EU Announces 13 Critical Raw Materials Projects in Third Countries

What Are the EU's Critical Raw Materials Projects in Third Countries?

The European Union has recently unveiled 13 strategic raw materials projects beyond its borders as part of its comprehensive Critical Raw Materials Act (CRMA) implementation strategy. These international initiatives complement the 47 projects already established within EU member states, creating a two-pronged approach to securing vital supply chains. The EU's external projects represent a crucial component in the bloc's efforts to navigate the complex geopolitical landscape of critical minerals essential for Europe's green and digital transitions.

According to the European Commission's June 2025 announcement, these third-country projects will help diversify EU raw materials supply sources for materials identified in the EU's 2023 Critical Raw Materials List, which currently identifies 34 materials as strategically important, including lithium, cobalt, and rare earth elements.

Why Is the EU Investing in Critical Raw Materials Projects Abroad?

The Strategic Importance of Supply Chain Diversification

The EU's external raw materials strategy addresses a fundamental vulnerability in Europe's industrial ecosystem. With 98% of its rare earth elements currently imported from China (European Commission, 2023 Raw Materials Review), the bloc faces significant supply concentration risks. These international projects aim to reduce this dependency while securing materials essential for the energy transition security.

Battery material demand alone is projected to grow 14-fold by 2030 according to the EU Batteries Alliance's 2024 forecast, creating an urgent need for supply diversification. As EU Internal Market Commissioner Thierry Breton stated during the June 2025 press conference: "No single country should hold the keys to Europe's clean energy future."

The 2022 Chinese export restrictions on graphite serve as a cautionary example of why diversification matters. When China imposed export controls on this battery material, European manufacturers faced immediate price volatility and supply uncertainty, demonstrating the risks of concentrated supply chains.

The Critical Raw Materials Act Framework

The CRMA, which entered into force in May 2024, provides the legal foundation for these external projects. The legislation establishes:

• Streamlined approval processes for strategic raw materials projects
• Clear environmental and social governance standards
• Financial and technical support mechanisms
• Coordinated EU-level approach to resource diplomacy

The Act introduces regulatory innovations like "strategic project" designation, which enables expedited permitting without compromising environmental standards. This framework allows the EU to pursue supply security while maintaining its commitment to sustainability principles.

Where Are the EU's Third-Country Raw Materials Projects Located?

Strategic Partnership Countries

Seven of the 13 projects are located in countries with existing EU raw materials partnerships, leveraging established diplomatic and economic relationships:

• Canada: Building on the 2023 EU-Canada Critical Minerals Agreement
• Greenland: Operating under Denmark's Arctic environmental oversight framework
• Kazakhstan: Expanding cooperation in rare earths processing
• Norway: Deepening Nordic industrial integration
• Serbia: Advancing lithium development in the Balkan region
• Ukraine: Targeting lithium reserves (estimated 500,000 tonnes in Donetsk region according to USGS, 2023)
• Zambia: Developing cobalt resources in the historic Copperbelt mining region

New Partnership Locations

Six projects are establishing operations in countries without previous formal raw materials partnerships with the EU:

• Brazil: Focusing on rare earth elements, particularly neodymium-praseodymium (NdPr)
• Madagascar: Developing graphite resources
• Malawi: Exploring rare earth potential
• New Caledonia: Expanding nickel production capacity
• South Africa: Leveraging platinum group metals expertise
• United Kingdom: Establishing post-Brexit cooperation in critical minerals

This geographic distribution reflects the EU's strategy of combining established partnerships with new resource frontiers to create a diverse supplier network.

What Materials Do These Projects Target?

Battery Raw Materials Focus

A significant 76.9% of external projects (10 out of 13) concentrate on battery-critical elements, demonstrating the EU's prioritization of electrification technologies:

• Lithium: Primary focus in projects in Serbia, Brazil, and Greenland, where direct lithium extraction (DLE) technology minimizes water use
• Nickel: Major projects in New Caledonia will add approximately 15% to global nickel supply according to Macquarie Research (2025)
• Cobalt: Development in Zambia and Madagascar aims to reduce dependency on DRC sources
• Manganese: Processing facilities to upgrade material for battery-grade applications
• Graphite: Natural graphite extraction and processing for anode production

Rare Earth Elements

Two projects specifically target rare earth elements, which have seen significant price volatility, with NdPr prices increasing 87% between 2021-2023 according to Adamas Intelligence (2024):

• Materials essential for electric motor manufacturing (requiring approximately 1kg of rare earths per vehicle)
• Critical components for wind turbines, with each 3MW turbine requiring 1.5 tonnes of rare earths (IEA, 2023)
• Focus on separating and processing capability to break China's dominance in this sector

Project Distribution by Activity Type

The EU's external projects are strategically distributed across the value chain:

• 9 projects focus on extraction operations
• 1 project combines both extraction and processing (Greenland)
• 3 projects concentrate on processing raw materials

This distribution addresses the EU's need for both primary resources and refined materials ready for manufacturing.

