By Andy Home
LONDON- Europe has belatedly woken up to the fact it has a metals problem.
The region’s production capacity, particularly at the refining and processing stage of the supply chain, has been hollowed out by years of price attrition from lower-cost competitors, first and foremost China.
“Europe has reached a critical fork in the road,” according to European metals association Eurometaux.
“The next five years will decide whether we succeed in recovering and growing our sustainable metals and minerals value chains, or whether other areas of the world will push further ahead in the global resources race,” it said in a mid-year white paper.
The European Commission agrees, realizing its big green industrial revolution will need a lot of metals the region currently doesn’t have.
This week has brought an updated critical minerals list and the unveiling of the Commission’s grand plan for doing something about an import dependency that has been exposed across multiple sectors by COVID-19.
The European Union (EU) is now following the same path as Japan and the United States in building out its own metallic supply chains.
It’s another sign that industrial metals are emerging as a key fault line in a shifting global economic order.
The EU’s critical minerals list is very similar to that of the United States, comprising some of the least known elements of the periodic table such as beryllium, hafnium and scandium.
Bauxite (aluminum), titanium, lithium and strontium have been added in the latest three-yearly update, while helium has been dropped “due to a decline in its economic performance”. Nickel is not included but will be monitored “closely”.
It’s worth noting that both aluminum and titanium have already undergone “Section 232” national security investigations in the United States, resulting in tariffs and further negotiations with supplier countries respectively.
Aluminum is a case example of Europe’s raw materials problems if it is to achieve its Paris Agreement carbon emissions targets.
The metal was identified by the World Bank as the biggest demand beneficiary of a drive towards renewable energy. Yet Europe’s primary aluminum production capacity has fallen by around one-third since 2008.
Strontium is included because the entire region relies on a single European company for the supply of a metal that is used in ceramic magnets and robotics.
Lithium might look like a belated addition to the list, given its central role in batteries for electric vehicles, one of the pillars of Europe’s “Green Deal” carbon-reduction strategy.
But the metal is already a core focus for the “European Battery Alliance”, an EU private-public initiative that has been running since 2017.