Europe’s energy independence begins in the mine, Mining
Electrification, self-sufficiency of the European Union and independence from Russia and China will begin in the mine, high EU officials announce.
These and similar signals indicate that the block is preparing for the revival of mining, speeding up procedures for opening mines and turning to advanced technologies, which would enable decarbonization and the introduction of green technologies. It seems that the EU is ready to make some compromise in terms of easing environmental requirements in order to allow full momentum towards the internal supply of key raw materials.
It is estimated that the strictness of climate policies will be the decisive factor that will affect the demand for critical mineral raw materials. This means that the main question becomes: Is the world really moving towards compliance with the Paris Agreement?
A number of European mining companies, among them the Serbian graphite and calcite mine Belkalhan, have the potential to provide key raw materials necessary for the green transition, including the electrification of transport, but also for key industries, such as pharmaceuticals and chemicals. These projects would benefit from the adoption of the recently proposed European Critical Raw Materials Act, which provides public interest status for mining projects, shortening mine opening times and facilitating financing.
The energy system powered by clean energy technology includes solar photovoltaic (PV) power plants, wind farms, and electric vehicles (EVs), which generally require more minerals to build compared to fossil fuel-based systems. A typical electric car requires six times more mineral resources than a conventional car, and an onshore wind farm requires nine times more mineral resources than a gas-fired power plant, the International Energy Agency said.
Since 2010, the average amount of minerals required for a new electricity production unit has increased by 50 percent, with the increase in the share of renewable energy sources in new investments.
The key minerals and rare earth elements that should make this transition possible.
The types of mineral resources used vary depending on the technology. Lithium, nickel, cobalt, manganese and graphite are key to battery performance, longevity and energy density. It is graphite that is the key mineral, necessary for batteries for electric vehicles, consumer electronics and nanomaterials, that the Serbian Belkalhan mine can offer to the European market.
Rare earth elements are essential for permanent magnets, which are vital for wind turbines and EV motors. Electrical grids require a huge amount of copper and aluminum, with copper being the cornerstone of all electricity-related technologies.
The transition to a clean energy system will lead to a huge increase in demand for these minerals, the IEA estimates, meaning that the energy sector is emerging as a leading driver of mineral markets. Until 2005, the energy sector accounted for a small share of the total demand for most minerals. However, as the energy transition accelerates, clean energy technologies are set to become the fastest growing demand segment.
In a scenario that meets the goals of the Paris Agreement, their share in total demand will grow significantly over the next two decades to over 40 percent for copper and rare earth elements, 60-70 percent for nickel and cobalt, and almost 90 percent for lithium. EVs and battery storage have already displaced consumer electronics to become the largest consumer of lithium and are set to overtake stainless steel as the largest end-user of nickel by 2040.
Rare earth elements could rise three to seven times by 2040, depending on the choice of wind turbines and the strength of political support. The largest source of variation in demand will come from uncertainty about the stringency of climate policies.
The big question for suppliers is whether the world is really moving towards a scenario that is consistent with the Paris Agreement? If that is a case, policy makers would have a key role to play in narrowing this uncertainty by clearly stating their ambitions and turning goals into actions. This will be vital to reduce investment risk and ensure adequate capital flows into new mining projects.
Rare earth metals are essential for numerous high-tech manufacturing processes, and they are used in electric vehicles, wind turbines, portable electronics, microphones and speakers.
Potential European mines of key minerals
The Swedish company LKAB has identified a rare earth metal. That could be of great importance for the production of critical raw materials, which play a key role in enabling the green transition.
LKAB had identified more than a 1 million tons of rare earth oxides in the far north of the country, largest known such deposit in Europe. The European Commission considers that rare earth metals are the most critical resources for the region, and currently most of these raw materials are extracted in China. Rare earth elements currently are not mined in Europe and the demand is expected to grow in the years to come due to the increase in the production of electric vehicles and renewable energy sources.
LKAB plans to submit an application for an exploitation concession in 2023. However, it will take at least 10 to 15 years to start mining the deposit and shipping to market.
Also, Europe lacks full capacity for the processing of rare earth metals and the production of intermediate products. In addition, the continent must focus on the entire value chain for these metals, such as high-efficiency magnets that would be used for wind turbines and motors in electric vehicles.
A high-quality deposit of calcite, which contains a set of rare earth elements and yttrium, located in Serbia, could offer competitive options for supply to the European pharmaceutical industry. Serbian calcite mine Belkalhan, on the threshold of the EU market, could be a trade hub for third markets, given that Serbia has free trade agreements with major markets. Calcium carbonate is a common chemical component found in rocks such as the minerals calcite and aragonite.
Serbian calcite deposits have a confirmed purity of 99 percent, which makes them deposits of unique quality in Europe and highly attractive for the pharmaceutical and chemical industries, the paper, food and wine industries. It is estimated that the application of calcite in the pharmaceutical market will remain stable until 2040, and the European market is one of the key players, including pharmaceutical companies, but also investors and funds.
The application of calcium carbonate in the automotive industry is a fast-growing segment, with an estimated demand growth of 7.5 percent by 2030, thanks to applications in the production of electric locomotives and electrical components, among others. One of the most significant trends in calcium carbonate technology is the development of new and improved methods for the production of calcium carbonate from calcite deposits.
Belkalhan is an exploitation mining company focused on graphite and calcite, based in Serbia. The company aims to use raw materials of unique quality, which can be used in the industry of high-tech products, such as batteries, pharmaceuticals and chemical products.
Belkalhan has all the necessary exploitation permits and developed technology for underground mining, aiming to support the overall economic transformation. The R&D center for the supply of high-tech raw materials is the primary goal of Belkalhan, while searching for a reliable institutional investor.