How Will These Projects Be Funded and Supported?

Investment Requirements

The total estimated investment for these 13 projects reaches €5.5 billion, representing approximately 20% of the EU's €27.5 billion Global Gateway minerals budget. According to the European Investment Bank's Annual Report (2024), the EIB has already approved €1.2 billion for raw material projects since 2023.

Funding sources include:

• EU financial institutions, including the European Investment Bank
• Member state contributions through national development banks
• Private sector investments with public guarantees
• International development partnerships with host countries

The EIB's "Strategic Projects Fund" offers blended finance mechanisms with 30% first-loss protection to mitigate investor risk in challenging jurisdictions.

EU Support Mechanisms

Beyond direct funding, the EU offers comprehensive support:

• Coordinated assistance from the European Commission's Critical Raw Materials Office
• Facilitated access to funding opportunities through the EU Raw Materials Investment Platform
• Connections to relevant European customers through industrial alliances
• Expedited regulatory processes under CRMA provisions
• Technical assistance and knowledge sharing from the European Raw Materials Alliance

This multifaceted support aims to accelerate project development while ensuring alignment with EU standards and objectives.

How Do These Projects Compare to EU Internal Initiatives?

Scale Comparison

The EU's external projects are substantial but smaller than internal initiatives:

• External projects: 13 projects requiring €5.5 billion investment
• Internal EU projects: 47 projects with €22.5 billion investment (3.6x larger by capital)
• Internal projects span 13 different EU member states

This reflects the EU's primary focus on developing domestic resources while strategically supplementing with external sources.

Activity Distribution Within EU Projects

The internal projects show greater diversification across the value chain:

• 25 extraction projects
• 24 processing operations
• 10 recycling initiatives (representing 21% of internal projects vs 0% externally)
• 2 material substitution projects

According to EIT RawMaterials (2024), EU internal lithium projects alone could meet 50% of projected 2030 demand, showing the significant scale of domestic ambitions.

Material Focus Alignment

Both internal and external projects prioritize battery materials, creating complementary supply networks:

This alignment ensures coordinated development across the entire supply chain.

What Selection Criteria Were Used for These Projects?

Technical and Environmental Standards

The selection process employed rigorous evaluation metrics:

• Independent expert evaluation of all applications using a standardized assessment framework
• ESG scoring system weights:
  • 40% environmental impact
  • 30% social governance
  • 30% economic viability (CRMA Annex II)
• Technical feasibility assessment including resource verification and processing technology
• Compliance with Critical Raw Materials Act criteria for strategic project designation

These standards ensure projects meet the EU's sustainability requirements while delivering tangible supply security benefits.

Mutual Benefit Requirements

A key selection criterion was demonstrating advantages for both the EU and host countries:

• Sustainable development considerations for local communities
• Economic benefits for host nations, including job creation and tax revenue
• Knowledge transfer and skills development opportunities
• Alignment with host country industrial development strategies

This mutual benefit approach distinguishes the EU's external projects from traditional extractive operations by emphasizing long-term partnership.

Supply Chain Integration

Projects were evaluated on their ability to integrate with European value chains:

• Demonstrated ability to contribute to EU supply security goals
• Offtake agreements with European downstream industries
• Integration potential with existing EU value chains
• Proximity to established logistics networks
• Quality specifications matching European manufacturing requirements

These criteria ensure the projects will effectively contribute to Europe's strategic autonomy in critical materials.

How Will These Projects Impact Global Raw Materials Markets?

Diversification Effects

The EU's external projects will reshape global supply patterns:

• Reduced market concentration for critical materials
• Potential price stabilization through increased supply options
• New investment flows to developing resource-rich countries
• Alternative supply routes to dominant Chinese production

According to OECD forecasts (2024), these projects could reduce the EU's rare earth dependence from 98% to 65% by 2030, significantly improving supply security.

Geopolitical Implications

The initiative carries significant geopolitical implications:

• Strengthened partnerships between the EU and resource-rich nations
• Reduced vulnerability to supply disruptions from single sources
• Creation of alternative supply chains for strategic industries
• Enhanced EU industrial autonomy in critical sectors

China's response to these diversification efforts has already manifested in policy changes, including the Ministry of Resources (MOR) export controls on gallium implemented in July 2023, highlighting the competitive nature of the critical materials landscape.

