to become the sole European source of high-purity manganese crucial for the battery supply chain. The Act, officially adopted on March 18, 2024, identifies high-purity manganese as a strategic raw material vital for Europe’s decarbonization objectives and defense applications, while also designating manganese as a critical raw material due to its economic importance and supply risk. Dr. Matthew James, President & CEO of Euro Manganese, hailed the EU’s approval of the CRMA as a significant step towards securing critical materials for the energy transition, underscoring the potential of the Chvaletice Project to address these needs.

  • Poland Requests Extension of EU Coal Plant Subsidies Until 2028 Amid Transition to Nuclear Energy

    Poland Requests Extension of EU Coal Plant Subsidies Until 2028 Amid Transition to Nuclear Energy

    Poland, in a bid to facilitate its transition to nuclear energy by the next decade, is seeking an extension of EU rules permitting coal plant subsidies until 2028. Maciej Bando, the deputy climate minister responsible for strategic energy infrastructure, emphasized the necessity of coal power generation until nuclear facilities become operational. With coal currently contributing 60% of electricity output and serving as a backup for intermittent renewable sources, Warsaw aims to have its first large-scale nuclear plant operational by 2033. Bando highlighted the potential collaboration among EU nations seeking support for their energy assets, citing Germany’s pursuit of EU approval for gas plant subsidies. Despite plans for a floating liquefied natural gas terminal in Gdansk, Bando suggested its expansion might not be necessary until after 2030 due to lower demand projections.

  • Kazakhstan Prepares for EU Carbon Regulations Impact on Export Industries

    Kazakhstan Prepares for EU Carbon Regulations Impact on Export Industries

    Representatives from the public sector, businesses, and experts gathered at a seminar for industrial exporters in Kazakhstan, organized by the OECD-SIPA and QazTrade, to discuss international experiences in decarbonizing the economy. From 2026, European countries will adopt transboundary carbon regulations, extending the new carbon tax to Kazakhstani export goods. As of January 1, 2024, a transitional period for businesses is in effect, after which increased environmental levies on emissions will affect six industrial sectors, including the production of ferrous metals, aluminum, cement, fertilizers, hydrogen, and electricity.

    Vice Minister of Ecology and Natural Resources Mansur Oshurbayev stated that the introduction of the border carbon mechanism entails significant collaborative work with relevant ministries and industrialists. An interdepartmental working group has already been established to swiftly develop proposals and identify risks for Kazakhstani enterprises.

    Nurlan Kulbatyrov, Deputy CEO of QazTrade, emphasized the relevance of the EU’s “Green Deal” and the introduction of the border carbon adjustment tax to Kazakhstan. With the existing Enhanced Partnership and Cooperation Agreement between the two parties, covering a wide range of initiatives, QazTrade has been conducting informational events on carbon taxation for export-oriented companies in collaboration with the Ministry of Trade and Integration since last year.

    While supporting the EU’s sustainable development and decarbonization goals, Kulbatyrov emphasized the need to ensure they don’t hinder international trade. Currently, the EU accounts for 39% of Kazakhstan’s exports, including oil, petroleum products, ferroalloys, coal, uranium, wheat, and other goods, with a positive trend in trade volumes. In 2023, Kazakhstan exported $41.4 billion worth of products to the EU, including $388.7 million worth of carbon-intensive goods.

    According to Delfin Salard, Senior Expert at the Directorate-General for Taxation and Customs Union of the European Commission, transboundary regulations will primarily affect Kazakhstan’s black metallurgy and aluminum sectors, which accounted for about 0.9% and 0.8% of Kazakhstan’s total exports to the EU in 2022. European experts anticipate increased shipments of Kazakhstani products with a high carbon content.

    Industrial enterprises will be required to submit quarterly reports to the European Commission, detailing export volumes, greenhouse gas emissions associated with production, and quota utilization. Amendments to reports can be made within two months after the reporting quarter.

    Post-2025, carbon regulation will come into effect, gradually phasing out free quotas. Initially targeting direct emissions, the scope may later expand to other sectors at risk of carbon leakage, such as oil refining and chemical industries.

    Rodrigo Pizarro, Head of the OECD Climate Action Programme, explained the formation of carbon quotas pricing and emissions trading systems, highlighting that the introduction of the border carbon adjustment mechanism aims to address global environmental challenges.

    Kazakhstan aims to reduce net emissions to 328.4 million tons of carbon by 2030 and cut emissions by 25% compared to 1990 levels with international support. This necessitates reducing the share of coal generation from 65% to 40% and increasing the share of renewable energy sources from 10% to 24% by 2030, according to OECD experts.

    During the seminar, Ainur Amirbekova, Director of the International Integration Department at QazTrade, outlined the challenges and risks facing Kazakhstani industrialists in the coming years. The introduction of the EU carbon tax will directly impact the cost of export goods and their competitiveness, potentially closing off certain markets. Thus, companies should begin decarbonization efforts and transition to alternative technologies promptly.

