This article examines the European Union’s strategic approach to addressing the challenges in securing a sustainable and resilient supply of critical minerals vital for green technologies.
Context and Challenges
Europe is confronted with the complex task of onshoring supply chains for critical minerals, diversifying its global sources, and ensuring sustainability in procurement practices. Despite efforts to maximize local extraction, refining, and recycling of minerals like copper and lithium, a significant portion will still need to be imported. The challenge lies in sourcing these minerals from a variety of markets while adhering to stringent social and environmental standards.
Current Supply Concentration
A notable challenge is the concentrated nature of the supply of critical raw materials (CRM) from third countries. For example, China dominates the supply of processed rare earth elements, while Chile and the Democratic Republic of Congo are major suppliers of lithium and cobalt, respectively. Additionally, geopolitical factors such as resource nationalism and export restrictions in resource-rich countries pose further challenges.
EU’s Strategic Partnerships Approach
To mitigate these risks, the EU has initiated Strategic Partnerships with various countries. Memoranda of Understanding have been signed with nations like Canada, Ukraine, Namibia, Kazakhstan, Argentina, Chile, Zambia, and the Democratic Republic of Congo. These agreements aim to integrate value chains, foster collaborative projects, and encourage research and development, all within the framework of strict environmental, social, and governance standards.
Europe’s Catch-Up Effort
Despite significant investments by China in global minerals projects, the EU is scaling up its strategic partnerships. These partnerships are seen as essential for securing Europe’s supply of critical minerals, with a focus on supporting green industry plans in resource-rich countries. This involves technology transfer, skills development, and responsible mining and processing practices.
Recommended Actions for the EU
For these partnerships to be successful, the EU needs to:
- Cultivate more strategic partnerships, prioritizing critical minerals and adhering to high social and environmental criteria.
- Develop green industrial value chains and responsible sourcing practices in partner countries, including local processing, manufacturing, technology transfer, and workforce upskilling.
- Establish a robust funding framework, leveraging the Global Gateway initiative and a dedicated CRM fund to financially support these projects.
- Engage EU companies in long-term agreements and provide support with technology and skills expertise.
Conclusion
Addressing the challenges in securing sustainable mineral supply chains requires a collaborative and global approach. Harmonizing standards, ensuring enforceability, and avoiding fragmentation of initiatives are key to the success of the EU’s strategic partnerships.
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