MINEX Forum

Tag: European mining

  • Evaluating the Impact of the Critical Raw Materials Act on European Mining Projects: Successes and Setbacks

    Evaluating the Impact of the Critical Raw Materials Act on European Mining Projects: Successes and Setbacks

    Since the implementation of the Critical Raw Materials Act (CRMA) in May 2024, the European Union has aimed to bolster its domestic mining capabilities by designating 60 Strategic Projects and promising expedited permitting processes. However, five years into this initiative, the reality of project development in Europe reveals a stark contrast to the ambitious policy goals. While a few projects have successfully transitioned from planning to production, many others remain mired in legal disputes, financial challenges, or have been abandoned altogether. This article examines the factors influencing the success or failure of various mining projects across Europe, highlighting that the issues at play extend far beyond permitting delays.

    Among the projects that have made significant progress, Eldorado Gold’s Skouries copper-gold project in Greece is nearing completion, with first concentrate expected by the third quarter of 2026. Similarly, Sibanye-Stillwater’s Keliber project in Finland has become Europe’s first fully integrated lithium operation, producing lithium hydroxide locally, which has garnered support from local communities and regulators. In the Czech Republic, the Cínovec lithium project, backed by state aid, is on track for commissioning around 2031, while Sweden’s Leading Edge Materials has secured a mining lease for its Norra Kärr rare earth project after overcoming a decade of legal hurdles.

    However, the article also sheds light on notable failures. Rio Tinto’s Jadar lithium project in Serbia faced mass protests and was ultimately placed on care and maintenance due to political pressures, illustrating how local opposition can derail even strategically designated projects. Similarly, Slovakia’s Trojárová antimony project was cancelled on environmental grounds, and Portugal’s Barroso lithium project is embroiled in legal challenges that threaten its future.

    The article emphasises that successful projects often share common characteristics: they tend to involve existing infrastructure, local processing, and strong financial backing from state or state-affiliated entities. Conversely, projects that have stalled or failed frequently encounter issues related to financing, market volatility, or community opposition rather than permitting alone. This insight underscores the need for a comprehensive approach to mining project development that considers geological risk, financing, and community engagement as integral components of the process.

    As Europe continues to navigate its mining ambitions, the lessons learned from these projects will be crucial in shaping future policies and strategies. The upcoming MINEX Europe 2026 forum will further explore these themes, focusing on the real challenges facing the mining industry and the practical steps needed to enhance project viability in the region.

  • Investors glimpse opportunity in Europe’s unloved mining shares

    Investors glimpse opportunity in Europe’s unloved mining shares

    Investors are beginning to recognize the potential in European mining shares as China’s gradual economic stimulus paves the way for a recovery in this overlooked sector. The STOXX Europe 600 mining index has experienced a decline of 15% this year, making it the worst-performing sector in the region. In comparison, the real estate sector has seen a 4.5% drop, while the retail index has shown a remarkable 27% increase.

    The metals and mining sector is often seen as a means for European equity investors to gain exposure to China, given its status as the world’s largest consumer of commodities. Consequently, as China’s growth expectations have declined, so too has the sector. The second-largest economy has faced challenges due to significant debt resulting from decades of infrastructure investments and a slowdown in the property market. Analysts predict that China’s economy will only grow by 5% this year, marking the slowest rate since 1990, excluding the years affected by the COVID-19 pandemic.

    However, in recent weeks, Beijing has implemented targeted measures to support key sectors of its economy, resulting in an upturn for the mining sector, which had reached its lowest point in 31 months. Over the past month, the mining index has risen by nearly 10%, while the broader STOXX 600 has only experienced a 2.5% gain.

    Nathan Sweeney, Chief Investment Officer of Multi-Asset at Marlborough Investment Management, describes China’s stimulus efforts as a gradual process, likening it to the construction of a wall, brick by brick. Eventually, people will realize that the wall has been built, even if it hasn’t been erected all at once.

    China has recently relaxed regulations surrounding home purchases and borrowing, as well as reduced key interest rates. Additionally, there are new tax relief measures for small businesses and private investments in certain infrastructure sectors. Sweeney believes that this diverse range of measures could serve as a catalyst for a turnaround in the metals and mining sector.

    The STOXX basic resources index currently trades at a discount of over 20% compared to the STOXX 600. Miners have a 12-month forward price-to-earnings ratio of 9.8, while the market ratio stands at 12.3, according to LSEG Datastream.

    This year, the shares of industry giants such as Glencore and Boliden have experienced significant declines of over 20%, while Anglo American has seen a 30% drop. In contrast, the pan-European STOXX 600 benchmark has risen by 7.5%.

    Copper and iron ore have fared better, with three-month copper on the London Metal Exchange remaining flat at $8,380 per tonne, and front-month Singapore iron ore futures showing an almost 9% increase.

    Considering China’s substantial influence in the commodities market, analysts expect some of the resilience in copper and iron ore demand to eventually translate into mining stocks. Morningstar estimates that China accounts for over 50% of refined copper demand and approximately 70% of the seaborne iron ore trade.

    Peter Mallin-Jones, a mining analyst at UK investment bank Peel Hunt, highlights the global energy transition as a significant factor that could drive increased demand for base metals. As economies move towards decarbonization, fast-growing nations like India, Indonesia, Malaysia, and Nigeria may contribute to this surge in demand. Copper, in particular, plays a crucial role in the electric and electronic industries, as well as in upgrading power grids, constructing solar farms, wind turbines, and electric vehicles.

    The United States and China are expected to add record amounts of solar production capacity this year, with an additional 32 gigawatts and between 95 and 120 gigawatts, respectively. This surge in solar production will significantly support the demand for copper and, to some extent, aluminium.

    Daniel Major, a metals and mining analyst at UBS, does not anticipate the same level of commodities demand explosion as seen after the global financial crisis in 2008. While he acknowledges that measures have been taken to stabilize aggregate commodities demand, he does not anticipate a strong rebound. Major predicts that the demand outlook for iron ore will deteriorate alongside a slower global economy, while copper and aluminium are likely to benefit from the renewables boom.

    UBS has issued ‘sell’ ratings on diversified miners Rio Tinto and BHP Group. Major prefers companies with more direct exposure to copper, such as Antofagasta, Poland’s KGHM, and copper recycler Aurubis, all of which have experienced declines of less than 12% this year, relatively outperforming diversified miners like Glencore, Rio Tinto, and Anglo American, which have seen declines ranging from 14% to 35%.

    Marlborough Investment Management’s Sweeney believes that the sector now appears attractive, with much of the negative news already reflected in the price.