Full article (EU digs for more lithium, cobalt and graphite in...

Full article (EU digs for more lithium, cobalt and graphite in green energy push):

As Europe seeks ways to end its need for Russian oil and gas, officials in Brussels hopesome of the answers lie on home soil — or, rather, under it.

TheEuropean Commission wants to boost output of its own raw materials needed forgreen energy. Its plans, which are still in their infancy, would lowerregulatory barriers to mining and production of critical materials such aslithium, cobalt and graphite, needed for wind farms, solar panels and electricvehicles.

Even beforeRussia’s war on Ukraine created the risk of a total shutdown of Russian gasexports to the EU, the commission — which wants to sharply increase renewablesuse — was sounding the alarm about the risks of being too reliant on importedraw materials.

By 2030, EUdemand for rare earth materials for wind turbines will increase fivefold,according to the commission, but global supply is only projected to double.Demand for lithium is likely to be almost 60 times as high as currentconsumption by 2050, according to the EU’s Joint Research Centre. The need forcobalt and graphite could be nearly 15 times higher.

“Demand isincreasing dramatically due to the digital and green transition of our society[but] we are too often almost entirely dependent on imports, while thegeopolitics of supply chains are increasingly unstable,” said EU internalmarket commissioner Thierry Breton.

This wouldrequire an “open debate” about more mining, processing, refining and recyclingin Europe, Breton said. “We prefer to import from third countries and close oureyes on the environmental and social impact there, let alone the carbonfootprint of importing. But mining in Europe does not have to be a dirtybusiness.”

Efforts tounearth big reserves of lithium in Portugal suggest how difficult it will befor the EU to attain its goal, however.

A potentialcornerstone of Europe’s green energy transition, the Barroso mine innorth-eastern Portugal was expected to begin producing lithium for electricvehicle batteries in 2020. But Savannah Resources, the London-listed owner, hasbeen forced to push the start date back several times as it awaitsenvironmental approval. In July Portugal’s regulator added a phase to theprocess, causing Savannah to reset its production launch again, this time to2026.

DaleFerguson, Savannah’s interim chief executive, says it is hardly surprising thatenvironmental scrutiny in the EU is lengthier than in his native Australia orthe US.

“You can’tcompare a mine on the edge of a remote desert in Australia with a project inEurope,” he said.

Faced withhurdles like those in Portugal, which has not licensed a large mining projectfor 30 years, the commission is working on a proposed Raw Materials Act aimedat stimulating EU production.

Among the ideasare provisions to designate key strategic projects for accelerated permitting,creating a one-stop shop for project authorisations, or measures to speed upnational legal processes when there are challenges. They draw on EU regulationsthat have expedited permitting for electricity infrastructure.

A 2021 JRCreport said Europe’s potential resources were under-explored, with the lowestinvestment in mining activities of any big region. Data on the EU’s reserves is hazy.

Meanwhile,demand is growing. The EU target is for renewables to produce 32 per cent ofthe bloc’s energy by 2030, but that could increase to 40 per cent or even 45per cent if the European parliament gets its way in negotiations. In 2020,about 22 per cent of the EU’s power generation came from renewable sources,according to the commission.

Dries Acke,policy director at SolarPower Europe, said the industry body expected EUinstallations of photovoltaic cells to reach an all-time high of 34GW thisyear, up from 28GW in 2021. But he said supply of raw and processed materialswould determine the availability of solar products.

Brusselshas been working on plans to improve “circularity” of products, such as oldmobile phone batteries, so their rare metals are reused. But Cillian Totterdell,climate and energy policy lead at consultancy FleishmanHillard, said the EUwould also have to improve its import or extraction of fresh supply.

“It’s ahuge issue securing resources,” he said. “We have not thought about this nearlyenough. From an EU perspective it’s crazy that circularity has been the onlyanswer, when more resources are needed than circularity can deliver in theshort to medium term.”

As thingsstand, Europe produces less than 1 per cent of the world’s lithium ion cellscompared with China’s 66 per cent, according to the JRC.

Still, notall EU governments believe large-scale homegrown production of critical rawmaterials is realistic or desirable. “We live in Europe, not China,” said oneEU diplomat, pointing to the legal challenges and environmental opposition tomining projects. “There’s a question mark over the extent to which we canactually pull this off, and whether it’s not preferable to do this withcountries [outside the EU] that we trust.”

WhileBreton has been pushing hard to bolster domestic production — following a“strategic autonomy” agenda similar to those seen in areas including hydrogenand semiconductors — other commission officials emphasise the need for bettertrade links outside the EU.

ValdisDombrovskis, EU trade commissioner, said in July that geopolitical pressureswere “shifting our perspective on trade policy” and that the bloc needed toland more deals with “like-minded partners” to bolster its economic resilience.His goals include a deal with Chile — a key source of lithium — before the endof the year and an agreement with Australia in the first half of 2023.

Still,Savannah’s Ferguson said the EU could not expect all the answers to come fromoverseas. “We need to get some of these projects through and into production assoon as we reasonably can,” he said.