Critical Raw Materials: The Key to the EU's Green and Digital Future

Today’s evolving landscape of energy transition and digitalization has made critical raw materials (CRMs) more in demand than ever before. This is especially evident in the European Union (EU), as the regional bloc is committed to becoming the first climate-neutral continent by 2050 with the European Green Deal.

In one of its many European Green Deal initiatives, the EU proposed the Critical Raw Materials Act on March 16, 2023, with the aim to secure a sustainable supply of CRMs.¹

This presents an important opportunity for mining exploration companies looking to supply CRMs to European countries.

The European Green Deal is essentially a roadmap to transform the EU into a modern, resource-efficient, and competitive economy. Through a range of adopted proposals and initiatives, the Deal seeks to prepare the EU’s climate, energy, transport, and taxation policies for cutting net greenhouse gas emissions by at least 55% by 2030 and into net zero by 2050.²

The Critical Raw Materials Act is one of the EU’s core initiatives in pursuit of this vision. The proposal aims to make sure that Europe’s strategic sectors, such as renewable energy, digital, space, and defense, have a secure and sustainable supply of CRMs.

The European Commission offers a precise outline of its aims:³

• Strengthen and diversify the EU’s supply of CRMs
• Improve the EU’s capacity to monitor and mitigate risks of supply disruptions
• Improve circularity and sustainability

To boost the Act’s objectives, the EU also intends to establish mutually beneficial partnerships with third countries, that is, countries that are not EU members but have reserves of CRMs.⁴

CRMs (also known as critical minerals in other countries) are classified as such by the EU not only because of their innate properties but rather on a combination of various factors. Two key parameters are crucial according to the European Commission:⁵

• Economic importance
• Supply risk

These two measures largely deal with demand and supply-side aspects of CRMs.

Among the in-demand raw materials for the EU’s green and digital future include lithium, copper, nickel, platinum group metals, and rare earth elements. For example, EU demand for lithium is expected to increase twelve times by 2030 and twenty-one times by 2050.⁶ As of 2023, the EU lists 34 CRMs:

Under the Critical Raw Materials Act, the EU intends to strengthen its engagement with non-EU member countries to develop and diversify investment, production, and trade.⁷ This approach helps pave the way for mining exploration companies operating outside the EU to be suppliers of CRMs to the bloc.

CDN Maverick Capital Corp. (CSE: CDN | OTCQB: AXVEF | FRA: 338B), a firm headquartered in Canada, is one such example. The company is exploring for lithium at its two exploration projects in Quebec, Canada, and in the Puna Region of northwest Argentina. CDN Maverick aims to help accelerate the global sourcing of critical mineral resources for a more sustainable future.

Another mineral exploration company is the Canada-based Alta Copper Corp. (TSX: ATCU | OTCQX: ATCUF | BVL: ATCU). With a sharp focus on advancing its copper project in northern Peru, which boasts a substantial 16 billion pound copper resource, the firm is advancing globally towards decarbonization and electrification—trends that are dramatically unfolding in the EU today.

As of this writing, the proposed Critical Raw Materials Act is being reviewed by the EU’s institutions. The latest update from June 30, 2023, stated that the Council of the EU has obtained the mandate for negotiations with the European Parliament.⁸

Although the Act’s final adoption is yet to be seen, there is indication that it will pass with favorable support. For instance, the Council of the EU showed its alignment with the European Commission’s proposal of the Critical Raw Materials Act’s objectives.⁹ This bodes well for mineral exploration companies hoping to become suppliers of CRMs to the EU. These firms can look forward with optimism as they stand to benefit and play a potentially crucial role in supplying the EU’s growing needs for a circular and sustainable future.