How is Europe's policy positioning itself in regards to the mining industry in the current context of the world?
Since the 1960's, Europe has gradually exported its mining industry (and the collateral environmental impact) to different parts of the world and started to import raw materials. However, as of last fall, we saw a paradigm shift evolving on the background of the energy crisis, and the subsequent realization that we need to secure critical raw materials in order to achieve the green transition that we are now envisioning. Of the total 30% metals and minerals used in Europe, we only source roughly 3% so, at the moment, we are heavily relying on imports, which is a delicate position to be in these days. Exploration is a risky business and as all the capital has been spread across other hubs around the world, Europe is now lacking the financial power to instantly restart its mining industry. On top of these, we also have different layers of rules and regulations that make it difficult to conduct drilling activities. Luckily, the Critical Raw Material Act recognizes this problem and leads the member states to pursue the whole environmental permit process within 24 months for special deposits of critical materials. This is a first important step in overcoming the old beliefs that translate into a resistance towards mining activities. At Euromines, our purpose is to advocate for the mining sector within the EU, and to represent national associations and mining companies in relation with various Directorates-General of the European Commission and the Parliament.
How dependent is Europe on China when it comes to critical minerals and how can we address the concerning gap between supply and demand?
At this point in time, we are extremely dependent, the mining volume coming from China being 85%, and the processing percentage more than 90%. Today, Europe produces 15 million cars annually, out of which 4,5 million are sold within the EU, so electrifying the entire fleet of new cars by 2035 is going to be a hard nut to crack considering that a performant electric motor uses 2 kilograms of carbonate magnets. In addition, we are producing 30% of the global wind turbines which, again, use a lot of critical metals.
We must realize that Europe will probably never be self-sufficient, and we will remain dependent on import, trade, and recycling. Still, we should be able to control the level of dependency, and the fact that sourcing materials went from not being an issue to ranking high on the agenda of many manufacturers is a positive signal.
Consolidating this recent epiphany with the Carbon Border Adjustment Tax - that penalizes manufacturers who do not import green materials - might be a good wake up call for the entire Union.
When all the predictions say we will need all this investment into mining, why is it so complicated to inject funds in this sector?
Unfortunately, our legacy points towards a complicated process to get access both to social acceptance and to environmental permits that are sustainable. Today, we are seeing this as the main threshold that Europe needs to pass in order to reconnect with its mining tradition. From a business perspective, we need to see feasible projects that have made the cut, and can be leveraged as fruitful examples of what we could achieve in this space.
As Europe starts to reactivate its mining industry, what are the main things we can look forward to in the coming years?
Even if we have a small mining industry within Europe, mainly in the Scandinavian countries, the Iberian Peninsula, and Poland, processes, methodologies, and equipment are definitely a net advantage. As they have continued to develop even after the mining sector has lagged behind, these can be the basis of a powerful development and innovation culture within the mining industry. All future plans depend on how legislation will be adopted in the coming years. One of the effects of 40 years of exporting industry and importing raw materials is that we have extremely complicated environmental permitting processes, and finding a workaround is no easy task. But with great effort and enough time, we hope that we will be able to trigger the successful revival of the mining industry in Europe.
