The European Union plans to set up a centralized authority responsible for building and maintaining an inventory of critical minerals to avoid having the United States snatch the world’s critical minerals from “under our noses”, the EU’s executive VP for industrial strategy told the Financial Times.
Stéphane Séjourné said that the European Union had become “collateral damage” in the trade war between the United States and China, even though the EU has been rather belligerent in its trade rhetoric to China as well, threatening a range of import curbs including tariffs to punish China for its allegedly unfair practices in the form of government subsidies for key industries of the same sort that the EU also has.
Because Europe, like the U.S., is overwhelmingly dependent on imports of critical minerals essential in a range of industries, it now plans to set up a body “to buy, co-ordinate European purchases, set aside stocks and also to push companies to integrate more economic security into their supply chains”.
The official admitted the European Union was late to the critical minerals supply chain transformation, noting that “The Americans have a business department that buys stocks of critical materials before us everywhere in the world. They often buy them from under our noses.”
To catch up, Séjourné said the EU would seek to sign supply contracts with countries such as Brazil and South Africa in the coming weeks and complained that miners and processors of critical minerals did not want to set up shop in Europe because prices there were too high—especially compared with China.
To address the high price problem, the official proposed putting some sort of a price floor as part of efforts to secure critical mineral supply for European industries.
“Europe needs to clearly map its CRM [critical raw materials] needs and vulnerabilities and then throw the kitchen sink of financial de-risking instruments at them,” the head of industry group Cleantech for Europe told the FT in comments on the critical mineral situation.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com
- Exxon Joins Chevron in Eyeing Lukoil’s Global Fire Sale
- Sanctions Slow Russian and Iranian Crude Flows to China
- Russian Crude Piles Up but Oil Prices Refuse to Move
