What Are the EU's Critical Mineral Priorities?
The European Union has intensified its efforts to secure critical minerals through strategic projects both within and outside its borders. These initiatives aim to reduce dependency on dominant suppliers, particularly China, and ensure sustainable access to raw materials essential for the green and digital transitions.
The Critical Raw Materials Act Framework
The Critical Raw Materials Act (CRMA), which came into force in May 2024, establishes a comprehensive framework for identifying, supporting, and accelerating projects deemed critical to the EU's strategic autonomy in raw materials. This legislation represents a significant step in the bloc's industrial strategy, focusing on materials essential for technologies like batteries, renewable energy infrastructure, and digital applications.
According to EU Commissioner for Prosperity and Industrial Strategy Stéphane Séjourné, the CRMA is designed specifically to "increase the EU's security of supply of rare earths" through carefully selected strategic projects that can strengthen Europe's industrial resilience.
Strategic Benchmarks and Targets
Under the CRMA, the EU has set ambitious benchmarks for domestic capabilities:
- At least 10% of annual EU consumption of strategic raw materials should be extracted within the EU
- At least 40% should be processed within the EU
- No more than 65% of annual EU consumption of each strategic raw material should come from a single third country
These targets reflect the EU's determination to reduce vulnerabilities in critical supply chains while acknowledging the reality that complete self-sufficiency isn't feasible for most materials. The benchmarks create a balanced approach between domestic capacity building and diversified international sourcing.
How Is the EU Expanding Its Critical Mineral Network?
Recent Addition of International Projects
The European Commission recently expanded its critical minerals transition strategy by adding 13 strategic projects located outside the bloc to its priority initiatives list. These projects span across Africa, the Americas, Europe, and overseas territories, complementing the 47 strategic projects already identified within EU borders announced in March 2024.
This brings the total number of EU critical mineral projects to 60, creating a comprehensive network designed to secure materials essential for Europe's industrial future.
Geographic Distribution of New Projects
The newly designated projects are strategically distributed across multiple continents:
- Europe: United Kingdom, Norway, Serbia, Ukraine
- Africa: Zambia, Madagascar, Malawi, South Africa
- Americas: Canada, Brazil
- Asia: Kazakhstan
- Oceania: New Caledonia (French overseas territory)
This geographic diversification strategy helps the EU avoid over-reliance on any single region while building partnerships with stable, like-minded countries where possible. The inclusion of projects in regions like Ukraine demonstrates the EU's willingness to make long-term commitments despite current geopolitical challenges.
Investment Requirements
The Commission estimates that the 13 international strategic projects will require a total capital investment of €5.5 billion to bring into operation. This significant financial commitment underscores the EU's determination to secure critical mineral supply chains.
Stefan Bernstein, CEO of GreenRoc Strategic Materials, highlighted the significance of EU designation, noting that it recognizes the "importance to European industrial needs" of projects like their Amitsoq graphite development in Greenland—the first and only minerals project in Greenland to achieve strategic project status.
What Materials Are Being Targeted in These Projects?
Battery Materials Focus
Ten of the newly designated projects focus on critical battery materials, highlighting the EU's commitment to supporting its growing electric vehicle and energy storage industries:
- Lithium
- Nickel
- Cobalt
- Manganese
- Graphite
This concentration on battery minerals aligns with the EU's ambitious electric vehicle manufacturing targets and reflects the projected exponential growth in demand for these materials over the coming decade as transportation electrification accelerates.
Rare Earth Elements Projects
Two of the strategic projects are centered on rare earth elements, which are crucial for permanent magnets used in electric vehicles, wind turbines, and other clean energy technologies:
-
Frontier Rare Earths' Zandkopsdrift project (South Africa)
- One of the largest known rare earth deposits outside China
- Will help diversify global rare earth supply
- Strategic location in a mining-friendly jurisdiction
-
Mkango Resources' Songwe Hill project (Malawi)
- 18-year mine life
- Will produce approximately 1,953 tonnes per year of neodymium/praseodymium oxides
- Will produce approximately 56 tonnes per year of dysprosium/terbium oxides over the first five years of full production
William Dawes, CEO of Mkango Resources, emphasized that the Songwe Hill project will "diversify and secure rare earth supply chains for Europe," addressing a critical vulnerability in the continent's industrial base.
Graphite Development
The EU also designated GreenRoc Strategic Materials' Amitsoq graphite project in Greenland critical minerals as strategic. This marks the first and only minerals project in Greenland to achieve strategic project status, highlighting its importance to European industrial needs.
Natural graphite is a critical component in EV battery anodes, and Europe currently has minimal domestic production capacity despite rapidly growing demand. The Amitsoq project could significantly reduce Europe's dependency on Chinese graphite, which currently dominates global supply.
How Do These Projects Support EU Industrial Strategy?
Creating Integrated Supply Chains
The EU's strategy focuses on developing complete supply chains from mining to processing. For example, Mkango's Songwe Hill project in Malawi will work in conjunction with the company's Pulawy separation plant in Poland, which was previously designated a strategic project by the EU CRM facility in March.
This mine-to-magnet approach ensures that value addition occurs within the EU's sphere of influence, maximizing economic benefits while securing supply chain control from extraction to final manufacturing inputs.
Benefits of Strategic Designation
Projects designated as strategic under the CRMA receive several benefits:
- Coordinated support from EU member states
- Potential financial backing from EU institutions
- Streamlined permitting processes
- Enhanced visibility to investors
- Priority status in supply chain development
These advantages help accelerate project development timelines and improve access to capital—crucial factors in the highly competitive global race to secure critical mineral resources.
