America is outpacing Europe in terms of resource sovereignty

Europe needs new mines, yet the mining sector faces almost insurmountable challenges despite politicians’ plans to the contrary. In North America, by contrast, a significant momentum is currently building in the race for lithium, copper and rare earths.

Through the Inflation Reduction Act (IRA) economic stimulus programme and other measures, US policymakers have clearly committed to establishing an independent supply of raw materials. The same applies in Europe – but only on paper, as analysts at the mining investment consultancy Miningscout point out. Rio Tinto is emblematic of the difficulties involved in developing deposits. The mining giant intends to carry out the Jadar lithium project in Serbia. Jadar is one of the world’s largest lithium deposits (it also contains boron). Discovered in 2004, the deposit could meet 90 per cent of Europe’s current lithium demand. Yet the project is making no headway: in 2022, protests broke out and the government in Belgrade failed to grant the necessary permits.
Ironically, it is the Chinese newspaper Global Times – one of the two nationwide English-language daily newspapers in China and under the auspices of the Communist Party – that has noted that Europe’s attempts to reduce its dependence on distant importing countries are making little headway. Admittedly, the ‘Critical Raw Materials Act’ has set targets for certain strategic raw materials: by 2030, the EU aims to mine at least 10 per cent of its annual requirements, recycle 25 per cent and process 40 per cent. The Chinese put it succinctly: The most important measure for achieving this target is the development of new mines. However, mining in Europe is more expensive than in many of its international competitors. Challenges such as high labour costs and strict environmental regulations, a long-standing lack of technical progress in the domestic mining industry, and high energy costs are obstacles that are almost impossible to overcome.

Europe lacks momentum
Europe lacks the momentum needed for the revival of its mining sector – momentum that is, however, present elsewhere, as the MiningScout experts note. Consequently, the continent risks falling behind as global commodity flows are reorganised. Not only the ambitious explorer Chariot, with its geologically promising project in the McDermitt Caldera in the USA, which, according to its owner Lithium Americas, is the largest known lithium source in the United States and the third largest in the world, is an example of how the battle for raw materials sovereignty is being waged more vigorously in North America. The Canadian deep-sea mining exploration company The Metals Company (TMC) recently reported the successful production of the world’s first cobalt sulphate from polymetallic nodules on the seabed – having already succeeded with nickel sulphate a month earlier. Dr Jeffrey Donald, Head of Onshore Development at TMC, sees this as a boost “for the entire deep-sea mineral industry”, which is in the starting blocks.
Europe, by contrast, is still in its infancy in this field. North American mining companies are also gaining considerable momentum outside Western countries. For example, the Canadian company Ivanhoe Mines has reported progress at the Komoa-Kakula mine in the DR Congo. The complex is set to become the world’s third-largest copper supplier in the coming months – ahead of the original schedule. If nothing changes, North America will completely outpace Europe in the supply of key raw materials in the coming years – with all the consequences that entails for the economy on this side of the Atlantic, analysts conclude.
Source: Miningscout