Growing demand for electric vehicles has spurred
small-scale miners of the lithium, cobalt and rare earths that automakers rely
on to develop mines and build refining capacity in Europe to reduce their
reliance on China.
Efforts by the United States and Europe to build a
secure and independent supply chain for the key minerals used
in electric vehicles (EVs), wind turbines and aircraft engines have accelerated
as the pandemic led to shutdowns and shortages.Top of FormBottom of
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With companies under pressure to reduce their carbon
footprint, processing metals into goods that are circulated within the
continent and do not have to travel far is an environmental goal.
At least four smaller companies are building
facilities to process ore in Europe’s special economic zones over the next five
years, with more planning to build mines on the continent and process materials
on site, company officials said.
Mkango Resources, a rare earth developer with
projects in Malawi, is working with chemicals company Grupa Azoty Pulawy to
build a separation plant in Poland’s Special Economic Zone, benefiting from tax
exemptions and state aid.
“The site… aligns with European initiatives to create
more robust, diversified supply chains,” said Mkango Resources CEO William
Dawes.
Rare earths, such as neodymium, praseodymium, terbium
and dysprosium, are used to make magnets to fire EV engines and operate
windows, offshore wind turbines and other high-tech devices. China currently
provides 98% of the world’s supply.
Europe is home to automakers including Volkswagen,
BMW Group, Stellantis Renault, as well as suppliers of automotive components,
who are under pressure from regulators to source materials within the region.
EU “rules of origin”, which determine where goods
have been manufactured or produced, stipulate that 65% of the value of a
product will need to be locally sourced from 2027 to qualify for tariff-free
movement of goods within the bloc.
Relocating from low-cost jurisdictions such as Asia
carries risks, said Craig Scherba, president of graphite developer NextSource
Materials, which has a project in Madagascar and plans a battery anode
facility, with Europe one of the possible locations.
“Those that can maintain low costs will survive,” he
said.
Elsewhere, rare earths developer Pensana Plc, which
owns assets in Angola, is building a plant to purify the metals in Britain,
using the UK government’s Automotive Transformation Fund, which awards grants
to accelerate the transition to a net-zero vehicle supply chain.
“There are a number of incentives which have been put
in place,” said Pensana Chairman Paul Atherley.
The Saltend plant had lower capital expenditure and
operating costs than at comparable sites in Europe, he said. Saltend is in the
Humber ports region which has freeport status, making arriving goods exempt
from tariffs.
Pensana has so far secured 15 million pounds ($20.96
million) through an equity raise for the $125 million plant which will create
about 100 jobs.
For the local community, new jobs are welcome, but
union representatives say that British industry will also have to invest in
training workers.
Australia’s Infinity Lithium is seeking to develop
the San Jose Industrial Lithium Project in Spain, an open-pit mine that aims to
also treat and refine onsite.
NeoMetals, another Australian firm, is planning a
lithium recycling plant in Germany. For major miners, who deal with much bigger
tonnage, building facilities in Europe is generally uneconomical but some are
making the move.
Glencore is looking at European processing plants,
including in Britain, for their recycling operations, while Rio Tinto plans to
have a processing facility onsite at its Serbian lithium mine Jadar, expected
to start a feasibility study at the end of 2021.
Part of the role so-called junior miners serve in the
industry is to de-risk projects and undertake the early development works,
which in some cases leads to acquisition by larger miners, said Caspar Rawles
at Benchmark Mineral Intelligence (BMI).
Mining.com