"Raw material security is the missing link in Europe's climate equation." – Fatih Birol, IEA Executive Director (World Economic Forum, 2024)

What Timeline Applies to These Projects?

Approval Process Efficiency

The CRMA establishes accelerated permitting timelines:

• Traditional approval timelines of 5-10 years significantly reduced
• Mining projects: maximum 27-month approval process
• Processing projects: maximum 15-month approval process
• Accelerated permitting without compromising standards

Greenland's lithium project exemplifies this efficiency through the "Fast Track" permitting via the Government Resource Application System (GRAS) service (gov.gl, 2024).

Implementation Phases

The projects follow a structured implementation sequence:

• Project selection announced June 2025
• Development timelines vary by project type and location
• Phased approach to bringing new capacity online
• Priority given to projects with shortest time-to-market potential

This phased implementation allows for adaptive management and progressive scaling of supply as projects mature.

How Does This Initiative Support Europe's Green Transition?

Electric Vehicle Supply Chain Security

The external projects directly support Europe's transportation electrification:

• Materials targeted could supply batteries for 10 million EVs annually by 2030 (Transport & Environment, 2025)
• Addresses potential bottlenecks in EV production scaling
• Supports EU automotive industry's transition away from combustion engines
• Enables domestic battery gigafactory development

By securing these critical inputs, the EU aims to prevent material shortages from delaying its ambitious vehicle electrification timeline.

Renewable Energy Infrastructure

Beyond transportation, the projects support broader renewable energy deployment:

• Secures materials for wind turbine manufacturing, including rare earths for permanent magnets
• Supports solar panel component supply chains, particularly graphite and silicon
• Enables energy storage system deployment through battery material security
• Facilitates grid modernization efforts requiring specialized materials

Each 3MW wind turbine requires approximately 1.5 tonnes of rare earth elements according to IEA data (2023), illustrating the significant material demands of the energy transition.

What Are the Economic Benefits of These Projects?

Investment and Job Creation

The economic impact extends beyond material supply:

• €5.5 billion investment in third-country projects
• Local employment opportunities in host nations (15,000 estimated jobs in Zambia projects alone according to the Africa Development Bank, 2024)
• Technology transfer and skills development, with EU requiring 20% of project budgets allocated to local workforce training
• Economic diversification for resource-rich countries

These benefits create a positive development narrative that aligns with the EU's values of sustainable international partnerships.

Industrial Competitiveness

For European industry, the projects deliver strategic advantages:

• Secured supply chains for European manufacturers
• Reduced input cost volatility for EU industries
• Enhanced resilience against market disruptions
• Support for EU industrial policy objectives

By reducing dependency on dominant suppliers, European manufacturers gain both security and potential cost advantages in global mining landscape markets.

FAQs About EU Critical Raw Materials Projects

How were the projects selected?

The European Commission evaluated applications submitted in summer 2024, using independent experts to assess technical feasibility, environmental standards, and alignment with Critical Raw Materials Act criteria. Projects were scored using a transparent matrix weighting environmental, social, and economic factors.

Will these projects impact local environments?

All projects must meet strict environmental, social, and governance standards established under the Critical Raw Materials Act, with sustainability requirements equivalent to those within the EU. Each project undergoes comprehensive environmental impact assessment and requires ongoing monitoring and reporting.

How do these projects benefit host countries?

Host nations gain investment, job creation, technology transfer, and economic diversification opportunities, while maintaining sovereignty over their natural resources. The EU's approach emphasizes local value addition, skills development, and infrastructure improvements that extend beyond the mining sector itself.

When will these projects begin production?

Timelines vary by project type and location, but the streamlined approval process aims to bring new capacity online significantly faster than traditional 5-10 year development cycles. First production from the most advanced projects is expected by 2027, with full capacity anticipated by 2030.

How do these projects relate to EU climate goals?

By securing materials essential for batteries, electric vehicles, and renewable energy infrastructure, these projects directly support the EU's climate neutrality targets and green transition. Without these material inputs, the pace of decarbonization would be significantly constrained by supply bottlenecks and price volatility.

These initiatives also present significant investment opportunities for companies involved in modern mine planning and development, as the EU has committed substantial resources to accelerate these strategic projects.

Disclaimer: The implementation timelines and production forecasts represent current projections based on available information. Actual development schedules may vary due to technical, regulatory, or market factors beyond the control of project stakeholders.

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