Here’s why Europe needs to revive its mining sector

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Europe’s mining sector has continued to decline over recent decades due to a variety of factors. At the beginning of the last century, Europe accounted for about 40% of the world’s mining production. Now it’s down to 3%.

China’s growing dominance in battery and rare earth mineral production and supply chains poses an ongoing threat to Europe. This is because China has contributed significantly to China’s electric vehicle sector, making the continent, and indeed the rest of the world, highly dependent on China in these sectors. metals and minerals.

Russia’s full-scale invasion of Ukraine triggers massive EU sanctions on Russian oil and gas, policymakers realize how dependent the EU is on Moscow for energy and find more diverse supplier countries I decided to run hard for this purpose.

The European Commission therefore now wants to avoid a similar situation with lithium and other rare earth minerals, which are essential to the green transition. It is therefore more important than ever to revive Europe’s mining sector.

European Commission President Ursula von der Leyen said when announcing the European Critical Materials Act in her 2022 State of the Union address: “As war intensifies on European soil, Never before has this Congress debated the nature of our alliance.

“Lithium and rare earths will soon become more important than oil and gas. Demand for rare earths alone will increase fivefold by 2030,” she said. “We must avoid becoming dependent on it again, as we did with oil and gas.”

The Critical Ingredients Act covers 30 raw materials that the European Union has classified as critical due to supply risk and economic importance.

Why has Europe’s mining sector been in decline over the years?

Europe’s mining sector has been in decline for the past few decades, mainly due to a decline in coal mining, especially as the continent started moving towards more sustainable energy sources. Poland, Germany, Ukraine and the Czech Republic are traditionally some of Europe’s largest coal producers.

However, since 2012, coal electricity generation in the EU has fallen by around a third, leading to the closure of some unnecessary power plants and coal mines.

According to the European Commission, EU hard coal production in 2022 will be around 55 million tonnes, down 80% compared to 1990 levels.

As the green transition progresses, more EU investments are being directed towards green projects and infrastructure, such as wind turbines and solar panels. Meanwhile, investment in fossil fuels by governments and private companies has declined significantly.

The coronavirus pandemic and Russia’s war in Ukraine have also exacerbated the energy crisis in Europe. This led to the closure of several smelters, negatively impacting energy-intensive metals such as aluminum and steel. This also reduced bauxite mining and alumina production in Europe.

According to the International Aluminum Association, alumina production in Europe, including Russia, will be approximately 6.5 million tons in 2023, down approximately 20.92% from 8.22 million tons in 2022.

Additionally, there is considerable complexity regarding mining licenses and approvals in Europe, and it can take more than 10 years to receive a mining permit.

This is several times longer than in countries such as China, and could also prevent mining companies from relocating to Europe or increasing investment in the continent’s mining sector.

Additionally, Europe has very strict environmental protection laws, and local residents strongly protest against new mines or the expansion of existing mines. Governments should proceed with caution when it comes to new mines, as some important metal and mineral deposits happen to be located near nature reserves or ecologically sensitive areas.

This has become even more difficult since Europe recently decided to foreground its 2030 net zero target. It is becoming increasingly difficult to justify approval of new mines and continued support for existing mines.

“Especially given the climate crisis and high rates of biodiversity loss, the priority should not simply be more extraction, more extraction,” said Michael Recoult, head of raw materials at the NGO PowerShift, according to Politico. No,” he said.

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How can Europe promote mining?

The Critical Materials Act is one of the most decisive pieces of legislation that Europe has rolled out over the past few years for the mining and production of domestic rare earth minerals.

Essentially, we aim to significantly reduce red tape and encourage innovation and the search for alternative materials.

This primarily includes a clearer and more stable framework for recycling and mining projects, as well as faster and easier licensing channels. Economic incentives and further support for small and medium-sized enterprises (SMEs) are also likely to be announced.

The law sets ambitious recycling targets and aims to reduce waste from the start. By doing so, it is hoped that the demand for new mines will be reduced.

One such recycling project is the EU-funded Susmagpro project. The project was implemented last year and primarily focuses on recycling rare earth magnets used in wind turbines, electronics and electric vehicle motors.

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The European Commission said the aim of the project was to “develop a recycling supply chain for rare earth magnets within the EU and demonstrate these new materials on a pilot scale in different application areas. We are importing iron.” – Than we manufacture boron magnets. ”

Furthermore, the continent will work towards establishing strategic partnerships with third countries. This could not only lead to significant foreign investment in Europe’s mining sector, but also foster knowledge sharing and attract highly talented and skilled foreign workers.

“This law is a blueprint for industrial policy for a safe and sustainable supply of raw materials in Europe,” Nicola Beer, Member of Parliament for Renew, said of the law.

“Targeted economic incentives provide certainty for private investors in project planning through a single point of contact for companies and a fast and simple approval process with clear deadlines for national authorities,” he said. ” he said. “This will boost mining, processing and recycling in Europe.”

Protests in countries such as Serbia, Spain, Sweden and Germany, in particular, are also likely to lead to more sustainable mining policies being introduced.

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As Politico reported, Julia Klinger, an assistant professor of geography at the University of Delaware, said of the environmental impact of mining projects: “I think we need to look more squarely at the long-term effects.”

“This idea that Europe becomes a climate-neutral continent by supplying its own critical raw materials is kind of doomed from the start unless we actually do our due diligence first,” she said. Stated.

But to meet climate goals and reduce dependence on other countries such as China, Europe may need to step up mining to tap into its own rare earth mineral reserves.

Risks of dependence on foreign metal and mineral supplies

In 1987, then-Chinese leader Deng Xiaoping said, “The Middle East has oil, and China has rare earths.”

This statement has proven to be rather appropriate, as China is currently the world leader in rare earth mineral production, accounting for approximately 60% of global production.

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“At the moment, if we want to produce rare earths in the EU, we would have to go through China (or at least Asia) for the conversion stage into magnets,” said Stéphane Boulle, head of the French Geological Survey. . Explore Europe.

He said: “There are zero plants in the EU that convert rare earth oxides into rare earth metals. Even if such projects are planned, this is a very important step.” “If I dumped 10,000 tons of neodymium oxide in your garden today, you wouldn’t know what to do with it.”

Europe’s increasing dependence on China for this critical mineral leaves the continent exposed to significant risks, including price volatility, supply disruptions and loss of competitiveness.

Furthermore, China can use its advantage in the rare earth mineral supply chain as a tool for geopolitical negotiations and retaliation. One example is China’s ban on rare earth mineral exports to Japan for about two months in 2010, citing disagreements over fishing.

Tensions between the EU and China have also gradually increased in recent months for various reasons. These include China’s continued support of Russia in its war against Ukraine, as well as its aggression against Taiwan.

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Additionally, an EU investigation into Chinese electric vehicles being imported into the continent, as well as concerns over data transparency and market access, could make matters worse.

If this situation worsens, it could become more difficult for Europe to access rare earth minerals from China in the future. Therefore, now may be the best time to increase domestic supply.