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As China, Europe and the US race to secure the supply of critical raw materials for the energy transition, the EU’s answer has been the passage of the EU Critical Raw Materials Act (CRMA). It aims to boost the supply quickly and responsibly by selecting Strategic Projects across mining, refining, processing and recycling value chain. But does the project pipeline across Europe match the objectives set in law by 2030? And how should the projects be selected? Focusing on the four battery materials - cobalt, lithium, manganese and nickel - this paper outlines T&E’s analysis.
Overall, the project pipeline to date shows substantial potential, with the EU able to meet most of its mining and processing needs for lithium locally, as well as substantial amounts of nickel and manganese. In addition, up to a fifth of all battery materials can come from recycling by 2030:
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19 mining projects are planned in the four battery metals analysis, with 12 focusing on lithium alone. If all of these were to go ahead, T&E estimates that 60% of the EU lithium demand from electric vehicles and energy storage can be met by 2030.
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An additional 19 facilities to process lithium, nickel, manganese and cobalt are planned by 2030. Over 80% of the EU’s lithium demand can be met if these were to go ahead. While the potential for nickel is less than a third, a globally innovative fossil free process is being pioneered in Finland.
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On recycling, the recovered lithium, nickel, cobalt and manganese could cover up to 40% of the demand by 2030 if all batteries are collected and production scrap included, rising to more than two-thirds by 2040, depending on the metal.
While substantial potential exists, a lot of the projects are in early stages of development with no definitive investment decisions taken or permits secured. That means sharp focus (on best in class sustainable projects), strong political support and clear industrial strategy are necessary to realise that potential.
How should Strategic Projects be selected? Here are T&E’s recommended criteria:
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Prioritise in line with CRMA’s benchmarks: 40% processing, 25% recycling and 10% mining. Metals processing and material recovery (recycling) bring the biggest value added where political focus should be.
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Strict sustainability criteria in terms of CO2 emissions, impact on land, water and broader ecosystems & meaningful engagement with local communities cannot be compromised.
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Globally, the selected projects should respect the Free, Prior and Informed Consent framework, bring at least 10% of additional value locally and commit to undergo the certification by the Initiative on Responsible Mining Assurance.
