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EU’s New Strategy on ‘Critical Raw Materials’

As the Wuhan pneumonia epidemic has highlighted the global dependence on electronic products and technologies required for remote work and teaching, the European Union (EU) has become worried that, in the production of smartphones and related products, it will increasingly have to rely on raw materials that other countries supply. The EU recently proposed a new strategy to reduce its dependence on China, Chile, South Africa and other countries through the establishment of the “European Raw Materials Alliance.”

On September 4, 2020, Vice President of the European Commission Maros Sefcovic pointed out that 75 to 100 percent of the majority of the metals that the EU uses come from countries outside of the European Union, and China provides 98 percent of its rare earth supply. The EU realized that it is necessary to reduce risks in the supply of critical raw materials during the era of green and digital transformation. Critical raw materials have increased from 27 in 2017 to 30 in 2020. The reason for the EU to regard these materials as “critical” is mainly that there is either an insufficient supply or the concentration lies in a handful of suppliers.

In addition, Turkey supplies 98 percent of the borate that the EU consumes; 68 percent of the cobalt comes from the Democratic Republic of the Congo. Chile supplies 78 percent of lithium, and South Africa supplies 71 percent of the platinum.

“We have to change our approach drastically,” said Sefcovic. He added, “We are largely dependent on unsustainable raw materials from countries with much lower environmental and social standards, less freedom and poor, unsustainable economies.”

By 2050, the EU will need around 60 times more lithium, essential for e-mobility, and 15 times more cobalt, which is used in electric car batteries. Therefore, the EU must accelerate its independence in the supply of raw materials. “We need to make better use of the resources within the European Union, where we would apply the highest environmental and social standards,” Sefcovic said.

The EU’s new strategy is to establish the “European Raw Materials Alliance,” consisting of industry stake holders, investors, the European Investment Bank, and member states to ensure the supply chain of mineral raw materials. Supply diversification also requires partnerships. Starting next year, the European Commission hopes to start partnerships with Canada, Australia, and interested African countries.

Source: Radio Free Asia, September 4, 2020