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.
Tag: EU
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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.
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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.
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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.
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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.
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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.
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EU Green Ambitions Under Siege Amid Red Sea Crisis, Russian Aluminium Ban Fears
The European Union has long positioned itself as a global champion of green energy and the world’s battle against climate change. No other region in the world has stricter environmental legislation or has done as much to promote renewable energy sources. Now, the EU’s commitment to the Green Deal is being rigorously tested in the wake of the Ukraine conflict and the anti-Russian sanctions it triggered, as well as the recent escalation in Israel and the Red Sea region.
These developments are already reshaping the continent’s approach to climate change, particularly in the context of its traditional reliance on Russian aluminium, widely considered one of the most environmentally friendly options in the European market, especially compared to its less green alternatives from Asian markets.
Despite geopolitical upheavals, most EU countries have actually intensified their renewable plans since 2020. The energy and COVID-19 crises, along with the war in Ukraine, have spurred the green transition in Europe rather than derailing it. EU countries’ climate policies demonstrate a significant shift towards renewable energy: it is now expected that 63% of EU electricity will be produced from renewables by 2030, up from 55% originally envisaged under the previous plan in 2019. This shift would mark a substantial decrease in EU fossil fuel-based power generation, projected to drop to 595 terawatt hours in 2030 from 1,069 TWh in 2021.
The ambitious green transition is not a one-way street for Europe, however, as the movement is facing a pan-European challenge. Countries like Italy, the United Kingdom and the Netherlands have shown signs of pushback against various EU initiatives aimed at greening the economy. This resistance, termed “greenlash,” is driven by factors ranging from economic pressures to political dynamics. Italy, for example, has sought to water down certain EU directives. In the Netherlands, the rise of the BBB party, opposing the government’s environmental policies, signifies growing discontent with the green agenda. At the same time, Britain’s recent fossil fuel projects have also raised questions about its commitment to climate goals.
With Europe on the brink of recession, it is increasingly hard to “sell” costly green initiatives to the dissatisfied voters who are already dealing with the daily pressures of inflation and rising geopolitical risks. The sanctions already imposed on Russia, historically one of Europe’s key trade partners, for its role in the Ukraine crisis have severely diminished bilateral commerce and to a large degree backfired against European producers and consumers.
While the Ukraine crisis is quickly approaching its 2-year mark, the new geopolitical hotspot in the Red Sea is adding additional pressure on the strained European economy. The halt of navigation in what is one of the world’s most important transportation routes, representing roughly 12 percent of global container traffic, means increased time (by adding about 10 days to trip duration if an alternate route around Africa is taken) and costs for consumers. For Europe this translates into higher import costs for such key industrial materials as aluminium, as well as for energy. Longer travel times also mean more environmental impact for EU-made products, undermining the continent’s green economy goals.
Russian aluminium, considered a greener option due to its lower carbon footprint, still plays a significant role in Europe’s industrial and environmental strategies. The potential sanctioning of Russian primary aluminium – long favored by some EU politicians and pundits despite strong economic risks – poses a significant dilemma amidst these crises. Due to high energy and labour costs, the EU’s own aluminium production is in steady decline and now accounts for only about 11 percent of its total demand.
Multiple sanctions introduced against the Russian economy have done nothing to force Russia to change its course on Ukraine. When considering whether to expand them to also include a ban on aluminium EU policymakers must be fully aware of the environmental impact of losing a key source of green aluminium that cannot be easily replaced.
This underscores the importance of strategic foresight in policymaking to ensure that Europe’s green ambitions remain robust and responsive to an ever-changing global landscape. As Europe navigates through these turbulent times, the balancing act between maintaining its green agenda and responding to geopolitical developments becomes more challenging. The decisions made in the coming months will not only shape Europe’s environmental policies but also reflect its resilience and adaptability in the face of global challenges.
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EU sets critical mineral goals, but faces struggle to hit them
The European Union (EU) has set targets to dig up, recycle and refine lithium, cobalt and other metals it needs for its green transition, but a shortage of new money, crippling energy costs and local opposition could put them beyond reach.
The bloc will likely need to find ways to trim demand, find substitute materials and forge partnerships that break China’s stranglehold on mineral supplies.
The Critical Raw Materials Act (CRMA), due to enter force in early 2024, says the bloc should mine 10%, recycle 25% and process 40% of its annual needs of 17 key raw materials by 2030.
The materials are essential for vehicle batteries, wind turbine magnets and other clean tech products the EU wants to manufacture. The CRMA aims to reduce the bloc’s reliance on China, which dominates global mineral processing and has already threatened EU supply with export curbs.
Studies forecast recycling will be limited until 2035-2040, when metals re-enter the market as scrap.
Researchers from Belgian university KU Leuven concluded in a 2022 report that the period to 2030 will be the most challenging for metal supply, highlighting risks for copper, lithium, nickel, cobalt and rare earth elements.
The CRMA aims to speed up granting of project permits, which for a mine should be within 27 months, from a potential 10 to 15 years now, but other obstacles remain.
Eurometaux, Europe’s association for non-ferrous metals, says Europe has potential, but needs cheaper energy and EU financing, pointing to funds on offer in the US, Canada or Japan.