    European Commission experts, in collaboration with QazTrade, are prepared to continue training exporters, provide analytical support, facilitate negotiations, and adapt export strategies considering ecological measures.

  • Report Urges Increased Circularity in EU’s Critical Raw Materials Market

    Report Urges Increased Circularity in EU’s Critical Raw Materials Market

    A report unveiled by CLG Europe’s Materials & Products Taskforce and the Wuppertal Institute underscores the imperative for heightened circularity within the European Union’s critical raw materials sector. Titled “Embracing Circularity: A Pathway for Strengthening the Critical Raw Materials Act,” the document directly addresses deficiencies in the EU’s Critical Raw Materials Act (CRMA) issued in March 2023.

    Circularity, the report argues, transcends mere recycling and underscores the necessity of effectively retaining materials within the system for extended periods. Critiquing the current CRMA proposal for its inadequate treatment of this aspect of circularity, the report focuses on aluminum (bauxite and magnesium), lithium, and rare earth elements (REE), drawing on evidence-based research and industry case studies to offer actionable recommendations to policymakers.

    Eliot Whittington, Chief Systems Change Officer at CISL, accentuated the potential of a more circular economy in Europe to simultaneously tackle challenges related to key materials and climate change. The report posits that embracing circularity during CRMA negotiations could accelerate the region’s progression toward climate neutrality and strategic autonomy.

    Integral to the green transition, the demand for raw materials profoundly affects the manufacturing of solar panels, wind turbines, and electric vehicles. With 24 materials listed in the CRMA imported from China and concerns regarding the environmental and societal ramifications of domestic mining, the report stresses the EU’s strategic autonomy.

    Advocating for a shift toward a reuse model, the report proposes that a circular economy in the EU could fortify the security of supply for critical raw materials. Prof. Dr. Manfred Fischedick, President and Scientific Managing Director of the Wuppertal Institute, champions a circular economy as a more sustainable alternative to mitigate environmental impact.

    The report’s recommendations encompass a more comprehensive circular approach within the CRMA, advocating for flexibility, forward-looking infrastructure, a coherent European Industrial Strategy, sustainable supply chains, and incentives for green technologies.

  • The geopolitical race for critical raw materials in the green transition era

    The geopolitical race for critical raw materials in the green transition era

    The geopolitical race for critical raw materials in the green transition era has emphasized the critical importance of securing raw materials for the green transition, recognizing the challenges it faces in competition with China. However, convincing companies to prioritize geopolitical concerns over market dynamics presents a significant hurdle. While electric vehicles offer a cleaner alternative to fossil fuel vehicles, their production involves a considerable amount of materials. Compared to conventional vehicles, electric cars require a much larger quantity of minerals, such as copper and manganese. The increasing adoption of clean energy technologies, especially electric vehicles, has led to a surge in demand for critical raw materials (CRMs). This heightened demand underscores the need for a stable supply chain to support Europe’s transition to green technologies. The European Union identifies certain materials as “critical raw materials,” crucial for various sectors beyond clean energy, including digitalization and defense. However, dependence on external sources, particularly China, raises concerns about supply chain security. China’s dominance in processing many CRMs, despite not being rich in these resources, poses challenges for the EU. Chinese mining companies have made significant investments overseas, controlling key mining operations in regions like the Democratic Republic of Congo and Indonesia. In response to these challenges, the EU has implemented initiatives such as the European Critical Raw Materials Act (CRMA) and strategic partnerships with producer countries. These efforts aim to secure the EU’s CRM supply while promoting sustainable development in partner nations. The CRMA emphasizes supply chain security but also faces criticism for prioritizing mining projects over sustainability. Achieving a balance between security and sustainability is crucial for ensuring a resilient supply chain. Despite the EU’s emphasis on strategic partnerships and free trade agreements, challenges remain in translating rhetoric into action. Building domestic supply chains for green energy technologies requires significant investment and private sector involvement. However, crashing prices of key minerals like lithium and cobalt have stalled Western investments in new mines. Chinese companies, benefiting from state support, are better positioned to weather market fluctuations. The EU’s approach to competing with China in the CRM sector must address these challenges effectively. Balancing economic interests, sustainability goals, and supply chain security will be essential for the EU to establish resilient CRM supply chains and maintain its competitiveness in the global market.

  • Newly created Critical Metals on track to construct EU’s first battery-grade lithium mine

    Newly created Critical Metals on track to construct EU’s first battery-grade lithium mine

    The debut of Critical Metals Corp (Nasdaq: CRML) on the Nasdaq, resulting from the merger between European Lithium (ASX: EUR) and Sizzle Acquisition Corp, experienced significant volatility. While Sizzle stock surged by 120% in after-hours trading on Tuesday, Critical Metals’ debut on Wednesday saw a 38% decline. However, by midday on Friday, CRML had rebounded, showing a gain of over 10%.

