Securing Critical Raw Minerals for a Sustainable Future

The session, moderated by Rui Botica Santos (Senior Partner, CRA), confronted the urgent challenges facing Europe’s critical minerals sector, focusing on the widening gap between climate ambition and metal production due to regulatory roadblocks, local opposition, and slow development times. 

Closing the Gap: Production vs. Climate Goals (Jason Holden, S&P Global Commodity Insights) 

Jason Holden’s presentation used global and regional data to illustrate the slow pace of project development and the challenges in meeting supply needs. 

• Discovery Decline: Despite global exploration budgets being at their highest in a decade, grassroots discoveries are declining significantly. The majority of new reserves are extensions of pre-1999 deposits. 

• • In the 1990s, 50-60% of expenditure was on grassroots exploration; last year, it was only 28%. 

• Time to Production is Lengthening: The average time to bring a new mine online has tripled since the 1990s, now standing at 17.8 years (between 2020-2024). This is primarily due to permitting, community feedback, and government incentives, rather than technical issues. 

• • Implication: An exploration success today in Europe might not be producing until well beyond 2040. 

• European Expenditure Gap: While over 100 companies are exploring in Europe, it accounts for only 2-3% of the global exploration spend. 

• Emissions Success (Scope 2): Mining companies have successfully reduced Scope 2 emissions (from electricity grid supply) by shifting to renewables. Countries like Portugal fare well globally due to high hydro and renewable energy in their grids. 

• Emissions Challenge (Scope 1): Reducing Scope 1 emissions (from diesel-powered mine trucks and equipment) remains the primary challenge, as technology for large-scale electric/hydrogen equipment is still developing. 

 

Transparency and Governance (Mark Burnett, EITI) 

Mark Burnett discussed how the Extractive Industries Transparency Initiative (EITI)  framework can help Europe and countries like Portugal build trust and accountability in the mineral sector. 

• EITI Global Standard: EITI is a global standard for transparency in oil, gas, and minerals, operating in 55 countries, involving governments, companies, and civil society in a multistakeholder platform with equal voice. 

• Relevance to Europe: EITI strengthens governance by promoting transparency in contracts, beneficial ownership, and revenue management. It complements EU legal frameworks, including the Critical Raw Materials Act (CRMA). 

• • Example: EITI data is used in countries like Norway and Ukraine (which are CRMA strategic partners) to strengthen due diligence and trust. 

• Focus on Portugal: Portugal, with its significant mineral potential (including lithium), is seen as having a strong business case for EITI membership. Implementation would provide open data, a structured dialogue platform, and support sustainable development. 

• Anti-Corruption Tool: The EITI process turns legal disclosure obligations into public accountability by requiring oversight and dialogue, which helps mitigate corruption risks in the supply chain. 

 

The Role of Subnational Governments (Andres Sanabria, OECD) 

Andres Sanabria emphasized that while national governments set strategic policy, the success of mining projects relies heavily on local conditions and governance. 

• Local Bottlenecks: The critical hurdles for project implementation are at the subnational level (regional and municipal): 

• • Community Acceptance: Poor community engagement during the exploration phase creates social unrest, leading to project delays or even municipal “vetoes.” 

• • Workforce and Skills Gap: Mismatches between local labour supply and mining demand. 

• • Land Use Planning: Municipal decisions can block future potential projects. 

• Unlocking Positive Effects: Mining, when managed well, can bring significant demographic and economic benefits to often-rural communities. 

• • Example: The Kittilä municipality in Lapland (home to a gold mine and a ski resort) is growing by 10% in population, in contrast to the surrounding region’s decline. 

• Call for Governance Framework: Subnational governments must be involved from the start to improve environmental impact assessment and ensure that mining contributes to local development through proper governance and policy frameworks. 

 

A Call for Pragmatic Regulation (Bernhard Maier, Browne Jacobson) 

Bernhard Maier, a disputes specialist, addressed the need for balanced and “pragmatic” regulation, highlighting the complex intersection of the CRMA’s ambition and environmental legislation. 

• Regulatory Conflict: The push to “go for it” under the CRMA (to reduce reliance on China and increase European output) conflicts with complex environmental rules. 

• REACH Regulation as a Roadblock: Maier focused on the proposed revisions to the REACH Regulation (on chemical classification and restriction). 

• • Example: The proposed draft would have set an extremely low exposure limit for Cobalt and classified Lithium salts as Category 1A/1B reproductive toxicants. 

• Industry Pushback: Industry associations heavily criticized the proposed REACH redraft, arguing it would have shut down virtually all Cobalt and Lithium projects in Europe. 

• Commission Retreat: Due to this strong pushback, the European Commission went back to the drawing board, showing that industry and legal advocacy can influence regulatory outcomes. 

• The Legal Safety Net: Maier stressed that if new regulations are burdensome, their success will be judged on whether they comply with the EU’s international obligations. The final recourse for companies facing problematic regulation is often legal challenge, including international arbitration.