The EU has loosened state aid rules and plans to spend €3-billion ($3.3-billion) to boost battery production, but the sums are dwarfed by the $369-billion of green subsidies in the US Inflation Reduction Act. A European Sovereignty Fund has been mooted, but since dropped.
Industry groups say prioritisation of US over EU projects by the likes of Nyrstar in gallium and germanium recovery and Jervois Cobalt in mining and refining highlights the gap.
Meanwhile, higher EU higher energy costs have forced widespread idling of electricity-intensive metal smelters – EU aluminium production fell 35% in 2022 and has dropped further this year.
EU has plans to reform its electricity market, but this will take time to guarantee affordable renewable energy.
In mining, repurposing some existing sites might yield critical raw materials that were considered to be waste, according to Lawrence Dechambenoit, global head of external affairs at Rio Tinto, the world’s second-largest mining company.
But for lithium, he said, Europe urgently needed new mines.
Eurometaux says identified projects could meet almost 40% of EU supply by 2030, but a number are uncertain.
These include Portugal, which has delayed auctioning of mining licences for battery-grade lithium and is now mired in a corruption scandal and Serbia, which revoked licences in 2022 for Rio Tinto’s $2.4-billion lithium project.
Nicola Beer, the German liberal who steered the CRMA through the European Parliament, is more confident on the three targets.
“I get calls from countries asking what they can do, which I take as a positive sign,” she said.
However, she also points to what she calls the “fourth leg of the chair” – innovation to minimise material use or find substitutes. As an example, she passes round a black disc made from wood that can serve as graphite in batteries.
One effective move would be a shift to more modest electric vehicles with smaller batteries. Julia Poliscanova, a senior director at campaign group Transport & Environment, says this could cut lithium and nickel demand by a quarter.
Niclas Poitiers, research fellow at Bruegel think-tank in Brussels, says Europe’s ultimate aim of being a clean tech leader may be better served sourcing minerals from reliable allies and concentrating on higher-end products such as batteries, rather than ‘on-shoring’ mineral production.
“The base of our wealth is that we focus in manufacturing the most value-added parts and we outsource the things that are not high value-added. And this is something that is very difficult to change,” he said.
The CRMA does stress a need to diversify imports.
The European Union has indeed signed multiple partnerships from Argentina to Zambia and hopes its 300 billion euro Global Gateway infrastructure investment scheme will entice resource-rich countries keen to diversify their economies and also reduce their own dependence on China.
“It’s a win-win proposition,” Poitiers said.
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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.
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The Critical Minerals to China, EU, and U.S. National Security
The Critical Minerals to China, EU, and U.S. Security
Over the last decade, minerals like nickel, copper, and lithium have been on these lists and deemed essential for clean technologies like EV batteries and solar and wind power.
This graphic uses IRENA and the U.S. Department of Energy data to identify which minerals are essential to China, the United States, and the European Union.
What are Critical Minerals?
There is no universally accepted definition of critical minerals. Countries and regions maintain lists that mirror current technology requirements and supply and demand dynamics, among other factors.
These lists are also constantly changing. For example, the EU’s first critical minerals list in 2011 featured only 14 raw materials. In contrast, the 2023 version identified 34 raw materials as critical.
One thing countries share, however, is the concern that a lack of minerals could slow down the energy transition.
With most countries committed to reducing greenhouse gas emissions, the total mineral demand from clean energy technologies is expected to double by 2040.
U.S. and EU Seek to Reduce Import Reliance on Critical Minerals
Ten materials feature on critical material lists of both the U.S., the EU, and China, including cobalt, lithium, graphite, and rare earths.
Despite having most of the same materials found in the U.S. or China’s list, the European list is the only one to include phosphate rock. The region has limited phosphate resources (only produced in Finland) and largely depends on imports of the material essential for manufacturing fertilizers.
Coking coal is also only on the EU list. The material is used in the manufacture of pig iron and steel. Production is currently dominated by China (58%), followed by Australia (17%), Russia (7%), and the U.S. (7%).
The U.S. has also sought to reduce its reliance on imports. Today, the country is 100% import-dependent on manganese and graphite and 76% on cobalt.
After decades of sourcing materials from other countries, the U.S. local production of raw materials has become extremely limited. For instance, there is only one operating nickel mine (primary) in the country, the Eagle Mine in Michigan. Likewise, the country only hosts one lithium source in Nevada, the Silver Peak Mine.
China’s Dominance
Despite being the world’s biggest carbon polluter, China is the largest producer of most of the world’s critical minerals for the green revolution.
China produces 60% of all rare earth elements used as components in high-technology devices, including smartphones and computers. The country also has a 13% share of the lithium production market. In addition, it refines around 35% of the world’s nickel, 58% of lithium, and 70% of cobalt.
Among some of the unique materials on China’s list is gold. Although gold is used on a smaller scale in technology, China has sought gold for economic and geopolitical factors, mainly to diversify its foreign exchange reserves, which rely heavily on the U.S. dollar.
Analysts estimate China has bought a record 400 tonnes of gold in recent years.
China has also slated uranium as a critical mineral. The Chinese government has stated it intends to become self-sufficient in nuclear power plant capacity and fuel production for those plants.
According to the World Nuclear Association, China aims to produce one-third of its uranium domestically.