To B(RE)E or not to B(RE)E or just another European paradox?

Optimism and realism are rarely going along together, and that is obvious in the case of Rare Earth Elements (REE) in Europe. Here is the story in brief.

Political reforms, economical re-orientation and high industrial growth rates in China has led to a tremendous upward spiral of mineral consumption, in this case accompanied by a shift of emphasis to high-tech and base metals, and industrial minerals for steel manufacturing and building. In short, China alone was changing global mineral production and demand figures. Country’s national or more correctly government mineral policy was by next day the one and only exploitation strategy implemented and operated by all state-owned mining companies put in place. Growing needs of mineral resources and supplies should be secured by all means. Environmental issues were then not paid the proper attention. Yet, the country is not self-sufficient in the extraction of essential mineral raw materials and that brought an increased interest of Chinese miners to other international resources and markets. For example China controls today the up- and downstream REE minerals supply chain industry. It is the only functioning economy in the world with respect to REE exploration, mining, processing, refining and metal production. On the other hand, there is currently a strong Chinese interest for global investments as they probably need additional sources of REE.     

Following up these developments the EU had to address these new challenges so that the appropriate technologies, processes and products are in place, along with adequate policies to implement and stimulate the required changes, given also that Europe is not self-sufficient in the extraction of essential mineral raw materials with REE value supply industrial dependence to almost over 95% in average. However there is a serious concern whether things are handled the right way to be able strengthening Europe’s position in the REE supply chain. At an early approach, options and expectations do not look optimistic neither realistic. The EU has delivered initiatives, strategies, and criticality reports on mineral raw materials, has mobilized almost all experts and put a lot of resource efforts, but to date there have only been some advanced exploration projects in Europe and Greenland with unclear schedules towards mining, extraction, processing and metallurgy, although REE mineral resources coming from European sources (e.g. EURARE project, ERECON network) seem to be there. In contrast to China the development of REE exploitation in Europe is progressing slowly, with the absolute need for consensus among the member states not being the only problem.

In the name of the free market, with its positive and negative sides, most of the European REE projects are in the hands of junior prospecting or mining companies, probably unable to proceed downstream in the supply chain through all stages of the exploitation process. They naturally do things after their own corporate strategy and not after the citations and the recommendations of any EU strategy. In this sense, it is rather uncertain, in case they manage to proceed with mining, whether they will reach metallurgy or be just satisfied by producing only ore concentrates.

There seems also to be that Greenland, although they had several dialogues with the EU, they would really like to see things move faster and that might bring them to even closer and more concrete agreements with Chinese. For the EU industrial economy it is important to have the metallurgy in Europe. This is where the technology and the added value is. Of course for China having the operation of the whole exploitation and supply chain in place, the country would get more and more interested to continue being the main controller and key actor by simply importing REE mineral raw materials and processed ores from other parts of the world, including Europe and Greenland. Is there any way for the EU to stop or even control this trend in a more efficient and determined way? Under the present circumstances, the answer is NO. Europe needs to do things implemented and operated faster and to put the entire supply value chain industrially forward. REE and other critical mineral raw materials should also be considered strategic and this should probably bring governments’ to get more interested and active, and any potential states’ enterprising activities to be operationally more involved into exploitation and production process.