Mining Magazine spoke with Peter Handley, deputy to the director of the European Commission, about critical raw minerals, and associated risks, including the influence of China and the contentious issue of deep-sea mining.

Peter is currently heading the team on energy-intensive industries, raw materials and hydrogen at the European Commission's Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs. 

Let's start with hearing a bit about the Commission's outlook on critical minerals. Could you tell me a bit about the Critical Raw Materials Act and its significance? 

This is actually quite a big deal. It's the first time that the EU has introduced legislation, which is applicable across Europe around securing suppliers of raw materials. We're now waiting for the final procedural steps so that this act can be published in the official journal and enter into force. And we think it'll enter into force sometime in early May. 

This is actually pretty fast going for European legislation. It normally takes 2 or 3 years from the time the Commission proposes legislation, but we managed to actually go from our proposal on the 16 March 2023 to get a political agreement already by the 13 November 2023, so less than nine months. And since then, it's just a regular process of cleaning up the text and getting it translated into different languages. But all the main parameters of the deal are in place, and we're looking forward to its entry into force.

What are the objectives of this act? And why is it so important stage?

It's important because we can see some very worrying signs that the European economy cannot be sure it's going to get the raw materials that it needs for its general economic purposes. But also, in relation to all these different technological and policy objectives (…), we've set in law Europe's ambition to be climate-neutral by 2050. We've got a whole raft of energy and climate legislation to make that possible. But all of these things actually require replacing a fossil fuel economy with one that is based on clean energy and technologies, all of which are much more metals and minerals intensive than the system that they replace.

We've got the digital transition as well, things like AI, quantum computing, you know, lots of big data issues. And everyone thinks that the whole economy of the world is now virtual and detached from material facts, but it's absolutely not true. All of these things are based on data centres, wiring, and electronic equipment. It's very materials-based. And let's not forget, finally, we have security, we have defence, we have aerospace, these are sectors of also strategic importance, which are very materials intensive. 

And the what is - we want to improve our understanding of what's really going on in the global markets and the European markets for these metals and minerals. There is an equal amount of weight on the security of supply because there's no point just rushing for gold if you don't take account of the impact we're having on the planet.  So we have to balance the security of supply with sustainability.

What do you think are the main risks to the supply chain for battery metals and critical minerals in the years to come? 

There's a whole series of risks. If you want to zoom in on the battery value chain, you have to start from the endpoint, which is, for example, electric cars. If you want to be able to produce electric cars here in Europe, they need to have battery factories; they need to have the ability to make the cathode materials, to make the anode materials, and all of that presupposes that you know where you're going to get your raw materials from. So the essence of the battery value chain is understanding vertical integration requirements to make it all happen. 

Then you have to ask the question, do we care where the stuff comes from, geographically speaking? Because the EU has said that it wishes to be one of the leading markets for producing batteries and electric vehicles. So the risks we face therefore are do we secure the supplies domestically or from outside the EU. Then [we need to] make sure that European businesses are alert to opportunities, ready to invest and engage in projects that can offer good ESG performance standards. 

China does do a lot of the extraction and processing. What are your views on diversifying away from China?

Well, the Critical Raw Materials act is all about diversification, but that's not just diversification from China. It's not an anti-Chinese piece of legislation; it's a pro-Europe one, a pro-resilient economy piece of legislation. 

That's one form of diversification. And the other is to spread our external sourcing where we can so that we're not 100% dependent on a single country for a particular material because that's an excessive amount of risk. We want to reduce these strategic dependencies and spreading the supply is the best way to achieve that.

And what is your outlook on extracting within Europe? Do you think that there should be more mining done locally as well?

That is an important piece of the puzzle. And that's why one of the benchmarks we've set in the regulation is to raise the level of domestic extraction of metals and mining metals and minerals, to at least 10% of our 2030 consumption requirements. 

We have the resources already identified in the EU, where we've got projects already at some stage in development (…) We do expect to see a return to some degree of what we always used to do in the past. Let's not get the impression that there's no mining in Europe; there is quite a bit already, particularly in regions in the north of Europe. 

What is what is your outlook on deep-sea mining? And do you think that it could perhaps plug some of this supply gap?

The EU has taken a pretty clear position on deep seabed mining, which is that we should be very, very cautious before doing it, because so much is unknown about the vulnerability of the environment and biodiversity ecosystems.

This European position is set out pretty clearly in a variety of documents, including our ocean strategy, our biodiversity strategy, and also in the Critical Raw Materials Act. 

One of the issues that we negotiated right to the very end was this precise issue. And it's not the place of the Critical Raw Materials Act to address the overarching question of deep seabed mining. But we think it's pretty unlikely that there will be any strategic projects under the Critical Raw Materials Act that are coming from deep seabed mining.

Now, that said, Norway is a sovereign country. And it's up to Norway to decide its own policies, as indeed, other countries are looking also at the potential of deep seabed mining, including the US, Japan, and China. But for the time being, this is not part of the EU's own plans.

What do you think should be the priority for mining companies going forward?

If we're talking about mining companies operating in Europe, I think, first of all, they need to identify good projects that they can fit in as candidates for becoming strategic projects under the Critical Raw Materials Act. And that's an offer I make not only for the mining projects but also for the refining and recycling projects because we want to move pretty fast on identifying, receiving and then assessing a first set of strategic projects to get this Act really moving.

The second thing that mining companies, in particular, can do is engage from the very beginning with local communities to provide reassurance, good explanations, and good answers.

And they also need to make sure that they're developing the market for their materials because there's little point in developing a good supply side in Europe if you haven't got the demand coming from the downstream manufacturing sector. So we need to get that joined-up value chain approach moving much faster than it has done in the past. 

 

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