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29/02/2024
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EU’s mining revival bid should learn from ESG innovations abroad to avoid mistakes of past

As part of its twin green & digital transitions, the EU is preparing to ramp up domestic mining, with its Critical Raw Materials Act (CRMA) receiving a boost from the European Parliament–Council political agreement sealed in mid-November.

By 2030, the Act notably calls for the bloc to extract 10% of its annual consumption of critical minerals, pursue new trade partnerships and embed strong ESG measures.

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Yet Brussels faces emerging obstacles to its ambitions. In Portugal, protests erupted in early November amid an alleged corruption scandal involving lithium mining projects, triggering Prime Minister Antonio Costa’s resignation. More broadly, residents in Portugal and across Europe are expressing concerns over new mining developments’ ecological impact and weak socioeconomic benefits for local communities.

Given that many EU-based projects lack credible plans for higher value-added activities, the bloc risks reviving an outdated mining model while undermining positive contributions to climate action. Moving forward, the EU should take inspiration from the ESG-driven, local value-creating mining partnerships in the world’s critical minerals powerhouses to fuel the bloc’s clean energy transition.

Avoiding ghosts of the past

With global demand for critical minerals – particularly cobalt, copper, lithium and nickel – soaring, EU member states face a massive import dependence ranging from 75% to 100% of consumption, making it abundantly clear why many policymakers are making the case for boosting EU extraction and diversifying global supply chains.

During her recent trip to Chile – a major critical minerals trading partner for the European bloc – Commission President Ursula von der Leyen heralded a break with the past, claiming that while “others take the minerals after they have been extracted” for refining in their countries, Europe believes that local communities benefit from having both environmentally-sound mining and higher value-added processing operations.

Meanwhile, Philippe Varin, former CEO of French nuclear fuel cycle company Orano, has posited that “the image of last century’s open-pit mines has nothing to do with what we have to offer today,” citing modern “responsible mines that respect economic and regulatory conditions.”

Unfortunately, on-the-ground realities do not always align with these virtuous aspirations. In northern Portugal – Europe’s biggest lithium producer – the national environmental agency recently greenlit the development of four open-pit mines, a project which has become embroiled in a government corruption scandal concerning the “unblocking of procedures,” sparking strong local opposition from residents and environmental groups.

Beyond Portugal, anti-mining demonstrations have assembled citizen opponents of new mining projects from Sweden to France on both socioeconomic and ecological grounds, as Europe’s justified political ambitions for a mining revival increasingly diverge with public opinion.

DRC’s cobalt fuelling new development era

The good news is that, in the years before Europe’s mining reawakening, a new generation of global mining developments has been proving that a different approach is possible – one which not only mitigates harmful impacts but generates significant local value.

Chinese mining company CMOC, for example, has helped cement the Democratic Republic of Congo (DRC)’s status as the global leader in cobalt production. Through its majority stake in Tenke Fungurume Mine (TFM), CMOC is driving up output of cobalt and copper, including through its newly-operational mixed ore processing project, while investing in key physical and social infrastructure in its surrounding communities.

Last year, CMOC allocated nearly US$43.5 million to community projects to help accelerate the UN’s Sustainable Development Goals, including local education, health and economic development initiatives, in addition to around $56.82 million for biodiversity, resource-efficiency and carbon-neutral interventions.

What’s more, CMOC is actively supporting the professionalisation of the DRC’s artisanal and small-scale mining (ASM) sector through its participation in the Fair Cobalt Alliance and RCS Global Group’s Better Mining program with its Geneva-based trading arm IXM.

Looking ahead, CMOC has recently expressed its strong support for the DRC Government’s plans to develop local EV battery supply chains, while affirming its intentions to bolster its collaboration with state mining firm Gécamines to fuel the DRC’s sustainable growth.

Uranium mining paving Kazakhstan’s economic future

As the global roll-out of critical mineral-dependent clean energy technologies accelerates, it will be vital to ensure that this deployment is not anchored in electricity is generated from fossil fuels.

As Malcolm Keay of the Oxford Institute for Energy Studies has rightly asserted, “renewables are going to be the major part of a low-carbon system; the question is what else is needed to back up” this intermittent power source, citing nuclear energy as a vital fossil fuels alternative.

In the effort to scale up nuclear energy, Kazakhstan’s uranium wealth is set to play a central role. Over the past three decades, the partnership between France’s nuclear fuel powerhouse Orano and Kazakhstan’s national uranium company, Kazatomprom, has driven the Central Asian country’s rise as the world’s leading uranium producer. Established in 1996, KATCO operates the world’s largest in situ recovery (ISR) mine, with ISR technology enabling the economically-efficient, environmentally-sound extraction of uranium by replacing the conventional digging process with leaching solution injections that dissolve ore before pumping uranium to the surface.

Beyond this sustainable innovation, KATCO recruits over 70% of its 1,200 employees from its operational area in southern Kazakhstan – making it the region’s largest employer. Moreover, KATCO maximises its social impact through scholarship and vocational training programmes in partnership with local schools and universities as well as support for low-income communities, including a €3 million emergency medical centre in Turkestan that provides 24-hour care for local residents while fuelling the region’s socioeconomic development.

Looking ahead, the memorandum of understanding signed by Orano and Kazatomprom in November 2022 will see the long-term expansion of their industrial partnership, including the new South Tortkuduk mining project. Building on President Macron’s recent visit to Kazakhstan to deepen bilateral nuclear cooperation, France should use its significant sway in the EU to incorporate KATCO’s responsible mining model in the bloc’s nascent domestic efforts.

By placing socioeconomic and environmental considerations at the heart of operations, these global, partnership-based mining projects are providing a vital roadmap for Europe. With public discontent rising in the EU’s mining regions, the bloc’s leaders cannot afford to let the errors of the past undermine the growing political consensus needed to see this ambitious vision through.

 

Source: EU Today

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