Auditors: No easy path forward for Europe on critical minerals

(CN) — In a reality check to high-minded talk in Europe of strategic independence, the European Union’s auditors say the bloc is set to rely for many more years on imports of so-called “critical minerals,” a term for minerals such as nickel, cobalt, bauxite and silicon used in modern technology.

The European Court of Auditors warned in a Monday report that the EU’s inability to overcome this dilemma risks undermining Europe’s ambitions for a vast buildup of renewable energy and achieving geopolitical independence.

“Without critical raw materials, there will be no energy transition, no competitiveness and no strategic autonomy,” said Keit Pentus-Rosimannus, a lead auditor at the agency that examines how well EU institutions and laws are working.

“Unfortunately, we are now dangerously dependent on a handful of countries outside the EU for the supply of these materials,” she said. “It is therefore vital for the EU to up its game and reduce its vulnerability in this area.”

The bloc’s dependencies range across the spectrum of minerals now at the heart of modern technology, including wind turbines, solar panels and electric vehicles.

For instance, the EU gets 97% of its magnesium from China, 99% of its boron from Turkey, 79% of its lithium from Chile and 65% of its phosphorus from Kazakhstan. Boron is used to make solar panels, magnesium for electrolyzers (devices used to make hydrogen power), and phosphorus and lithium are needed for EV batteries.

The report said the EU’s efforts to secure critical minerals in recent years, including by signing deals with a number of countries to diversify its supply, have largely failed to fix the problem.

Inside the EU, the bloc cannot expect to drastically build up domestic extraction and production of critical minerals because it’s so difficult to open new mines and processing facilities, the report said.

It said mining projects in the EU typically take between 10 and 15 years to get off the ground. In at least one case involving a mine in Sweden, it took 30 years for it to open, the auditors noted.

Similarly, the EU does a minimal amount of processing of critical minerals, the report said.

“Within the EU, processing is affected by a lack of technology and a shrinking number of facilities,” it said.

It added that it remained too early to determine if recent efforts to boost processing were working. But it noted investors are wary of funding such projects, which often face stiff resistance.

Pentus-Rosimannus said the EU must speed up permitting for mining projects, though not at the expense of environmental standards.

“Permitting needs to be faster, not nicer,” Pentus-Rosimannus said during a news briefing.

In 2024, the EU adopted the Critical Raw Materials Act with the aim to tackle its supply problems. To that end, EU nations are supposed to make sure they get no more than 65% of any strategic raw material from any single country outside the bloc by 2030.

The legislation also set targets for EU nations to boost the extraction and processing of critical minerals and do a better job of recycling goods containing critical minerals. But the legislation made those targets voluntary.

“We found that financial, legal and administrative bottlenecks hamper progress in this area,” the report said about efforts to boost mining projects. “Exploration of deposits in the EU remains underdeveloped.”

The auditors suggested making it obligatory for EU countries to reach targets on recycling goods containing critical minerals, but noted that industry and national governments are largely opposed to setting binding targets in other areas.

In its bid to find new mineral supplies, the report noted that the European Commission — the EU’s executive branch — has entered into a number of free-trade agreements in recent years.

But the auditors said the commission “cannot at present demonstrate that these free trade agreements helped to increase the supply of critical raw materials to the EU.”

The commission did not immediately reply to a query from Courthouse News. However, the commission accepted almost all the recommendations made by the auditors.

The auditors concluded the EU is at risk of “running short of raw materials” needed for renewable energy production and will remain dependent on imports past 2030.

“EU action on import diversification is not producing tangible results, bottlenecks hinder domestic production, and recycling is still in its infancy,” the auditors said. “Against this backdrop, many EU-supported projects are unlikely to succeed in time.”

Alessandra Hool, the head of ESM Foundation, a Swiss think tank that specializes in critical minerals, said the audit was a “rather sobering” reminder that the EU’s “ambitions are not being met at this stage.”

She said the EU faced “an institutional problem” because it “has traditionally lacked the tools to invest quickly, directly and strategically in specific industries at the necessary scale.” She added that “its democratic decision-making processes, while protecting legitimacy and safeguarding diverse interests, make rapid, large-scale interventions more complex.”

“As long as this structural limitation remains, it will be difficult to deliver on ambitious industrial and raw materials policies, regardless of how they are designed on paper,” she said in an email.

Courthouse News reporter Cain Burdeau is based in the European Union.**

Follow @cainburdeau