    Despite the initial turbulence, Critical Metals retains a significant stake in the Wolfsberg lithium project in Carinthia, Austria, valued at $1.2 billion. This project is poised to become the EU’s sole battery-grade lithium mine by 2027, according to Tony Sage, the executive chairman of Critical Metals.

    Sage remains optimistic despite the fluctuating share prices and current lows in lithium prices. The company has secured supply agreements with BMW and has partnered with Obeikan Investment Group to construct a lithium hydroxide plant in Saudi Arabia, a venture expected to be finalized by the end of March.

    Looking ahead, Sage is considering rare earths and uranium projects, both brownfield and greenfield, within the EU. European Lithium already holds a 7.5% stake in the Tanbreez rare earth project in Greenland, one of the largest rare earth projects globally.

    Critical Metals aims to supply BMW by 2027, following the completion of construction at Wolfsberg. Sage anticipates a favorable market environment at that time, as demand for lithium is expected to increase, potentially driving prices up.

    The construction of the hydroxide plant may prove to be more cost-effective than initially projected, with improved operational expenditure (OPEX) numbers compared to the original feasibility study for Wolfsberg conducted in 2023.

    Wolfsberg enjoys perpetual permits as long as work continues, positioning it as a key player in the EU’s lithium production landscape. This is particularly significant given the EU’s initiative to reduce dependence on China for critical raw materials.

    While some lithium projects in Europe have faced setbacks, such as Rio Tinto’s Jadar lithium project in Serbia, Critical Metals remains optimistic about its prospects, buoyed by the support of the Austrian government and the stability of its permits.

    In summary, despite initial market volatility and challenges faced by other projects, Critical Metals Corp is poised to play a pivotal role in Europe’s lithium supply chain, driven by the growing demand for lithium-ion batteries in the electric vehicle sector and the EU’s strategic objectives.

  • EU, US to align global minerals push against China’s supply grip

    EU, US to align global minerals push against China’s supply grip

    The US and the European Union are in talks to merge a core area of their efforts to engage suppliers of critical minerals in resource-rich nations, seeking to streamline their push against China’s dominance in materials key for future technologies.

    The aim is to combine the EU’s high-level policy approach with the US focus on specific projects, according to people familiar with the discussions.

    Specifically, the move would merge the EU’s critical raw materials club concept with the Biden administration’s flagship Minerals Security Partnership. It comes after the EU delayed plans to launch its own program in Dubai last year at the COP 28 climate summit, said the people, who asked not to be identified describing internal policy discussions.

    The new initiative, known broadly as a “minerals security partnership forum,” would align outreach efforts to buyers in developed countries and resource-rich nations to cooperate on projects and policies, said the people.

    As part of their broader economic security strategies, Washington and Brussels are seeking to counter China’s domination of the supply chain for so-called critical minerals, a broad term that includes inputs for electrical vehicles and other green energy technologies.

    Key to their combined efforts is working with resource-rich nations to develop standards on investment, trade, research and environmental issues that the US and EU see as an alternative to working with China.

    The allies, who’ve identified more than a dozen potential projects, have taken on a daunting challenge. The lengthy and expensive process of developing mining or refining projects means Beijing’s dominance will likely continue for decades. And US officials have conceded it’s impossible to fully replace China.

    US and EU officials aim to reach an agreement later this month and officially launch the project in March, according to one of the people. They will discuss the plan at the Munich Security Conference in Germany next week, said a separate person.

    The EU and the US are discussing how to optimize their efforts in fostering international cooperation on critical raw materials, Olof Gill, a spokesperson for the European Commission, said in a response to questions, adding that an important aspect of these talks is to find “the best synergies” between the EU’s critical raw materials club and other international activities.

    A US State Department official, who asked not to be identified discussing internal matters, said the two sides believe separate outreach plans to resource-rich nations duplicated efforts and risked creating confusion. They also want to ensure alignment on the broader goal of reducing the West’s dependence on China for the production and processing of many critical minerals like lithium, manganese and cobalt, and properly coordinate mobilizing state finances and private companies, the official said.

    The EU was already a part of the US-led minerals security partnership alongside Australia, Canada, Finland, France, Germany, India, Italy, Japan, South Korea, the UK and others, which aims to funnel foreign investment into the green energy sector.

    The EU has also signed its own minerals pacts with several countries, including the Democratic Republic of Congo, which supplies about 70% of the world’s supply of cobalt, and Zambia.

    As well, Central Asian members of the C5+1 group — which includes Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan — have also expressed interest in the minerals security partnership, the US State Department official said.

    Separate EU-US talks on a bilateral critical minerals agreement remain stalled over labor rights and concerns over the feasibility of adopting a trade pact in an election year.

    US officials, who have already struck a bilateral deal with Japan, have wanted to kick-start new mining and processing projects by acting as a bridge between private companies seeking raw materials and developing nations that have relied in recent years mainly on China for resource investments.