INTERVIEW - CRMA is a very good first step but not enough, Svemin CEO says

The Critical Raw Materials Act (CRMA), adopted by the EU to secure essential raw materials for the green transition such as those needed for solar panels, batteries, and wind turbines, is a very good initial step but it alone will not be enough, according to the CEO of Swedish mining association Svemin.

"I think it is a very good first step, but I am afraid it will not be enough. It is good that we have benchmarks for 2030, but they are both very ambitious and will be hard to reach. We need to soon begin discussing benchmarks for the longer term, such as 2035 or 2040, to establish a clear, long-term vision of where we are going," Maria Suner told Renewables Now in an interview.

Achieving the targets outlined in the CRMA, particularly the goal of ensuring that at least 10% of the EU’s annual raw materials consumption comes from European mining, will be exceedingly challenging, according to Suner, who is also a Member of the Executive Committee of European Industry Association Euromines. In her view, only highly advanced projects could deliver something by 2030 due to the long-term nature of mining projects.

EUROPE NEEDS RELIABLE ALLIES

Even if Europe manages to achieve these benchmarks, it will never attain complete self-sufficiency in these raw materials. It will always require alliances and strong trade relationships with other countries and jurisdictions to secure these resources, Suner explained further.

"We have a long way to go to reduce our heavy reliance on a single supplier, which is China in many cases. If China were to exert its influence over raw materials, we would not get the raw materials we need today. Hopefully, the situation will improve in the next five years, but the CRMA is just a first step," she stressed.

"We need to attract more investments into exploration to Europe. At the same time, we need to help other parts of the world to explore and develop more projects. We have to collaborate with the big mining jurisdictions and like-minded countries such as Canada, Australia, and the US, whom we trust in trade matters, as well as other regions with potential like South America or Africa."

However, Suner warned that Europe must focus on its own domestic concerns and not rely heavily on raw material supplies as countries in Africa and South America could also aspire to advance in the value chain, taking on processing and production roles for items like wind turbines. "We should not assume that they will continue to solely supply raw materials to Europe in the future," she added.

FINETUNING REGULATIONS AND SECURING FUNDING ARE KEY ISSUES TO TACKLE

Suner considers regulatory obstacles and the lack of financing to be the main hurdles to the development of the mining industry in Europe.

"I think that even though the CRMA is focused on more efficient and faster permitting there are a lot of things to be done around permitting. The Water Framework Directive is something that we think needs to be revised in order to see that it does not hinder mining projects for example. There are also uncertainties surrounding certain nature conservation laws, such as those related to nature restoration and the soil directive, that require clarification. We need to figure out how to balance high environmental standards with mining activities. Addressing these legislative challenges will be crucial moving forward."

Another significant challenge, according to Suner, is financing. Financiers perceive mining projects as highly uncertain and risky, especially in the early stages. The lengthy process of discovering and developing viable deposits can span 10 to 20 years, posing a substantial commitment hurdle for investors.

"How can we collaborate with public funds to mitigate the risks associated with these types of projects? I believe there is still much to be done regarding the financing of raw material value chain projects. Europe needs to focus on establishing a financial ecosystem, particularly in the early stages of mining, as there is currently no funding available for these projects on European stock markets. Perhaps we need a pan-European raw material fund that can invest in these early stages and provide seed financing in different ways," she says.

Suner expects that designating selected projects as strategic will enhance their ability to secure funding. "I think one feature of projects selected as strategic in raw materials will be their ability to match with financing. Therefore, these projects may find it easier to get funding, but I expect only a few mining projects will be chosen as strategic."

When asked about the potential involvement of the European Investment Bank (EIB), Suner emphasised the need for its participation. "A couple of weeks ago, I had a meeting here in Stockholm where they reiterated their restrictive stance on mining projects. They indicated they can only consider funding mining projects if they are linked to processing projects within the same value chain. They require a clear off-take agreement at a fixed price with a customer to provide certainty, but creating such agreements is extremely challenging. I believe the European Union needs to explore how to support these projects in getting off the ground."

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