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A Look Across the Pond: Material Inputs for Europe’s Quest for “Strategic Autonomy”

It’s not exactly news to followers of ARPN that the global green energy transition will require vast amounts of critical minerals, however, against the backdrop of the raised geopolitical stakes in light of Russia’s war on Ukraine and rising resource nationalism in the southern hemisphere, new figures released by Belgium’s KU Leuven University underscore the urgency for stakeholders to act:

new report commissioned by European industry group Eurometaux, finds that “[t]he global energy transition is progressing faster than the mining project pipeline, with copper, cobalt, lithium, nickel, and rare earths all at risk of a disruptive demand pull between now and 2035,”

and that “meeting the European Union’s Green Deal goal of climate neutrality by 2050 will require 35 times more lithium and 7 to 26 times the amount of rare earth metals compared to Europe’s current use.”

For other metals and minerals deemed essential for renewable energy technology, the KU paper estimates that the transition “will also require 30% more aluminum than what is employed today in the continent, as well as 35% more copper, 45% more silicon, 100% more nickel and 330% more cobalt.”

While the KU Leuven University authors acknowledge the role of recycling and even argue that, provided proper investments are made and bottlenecks are appropriately addressed,  40-75% of Europe’s clean energy metal needs could be met through local recycling by 2050, critical shortages could arise in the next 15 years.

Until the loop is closed, the European Green Deal will require more inner-European mining and refining.  The catch, as noted by Mikael Staffas, Eurometaux president and CEO of Boliden, a Swedish metals group, is that the planning, permitting and construction process for a new mine requires 15 years – a challenge that sounds all too familiar to observers on this side of the Atlantic.

The challenge was already immense before Russia invaded Ukraine earlier this spring, but, as Reuters’s Andy Home points out in his latest piece on the issue, associated disruptions to global supply chains massively complicate “Europe’s race to achieve what it calls ‘strategic autonomy.’”

Pivoting away from Russia and China as suppliers is the order of the day, but, as Home outlines, “Europe’s mineral ambitions risk being frustrated by both a lack of coherent policy framework to stimulate domestic supply and a rapidly-changing global landscape where everyone is trying to secure enough electric vehicle metals such as lithium, cobalt and nickel.”

Home believes the European Union is in need of an “accelerator” – and it could be informed by the Biden Administration’s recent invoking of the Defense Production Act (DPA) via Presidential Determination to jump-start U.S. domestic critical mineral supply chains.

Home cites Kerstin Jorna, director general of the European Commission’s GROW department who indicated that a critical mineral-focused follow-up to the European Commission’s Chip Act from February of this year, which includes financing and other measures to reduce European overreliance on overseas suppliers of semiconductors, is actively being worked on and is coming “soon.”

To Home, who has followed the critical minerals challenge closely, “[i]t needs to,” because “Europe’s struggling metals sector desperately needs similar messaging and a way of punching through the tangle of Commission and national regulations that is actively impeding more investment in the metals sector.”

Home is on to something, and U.S. stakeholders should take note.  The invoking of the DPA may serve as the accelerator on the messaging front when it comes to strengthening U.S. critical mineral supply chains – but what is equally important is “punching through the tangle of (…) regulations that is actively impeding more investment in the metals sector,” an area in which the U.S. – just like its transatlantic partner — still has its work cut out.