Strengthening International Partnerships
The EU is working to deepen cooperation with host nations, especially where strategic partnerships already exist for raw materials value chains. This approach combines economic development with diplomatic engagement to secure long-term access to critical minerals.
By investing in projects across multiple continents, the EU is building a network of reliable suppliers while contributing to economic development in partner countries—creating mutually beneficial relationships that can withstand geopolitical pressures.
What Challenges Do These Projects Face?
Financing Hurdles
While the strategic designation provides visibility and potential support, securing the €5.5 billion in capital investment remains a significant challenge, particularly in the current economic climate with high interest rates and competing investment priorities.
Many critical mineral projects require substantial upfront capital expenditure before generating returns, creating financing challenges even for projects with strong fundamentals. The EU designation helps mitigate some investor concerns, but doesn't eliminate the need for creative financing solutions.
Geopolitical Considerations
Many of the designated projects are in regions with complex geopolitical dynamics, requiring careful diplomatic engagement to ensure stable operating environments and reliable supply chains.
Projects in locations like Ukraine face obvious challenges related to the ongoing conflict, while operations in parts of Africa must navigate changing political landscapes and resource nationalism concerns. The EU's diplomatic weight can help address some of these issues, but geopolitical risks remain a significant factor.
Environmental and Social Standards
The EU's commitment to high environmental and social standards means these projects must meet rigorous sustainability criteria, potentially increasing development costs but also ensuring long-term viability.
Important note: While higher standards may initially appear to disadvantage EU-backed projects compared to less regulated competitors, they actually create long-term advantages by reducing operational risks, enhancing local community support, and preparing for increasingly stringent global ESG requirements.
Mining projects with strong environmental credentials and effective mine planning & ESG strategies are increasingly valued by both investors and customers seeking responsibly sourced materials for their supply chains.
How Does This Strategy Compare to Global Competitors?
US Critical Minerals Approach
The United States has implemented its own critical minerals strategy through the Inflation Reduction Act and Defense Production Act, focusing on domestic production and friendly-nation sourcing. The EU approach appears more internationally diversified, reflecting its limited domestic resources for many critical minerals.
While the US strategy leverages significant financial incentives through tax credits and direct subsidies, the EU's approach combines regulatory support with strategic designations that help projects navigate bureaucratic hurdles and access multiple funding sources.
China's Dominant Position
China continues to dominate global critical mineral supply chains, particularly in processing capacity. The EU's strategy represents a deliberate counterbalance to this dominance, though catching up to China's established position remains challenging.
China controls approximately 80% of global rare earth processing capacity and dominates graphite production and processing—key materials targeted by the EU's strategic project designations. This existing market concentration makes building alternative supply chains both urgent and difficult.
Emerging Competition from Other Regions
Other regions, including Australia, Canada, and parts of Africa, are also developing critical mineral strategies, creating a competitive global landscape for investment in these projects.
Australia's Critical Minerals Strategy and Canada's Critical Minerals Innovation Network represent parallel efforts to the EU's initiatives, sometimes creating collaborative opportunities but also competing for limited investment capital and mineral resources.
What Are the Next Steps for EU Critical Mineral Projects?
Implementation Timeline
The CRMA's framework is now in place, but the actual development of these projects will unfold over several years, with most not expected to reach production until the latter half of the decade.
Mining projects typically require 5-10 years from designation to production, meaning the EU's critical mineral strategy is necessarily focused on mid-term security rather than immediate supply concerns. This timeline highlights the importance of starting these initiatives now despite their extended development periods.
Monitoring and Adaptation
The EU will likely continue to monitor the progress of designated projects and adapt its strategy as global market conditions and technological requirements evolve.
The EU's Joint European Critical Raw Materials Board will play a key role in tracking project advancement and identifying emerging gaps in the strategic mineral portfolio. This ongoing assessment ensures the EU can respond to changing technology needs and supply chain developments.
Potential for Additional Designations
Given the rapidly evolving nature of technology and critical mineral requirements, the EU may designate additional strategic projects in the future as new needs emerge or as existing projects face challenges.
Materials not currently prioritized, such as titanium (with significant deposits in Ukraine) or antimony, may receive greater attention in future rounds of strategic designations as technology needs evolve and supply risks become more apparent. Additionally, innovations in direct lithium extraction may reshape how some critical materials are sourced in the future.
FAQs About EU Critical Mineral Projects
What is the Critical Raw Materials Act?
The Critical Raw Materials Act (CRMA) is an EU legislative framework that came into force in May 2024, designed to identify, support, and accelerate projects critical to the EU's strategic autonomy in raw materials.
Why is the EU focusing on critical minerals outside its borders?
The EU has limited domestic resources for many critical minerals, necessitating partnerships with resource-rich countries to secure supplies essential for green and digital transitions.
How many strategic mineral projects has the EU designated?
The EU has designated a total of 60 strategic projects—47 within EU borders and 13 in international locations, according to the European Commission's press release.
What benefits do designated projects receive?
Designated projects receive coordinated support from EU member states, potential financial backing, streamlined permitting, enhanced investor visibility, and priority status in supply chain development.
Which materials are considered most critical by the EU?
While the EU has a comprehensive list of critical raw materials, particular focus is being placed on battery materials (lithium, nickel, cobalt, manganese, graphite) and rare earth elements used in permanent magnets, as detailed by the European Parliament's analysis.
Disclaimer: The mineral projects discussed in this article involve significant technical, financial, and geopolitical risks. Development timelines and production capacities mentioned represent current estimates that may change as projects advance. This information should not be considered investment advice.
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