In order to reduce reliance on China (CCP), an organization funded by the European Union has stated that Europe needs a system for independently pricing key minerals necessary for energy transition.
According to Reuters on July 15th, Bernd Schaefer, CEO of the EIT RawMaterials company, said last week, “Europe should have a platform for critical materials, which needs a pricing mechanism reflecting the supply and demand situation in Europe.”
Some companies have mentioned that materials such as lithium, cobalt, and rare earths are oversupplied, leading to weak prices that hinder cash flow for Western startups, making it challenging for them to compete with Chinese companies.
Schaefer, interviewed during the World Materials Forum in Paris, stated, “Sometimes, a single administrative decision by China (CCP) can change the pricing direction, thus undermining all assumptions investors have made about raw materials. This situation needs to change.”
According to an analysis by the European Union, China produces over half of the world’s lithium, cobalt, manganese, and other battery metals. As for rare earth elements, Chinese companies are responsible for 84% of the mineral supply and 100% of refining production.
The EIT RawMaterials company leads an alliance comprising over 300 companies, academia, and other stakeholders in the industry to help implement a plan aimed at providing the necessary raw materials to achieve the EU’s 2050 net-zero greenhouse gas emissions goal.
The “EU Critical Raw Materials Act,” which came into effect in May this year, sets goals for the EU group to mine, recycle, and process minerals including lithium and copper by 2030, ensuring a secure and sustainable supply of critical raw materials for the EU.
Schaefer emphasized that as a neutral, apolitical institution, the EIT RawMaterials division can play a pivotal role in driving the necessary changes.
Last month, Rare Earths Norway announced the discovery of the largest known high-value rare earth element deposit in Europe. This discovery holds significant importance for reducing Europe’s reliance on China in critical mineral resources.
During a press conference on June 6th, the company announced that the Fen Carbonatite Complex in southern Norway contains Europe’s largest rare earth element deposit. It is estimated that the total rare earth oxide quantity reaches 8.8 million tons, with reasonable prospects for economic extraction. Among these, an estimated 1.5 million tons of rare earths related to magnets could be used for electric vehicles and wind turbine generators. Considering supply chain risks, the EU sees these metals as the most critical raw materials.
One of the objectives of the EU’s “Critical Raw Materials Act” is to meet at least 10% of the EU’s annual rare earth demand by 2030. Rare Earths Norway expressed its hope to contribute towards this goal.
Schaefer also called for the establishment of an exploration fund to promote the extraction of critical minerals in Europe.
“This shouldn’t just be a few million euros, it should be in the billions, it must be a big number.”