Controversy surrounds the European Union’s recent agreement with Rwanda on the sustainability and traceability of strategic minerals, as critics, including “Insieme pace per il Congo” and seven other organizations, demand its annulment. Expressing concern, these groups, including the “Rete Pace per il Congo” Network, question the wisdom of engaging in such an accord with a country that allegedly acquires these minerals illegally from a neighboring state. The protocol agreement, signed on February 19th, faces objections from Cardinal Fridolin Ambongo Besungu and others who argue that Rwanda’s prominence in the tantalum mining sector is marred by the exploitation of wars and clandestine movements since 1996. Despite the EU’s assertion that the agreement aims to uphold legality and traceability standards, critics emphasize Rwanda’s questionable practices, accusing it of benefiting from conflicts in the Democratic Republic of Congo. The statement from the opposition cites the flow of valuable minerals, such as gold and coltan, from Congo to Rwanda through complicit border practices, leading to violence, displacement, and suffering. “Insieme per la Pace nel Congo” appeals to the European Union to reconsider the agreement, urging sanctions against Rwanda for its alleged involvement in the illegal trade of minerals. They emphasize the need for a fair and impartial approach to foster peaceful coexistence in the African Great Lakes region.
Tag: European Union
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EU’s First Battery-Grade Lithium Mine: Critical Metals Leads the Way
Critical Metals, a newly established company, is set to construct the European Union’s first battery-grade lithium mine, the Wolfsberg Lithium Project, located in Austria. The project is expected to become a significant source of battery-grade lithium concentrate, filling a critical gap in the European electric vehicle (EV) battery supply chain. The mine is uniquely positioned to capitalize on its location in the heart of the EV supply chain, minimizing environmental impact by repurposing a former Austrian government-constructed lithium mine containing a substantial amount of battery-grade lithium. Furthermore, European Lithium has entered into a Memorandum of Understanding (MOU) for a key customer arrangement with BMW AG, potentially creating one of the largest direct pre-pays from an original equipment manufacturer (OEM) in Europe’s lithium mining industry. A definitive feasibility study is expected in early 2023, aiming to supply lithium concentrate at a commercial scale and be economically viable.
The European Union has set targets to dig up, recycle, and refine lithium, cobalt, and other metals it needs for its green transition. However, the bloc faces challenges in achieving these goals due to a shortage of new money, high energy costs, and local opposition. The Critical Raw Materials Act (CRMA), due to enter force in early 2024, aims to reduce the EU’s reliance on China, which dominates global mineral processing and has already threatened EU supply with export curbs. The CRMA aims to speed up the granting of project permits, but other obstacles remain, such as the need for cheaper energy and EU financing.
Several European lithium mining and refining projects are poised to launch commercial operations next year, supported by a push among original equipment manufacturers (OEMs) to regionalize their battery supply chains and reduce dependence on imported material. Based on existing plans, Europe’s annual lithium processing capacity is set to reach approximately 650,000 mt/year by 2028, with more than 20 projects currently advancing their mining and refining operations toward full-scale commercial production. The growth of Europe’s domestic lithium industry comes amid growing concern about an impending global shortfall in the supply of graphite, copper, cobalt, and nickel.
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“Metinvest” sold more than half of its products in the EU
In the first half of 2023, the Mining and Metallurgical Group “Metinvest” sold 55% of its metallurgical and mining products in the countries of the European Union (EU). At the same time, 35% of this production was sold in Ukraine, 2% in MENA countries, 1% in CIS countries, and 7% in other regions. The total revenue amounted to $2.423 billion.
It is noted that sales of metallurgical products decreased by 33% in the first half of 2023 compared to the same period of the previous year. This was mainly due to the reduction in production volumes at Ukrainian metallurgical enterprises, as well as due to the decrease in average selling prices. However, this situation was partially offset by the increase in the volumes of billets, long products, and coke sales.
The positive dynamics for the first half of 2023 compared to the second half of 2022 is due to higher sales volumes of finished products, semi-finished products, and coke.
However, sales of iron ore products also decreased by 32% in the first half of 2023 compared to the first half of 2022, mainly due to falling iron ore prices and reduced shipments due to the blockade of Ukrainian ports. Nevertheless, this was partially offset by increased sales volumes of sinter and concentrate of coking coal.
The Metinvest Group consists of mining and metallurgical enterprises in Ukraine, Europe, and the United States, with the main shareholders being SCM Group and Smart-Holding. The managing company of the group is Metinvest Holding LLC.
