European Commission Announces A New Legislative Proposal: The Critical Raw Material Act
Originally posted on Saharaprospectors.wordpress.com
European Commission President Ursula von der Leyen announced a new legislative proposal, the Critical Raw Material Act, to tackle the evolving dependency on China when it comes to raw materials and ensure more resilient supply chains.
The new legislative proposal, the critical raw materials act, seeks to tackle the evolving dependency on China when it comes to raw materials and ensure more resilient supply chains.
The proposal was announced as part of von der Leyen’s annual State of the Union address on Wednesday (14 September).
Lithium and rare earths will soon be more important than oil and gas.
” von der Leyen said during her announcement.
While the Commission already noted on several occasions that it is working on a legislative proposal to boost autonomy and resilience in the area of raw materials, it is the first time that the main pillars of the new approach were outlined.
“We must avoid becoming dependent again, as we did with oil and gas. […] We will identify strategic projects all along the supply chain, from extraction to refining, from processing to recycling. And we will build up strategic reserves where supply is at risk. This is why today I am announcing a European raw materials act ” she added.
“The not-so-good news is – one country dominates the market.”
Ursula von der Leyen
Many of the raw materials that the European Commission deems critical are primarily mined in China. This holds especially true for rare earths, where the supply risk is considered by the Commission to be the highest.
Around 90 % of these rare earth metals are currently mined by China – rendering the EU largely dependent on the Asian giant regarding this essential resource.
“Lithium and rare earths will soon be more important than oil and gas,“ von der Leyen emphasised.
On the heels of the green energy transition, the demand for critical raw materials is expected to rise dramatically. According to the European Commission, demand will increase by 500% by 2030. The World Bank projections also indicate that global demand for critical metals will increase by a factor of five by 2050.
However, the new Critical Raw Material Act will not only deal with securing supplies. It also aims to lessen the dependency on China when it comes to refining raw materials.
Lithium Rush
A case in point is lithium , which is a key battery metal and thus essential for the green energy transition. While China accounts for only around 9% of the globally mined lithium, it refines 60% of battery grade concentrates needed to produce battery packs for the electric vehicle manufacturers, leaving the EU largely dependent on China even in areas where there are a multitude of suppliers of the raw material itself.
Need For New Mines
Africa is the new frontier for critical raw materials needed for the green energy transition and China is way ahead of the west in securing vital and huge prospects in Africa.
More than 300 new mines could need to be built over the next decade to meet the demand for electric vehicle and energy storage batteries, according to a Benchmark minerals intelligence forecast.
At least 384 new mines for graphite, lithium, nickel and cobalt are required to meet demand by 2035, based on average mine sizes in each industry, according to Benchmark. Taking into account recycling of raw materials, the number is around 336 mines.
The data highlights the height of the raw material challenge facing global automakers as they look to scale up production of electric vehicles this decade. Demand for lithium ion batteries is set to grow six-fold by 2032, according to Benchmark.
Conclusion
The new European critical raw materials act may just be that wake up call Europe needs to catch up in the global lithium rush!
