Below is a customer email from the widely read and respected Benchmark Minerals. I'm not a paying subscriber so don't have access to the full reports but have highlighted the third paragraph which mentions graphite as a looming problem for Europe and flags Talga as coming to the rescue
Happy Friday!
This week, the European Union released its much anticipated Critical Raw Materials Act. Designed to reduce the region's reliance on China for minerals and clean energy technologies, the proposal sets firm targets for the sourcing and recycling of critical raw materials and aims to significantly reduce the time needed to permit new mines.
Although a target of meeting 10% of demand by 2030 from European minerals isn't particularly ambitious for lithium, the EU is currently forecast to fall short on cobalt. Find out more about what's included in the Act and whether the EU can meet its targets here.
Perhaps the biggest sticking point facing the EU will be building up sufficient spherical graphite production capacity to meet the target for 40% of processed critical materials to come from within the EU by 2030. Talga's operations in Sweden is the only source of the material in an EU member state forecast by 2030. As a result China will continue to have a near monopoly on the battery anode material.
The act also says that no more than 65% of Europe's annual consumption of each strategic raw material "at any relevant stage of processing" should come from a single third country.China is particularly dominant in production of rare earths and rare earth permanent magnets. This year the second-biggest magnet producer Japan has moved to secure its supplies of rare earths for its magnet industry through a A$200 million investment into Lynas, an Australian producer. It has also signed an agreement with MP Materials, a rare earth miner in the US.
As the EU is busy working out how it will meet its own critical raw material needs, the US has given the bloc Free Trade Agreement-like status by loosening restrictions on where materials can come from to make EVs eligible for IRA tax credits.
Downstream, Volkswagen will spend €15 billion ($16 billion) over the next five years to build battery plants and secure critical raw materials. It is diversifying its battery strategy outside of Europe and China by building its first non-European gigafactory in Canada.
Also on Benchmark Source this week, we look at the ESG implications of the EU's Critical Raw Materials Act, Benchmark analyst Robert Burrell explains the role of silicon anodes in a new video, we report on the rebounding of China's NEV sales last month, and Marc Bailey from Sucden Financial talks to us about what the battery industry needs from nickel pricing mechanisms.
Have a good weekend,
The Benchmark Source Team
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