Mining industry warns against Europe’s drive for raw material ‘autonomy’

“Nickel mined within the EU and from sources outside of the EU complement each other. The growing demand within the EU can only be satisfied by ensuring that mine production from the EU and elsewhere go hand in hand,” a Nickel Institute spokesperson told EURACTIV. [Sunart Media / Shutterstock.com]

This article is part of our special report Sustainable sourcing of batteries.

Relying solely on raw materials sourced within Europe could incentivise the use of cheaper, non-recyclable batteries, increasing the need to mine virgin materials to power electric vehicles, industry has said.

Rare earth metals, cobalt and nickel, are key components in lithium-ion batteries and are well-suited for reuse, which has given rise to hopes that much of Europe’s demand for these raw materials can be met through recycling rather than mining.

However, until enough end-of-life batteries enter the system to facilitate widescale reuse, it is necessary to continue mining large quantities of virgin materials to meet projected demand.

Under the proposed EU battery regulation, the use of minimum levels of recycled content for cobalt, lead, lithium, and nickel in battery manufacturing will not become mandatory until 2030.

Nickel is primarily sourced from Asia at present, while around two-thirds of cobalt is mined in the Democratic Republic of Congo.

But concerns over poor working conditions there and potential supply disruptions have led the European Union to look for raw materials inside Europe in search of greater “strategic autonomy”.

“More than 90% of rare earth magnets are produced in China today,” reads an extract from a recent report by the EU-backed European Raw Materials Alliance.

“This high production concentration in combination with rising global political tensions and a growing Chinese domestic market demand – particularly driven by a growth in electric mobility – results in a high supply risk for these materials from a European perspective,” the alliance warned.

New EU alliance aims for 'strategic autonomy' on key raw materials

The European Commission launched a new industry alliance on Tuesday (30 September) aimed at strengthening the EU’s “strategic autonomy” on raw materials like rare earths, which are considered key for the bloc’s green and digital transitions.

In addition to opening mines within EU countries, EU leaders have sought to strike deals with neighbouring countries such as Ukraine and Western Balkan nations for raw materials sourcing.

Some lawmakers have gone further and called for European automakers to favour battery chemistries that exclusively require raw materials that can be sourced from Europe.

While shifting exclusively to technology that does not require imports may seem like a solution on paper, doing so would harm efforts to create a more circular economy and may require more virgin material extraction, explained Adam McCarthy, President of the Cobalt Institute.

“The thing that makes [cobalt-free cells] attractive to purchasers is the fact that they’re much cheaper. But that also means that it’s not economical for recycling companies to recycle it, because the value of the metals is lower,” he told EURACTIV.

“So, you have this set of trade-offs where it might be helpful [at meeting a certain policy objective] in some ways, but it doesn’t necessarily mean that it’s going to be better from a new sourcing perspective.”

The Nickel Institute said that while there are world-class nickel producers in Europe, nickel sourced from outside of the EU is currently necessary to meet demand.

“Nickel mined within the EU and from sources outside of the EU complement each other. The growing demand within the EU can only be satisfied by ensuring that mine production from the EU and elsewhere go hand in hand,” a spokesperson told EURACTIV.

Green campaigners, for their part, say the status quo is much worse.

“Europe is essentially 95% supply dependent on imports of crude oil,” said Alex Keynes, a clean vehicles expert with green NGO Transport & Environment. “It’s not like the status quo is a better situation [compared to virgin materials for batteries] and for the climate our dependence on oil is obviously a disaster,” he told EURACTIV.

“The key here is for Europe to move away from oil,” he added.

Hazards ahead: Electric cars face battery recycling hurdles in Europe

European recyclers have called for changes to EU regulations on hazardous metals and waste shipment that “sometimes stand in the way” of a fully European electric car manufacturing value chain.

Working conditions

The mining industry has faced controversy over reports of unethical working conditions in developing countries. In 2016, Amnesty International sent tremors through the tech industry when it published a report revealing that 35,000 child labourers worked at cobalt mines in the Democratic Republic of Congo.

It may be tempting for Europe to issue a blanket ban on materials from nations implicated in these abuses, but this would not solve the broader problem, according to Adam McCarthy.

“You still need to engage with the underlying issues of poverty that exists in the cobalt mining regions, because without that you’re always still going to find these issues,” he said.

McCarthy referred to the severe poverty that many children in these regions face, noting that some are the de facto head of their household and so responsible for providing an income for their family.

“It’s not just a matter of one piece of legislation tackling the problem. It has to be international cooperation, including the government of the DRC. Some people tend to simplify the issue, although it’s not just black and white. It needs a more detailed and nuanced approach to it, as we see right now,” he added.

This view was broadly shared by Alex Keynes, who argued in favour of rigorous checks rather than halting all mining activity.

“[T&E is] not calling for some kind of moratorium on metals from high-risk areas, because it would actually be, in some cases, a lot worse for the workers in the region if the companies were to blanket pull out. The solution is rather to help regulate the sector and for companies to exercise their own leverage to ensure they’re sourcing from suppliers that are not exploiting their workers,” he said.

Under the proposed battery regulation, companies that do not act against worker abuses will face a ban from the EU market. The law would also require third party verification carried out by accredited bodies.

Green MEP Henrike Hahn called the due diligence requirements “the key element of the proposed EU batteries regulation”, arguing that verification is needed to weed out abuses in the supply chain.

“These [due diligence requirements] are intended to ensure that neither the production of batteries nor the extraction of the required materials leads to human rights violations or environmental damage,” she told EURACTIV.

“[The Greens] are calling for mandatory due diligence and the system of controls and transparency over the supply chain. That is important to us, including the chain of custody or traceability system,” she added.

European battery law will set global standard for the car industry, EU says

Proposed EU legislation to ensure materials for batteries are sourced ethically and sustainably will push up global standards, making Europe a “trailblazer” in the field, the European Commission has said.

Timeline

Mark Mistry, senior manager with the Nickel Institute, said the industry welcomes the due diligence requirements, seeing it as “an opportunity for companies to demonstrate that they fulfil the expectations from regulators, their customers, and civil society”.

However, he warned that the deadlines to implement the responsible sourcing requirements contained in the draft law are overly short given the complexity involved.

“We acknowledge concerns that for the EU battery regulation to be a success, it is important that responsible sourcing be implemented shortly after it enters into force. However, the timeframe needs to remain realistic to develop and implement solid, rigorous responsible sourcing frameworks before auditing takes place,” he wrote in a recent op-ed article.

In response, T&E’s Alex Keynes encouraged lawmakers to stick with the current deadlines, arguing that the due diligence requirement only requires proof that a company has started the process.

“You don’t have to show proof of result, you have to show proof of process and effort,” he said.

“European companies are at the forefront of higher social and environmental sustainability practices. A lot of companies are already implementing social supply chain due diligence policies. Many of these companies are already essentially doing a lot of this stuff,” he added.

EU aims to dethrone Asia as world's battery powerhouse

Brussels plans to wrest the title of global electric vehicle battery leader from Asia by supercharging Europe’s battery production and imposing strict green criteria that will make European products the de facto global standard.

[Edited by Frédéric Simon]

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