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Teako Minerals announces strategic pivot with Norway as key focus
TEAKO MINERALS CORP. (the “Company” or “Teako“) announces that following a recent Norwegian parliament meeting and the various developments in mineral exploration in Fennoscandia in recent years, the Company has decided to pause exploration efforts in British Columbia, to primarily concentrate on Norway, while also maintaining a minor focus on Finland. The majority of the Company’s projects in British Columbia are in good standing for 2-3 years, allowing the Company the strategic flexibility to explore various alternatives, including the potential of partnering with other parties or selling the projects, as part of its ongoing commitment to maximizing shareholder value. Investors will be regularly informed of developments, ensuring transparency and continuous engagement with our valued stakeholders.
The primary targeted metals in Norway will be copper, cobalt, and base metals, as well as gold and rare earth minerals (or “REE”), while in Finland, the focus will be on gold.
The Rationale Behind the Pivot
Access to critical and battery metals is crucial to establishing a robust value chain in Europe and carrying out the green shift. Today, most of the battery metals, such as nickel, cobalt, and lithium, are produced outside Europe, often in countries with low ESG standards. The EU has introduced a goal that 10% of all critical minerals consumed in the EU in 2030 will need to be produced in the EU by 2030. This means that the production of battery metals within the EU must be dramatically increased to attain this goal.
Oil and gas have been the primary contributors to Norway’s recent sovereign wealth. However, in alignment with the green shift and rising commodity prices, the mineral exploration industry and Government are keen on reviving the mining and exploration sector, which became dormant in the 1970s due to low commodity prices and the discovery of oil and gas.
The bedrock in Norway is promising for discoveries of new occurrences of battery and critical metals with its rich history of mining copper, nickel, and cobalt. Only a handful of exploration companies have carried out systematic exploration since the late 1980s; however, multiple major mines are about to open/reopen very shortly, namely the REE mines of Engebø and Fensfelt, as well as the copper mine in Finnmark by Nussir.
Norway is currently also a world leader in renewable energy production, with an estimated 92% of the country’s energy supply being derived from hydroelectric plants and a further 6% from wind energy and other renewable sources.
More recently, the Company was invited to attend and contribute to an event at the Norwegian Parliament held on January 16, 2024. The event focussed on sustainable exploration and extraction of critical metals, bringing together a diverse group of experts and industry leaders to discuss establishing Norway’s pivotal role in the European battery and critical minerals supply chain.
The event surrounded a cross-political specialist seminar with representatives and advisors in the energy and environment committee, the finance committee, the industry committee, mining companies, politicians, and various organizations. The event was followed by a networking gathering where Teako and another Service Alliance partner, Kuniko Limited, and Norsk Bergindustri, met.
The Company would like to express its profound gratitude to the Norwegian Parliament for the opportunity to contribute to the discussions on the development of Norway’s critical mineral infrastructure. We also sincerely thank Norsk Bergindustri and our Service Alliance partner, Kuniko Limited, for hosting the networking gathering.
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Kazakhstan and the European Union are expanding opportunities for the development of the critical raw minerals sector
From October 25 to 26, 2023, Vice Minister of Industry and Construction of the Republic of Kazakhstan Iran Sharkhan and Chairman of the National Geological Survey JSC Erlan Galiyev took part in the Global Gateway forum in Brussels (Belgium).
The event, which focused on green energy, education and research, critical raw materials, transport corridors, healthcare manufacturing and digital infrastructure, was opened by European Commission President Ursula von der Leyen.
During the visit, the Kazakh delegation took part in a panel session dedicated to the problem of rare earth metals and discussed issues of joint cooperation with the parties. Also, I. Sharkhan and E. Galiyev held a number of bilateral meetings with the heads of European organizations.
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U.S, EU business groups push for steel deal, minerals drive at summit
The largest business federations in the United States and the European Union have jointly called upon leaders convening for a summit on Friday to swiftly resolve an ongoing dispute regarding the metals tariffs imposed during the Trump administration. Additionally, they emphasized the need for increased cooperation in the realm of critical minerals, which are vital for facilitating the green transition.
The U.S. Chamber of Commerce and BusinessEurope issued this call to action on Monday, in anticipation of President Joe Biden’s meeting with European Commission Chief Ursula von der Leyen and European Council President Charles Michel in Washington. The European Union aims to prevent the reinstatement of import tariffs on steel and aluminum, as imposed by former President Donald Trump, and to establish a mutually beneficial agreement that supports EU exporters of critical minerals to the United States.
Highlighting their concerns, the two business groups underscored the risks posed by protectionist policies, citing anemic economic growth and misguided narratives surrounding industrial decline. They cautioned that such policies could hinder innovation and impede prosperity. Consequently, the groups urged officials from both the EU and the U.S. to reach a lasting agreement that prevents any reimplementation of metals tariffs by the U.S., while also addressing the challenges posed by global excess capacity and carbon emissions in metals production.
Furthermore, the business federations stressed the importance of transatlantic collaboration with countries that possess significant reserves of critical minerals. This collaborative approach seeks to reduce reliance on any single country, particularly China, which currently holds a dominant position. In order to advance the green transition, the groups emphasized that global mining companies must substantially increase their production of critical minerals, such as lithium, cobalt, copper, nickel, and rare earths, by 500% over the next decade. This ambitious goal is crucial for driving the necessary advancements in sustainable technology.
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EU carbon price to hit €400 mark with 90% climate goal: analysts
In a display of strong commitment to ambitious climate policies, the European Union’s new climate commissioner, Wopke Hoekstra, has affirmed his support for a 90% reduction in net greenhouse gas emissions by 2040. This declaration, made during a Parliament hearing earlier this week, has garnered backing from the Parliament’s environment committee and has led to Hoekstra’s formal confirmation in his new role.
The 2040 target for greenhouse gas reductions will have a significant impact on the supply of CO2 allowances in the EU’s emissions trading scheme, which imposes limits on carbon emissions from large industrial emitters. Financial analysts predict that a 90% reduction target for 2040 will push EU carbon prices above €400 by that time, according to researchers at the London Stock Exchange Group (LSGE).
Currently, carbon prices on the EU ETS stand at €81 per tonne, reaching a peak of €100/t in February of this year. LSGE’s analysis suggests that with the current 2030 decarbonisation target of -55%, the EU’s carbon price is expected to rise to €160/t by the end of the decade. However, if the 90% decarbonisation target is met, the carbon price could soar to €400/t by 2040.
Paula VanLaningham, the director of LSEG Carbon Research, emphasizes that the €400/t price is not the cost of decarbonisation itself, but rather the potential cost faced by businesses that fail to decarbonize under the 90% scenario. Achieving the 90% target would result in near full-decarbonization across various industries, such as power, manufacturing, transportation, and construction.
The European Commission is set to present its 2040 climate target plan in early 2024. This proposal will undergo scrutiny and approval by EU member states and the European Parliament. Hoekstra assures that the Commission’s 2040 plan will be informed by the recommendations of the European Scientific Advisory Board on Climate Change, which supports a 90-95% target range. Hoekstra pledges to act in line with the Board’s advice and utilize all available instruments to facilitate the EU’s achievement of the minimum recommended target of 90% net reductions.
Maroš Šefčovič, the Slovak EU commissioner overseeing the coordination of Europe’s green policies, also backs the 90% target, emphasizing that it will provide clarity and predictability to economic actors and citizens. While the responses from Hoekstra and Šefčovič are not binding decisions, they indicate a clear direction from the commissioners on this issue. The European Union’s carbon market underwent significant reforms this year to align with the EU’s decarbonization objectives for 2030.
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U.S. optimistic it will reach critical minerals deal with EU
The United States expresses optimism regarding the possibility of reaching an agreement with the European Union (EU) that would enable critical minerals mined or processed in Europe to qualify for U.S. clean vehicle tax incentives. This encouraging statement was made by a senior U.S. official on Monday.
Negotiations between the transatlantic partners are underway to determine the eligibility of EU critical minerals, such as lithium and nickel, for green subsidies under the U.S. Inflation Reduction Act. This act specifically promotes products manufactured in North America. Jose Fernandez, the Under Secretary for Economic Growth, Energy, and the Environment at the State Department, shared during a briefing in Brussels that intense negotiations are being conducted.
Fernandez expressed hope and optimism, stating that negotiations are progressing well. Acknowledging the need for collaborative efforts, he expressed confidence in reaching an agreement between the United States and the European Union.
He also clarified that there are no plans to link the critical minerals agreement to the resolution of the separate transatlantic negotiations addressing U.S. import tariffs on EU steel. It is important to note that the United States has already signed a minerals agreement with Japan in March. Currently, both the EU and the United Kingdom are seeking similar agreements.
Additionally, Fernandez mentioned that he is engaging in discussions with EU officials to establish an agenda for the upcoming joint Trade and Technology Council, which the United States will host before the end of the year.
He emphasized that both sides are committed to establishing safeguards for artificial intelligence and moving beyond general statements to concrete actions. While there is no specific timetable for reaching an agreement, there is a shared understanding that it should occur sooner rather than later. Furthermore, both parties agree that any technological advancements should uphold democratic values, human rights, and individual freedoms.
The United States remains positive about the ongoing negotiations with the European Union, recognizing the importance of collaboration and the need to promote sustainable and innovative solutions.
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By 2030, EU may rely on China’s batteries as it did Russian energy
A paper prepared for EU leaders has raised concerns about the potential dependency of the European Union on China for lithium-ion batteries and fuel cells by 2030, similar to its past dependence on Russia for energy prior to the conflict in Ukraine. This issue will be a focal point of discussions on Europe’s economic security during the EU leaders’ meeting in Granada, Spain, on October 5th.
Given China’s increasing assertiveness and economic influence on the global stage, the leaders will evaluate the European Commission’s proposals to mitigate the risk of excessive reliance on China and explore diversification opportunities towards Africa and Latin America.
The paper emphasizes that due to the intermittent nature of renewable energy sources such as solar or wind, Europe must develop energy storage solutions to achieve its goal of net-zero carbon dioxide emissions by 2050. As a result, the demand for lithium-ion batteries, fuel cells, and electrolyzers is expected to surge between 10 and 30 times in the coming years, according to the paper prepared by the Spanish presidency of the EU.
While the EU holds a strong position in the intermediate and assembly stages of electrolyzer production, boasting over 50% of the global market share, it heavily relies on China for crucial components like fuel cells and lithium-ion batteries, particularly for electric vehicles.
Without implementing robust measures, the paper warns that by 2030, the European energy ecosystem could face a different but equally concerning dependence on China, akin to the dependency on Russia before the invasion of Ukraine.
Before the Russian invasion, the EU sourced over 40% of its total gas consumption, 27% of its oil imports, and 46% of its coal imports from Russia, according to the European Commission’s data. The abrupt cessation of energy purchases from Russia caused an energy price shock in the EU, leading to a surge in consumer inflation. This necessitated the European Central Bank to raise interest rates significantly, ultimately dampening economic growth.
However, the vulnerability of the EU extends beyond lithium-ion batteries and fuel cells. The paper highlights the potential for a similar scenario in the digital-tech sector, as the demand for digital devices such as sensors, drones, data servers, storage equipment, and data transmission networks is projected to rise sharply in the coming decade.
While the EU maintains a relatively strong position in certain aspects of the digital-tech sector, notable weaknesses exist in other areas, as stated in the document.
By 2030, this foreign dependency could severely hinder the productivity gains urgently required by the European industry and service sector. Furthermore, it could impede the modernization of agricultural systems necessary to address the challenges posed by climate change, the paper concludes.
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Poland proposes ban on Russian diamonds, LPG in new sanctions package
In a proposal brought forth on Monday, Poland has put forth suggestions for new European Union sanctions against Russia in light of its invasion of Ukraine. The proposal, obtained by Reuters, advocates for a ban on Russian diamonds and Liquid Petroleum Gas as part of the sanctions. Additionally, Poland calls for aligning the sanctions against Belarus with those against Moscow.
According to the proposal, Poland recommends prohibiting the importation of Russian diamonds, which accounted for a substantial $4.5 billion in revenue for the Russian budget in 2021. The document further suggests implementing individual sanctions specifically targeting the Russian diamond company, Alrosa (ALRS.MM). The Polish paper highlights that Alrosa has been providing support to the Russian military forces and facilitating their engagement in the war in Ukraine, both directly and indirectly, over an extended period.
The proposal also emphasizes the need for the European Union to expand the scope of sanctions beyond diamonds and Liquid Petroleum Gas. Poland suggests that the EU should impose a ban on Information and Communication Technology (ICT) services provided to entities from Russia. This would encompass computer software, cybersecurity services, and other ICT/IT services. By restricting these services, the EU would exert additional pressure on Russia and send a clear message regarding its actions.
It is worth noting that the European Union has already implemented eleven sanctions packages against Russia since the invasion of Ukraine in February 2022. The proposal from Poland seeks to further strengthen these measures and ensure a coordinated approach in dealing with both Russia and Belarus.
As discussions continue within the European Union, the outcome of this proposal remains to be seen. However, the proactive stance taken by Poland underscores the commitment of member states to address the ongoing crisis and hold those responsible accountable for their actions.