EU and Australia Join Forces to Safeguard Critical Minerals Supply Chain in Pursuit of Carbon Neutrality Goals
The Memorandum of Understanding (MoU) will concentrate on sustainable raw materials value chains integration and collaboration in research and innovation throughout the raw materials value chains.
The EU and Australia have officially signed a Memorandum of Understanding (MoU) to secure the future provision of sustainable critical minerals, affirming joint commitments to establishing essential supply chains.
By primarily aiming to connect secure and sustainable critical minerals supply chains between the EU and Australia, both nations view this agreement as a way to expedite their net zero transition goals.
Executive Vice-President and Commissioner for Trade Valdis Dombrovskis said, “Australia is a like-minded partner and global leader in critical raw materials. This partnership represents a significant advancement in our efforts to ensure a more sustainable supply of critical raw materials for the EU and promote investment in Australia.”
The initiative also aims to expand the EU’s supply diversity while enhancing Australia’s local critical minerals sector to encourage investments in constructing resilient and sustainable critical and strategic minerals value chains.
Both countries will collaborate on environmental, social, and governance (ESG) aspects to identify market opportunities, advocate for stable and sustainable critical minerals production, and enhance policy alignment.
In addition to project expansions along the complete value chain connecting the EU and Australia, the partnership includes working together to minimize environmental impacts and support local communities. This involves research and innovation, as well as bolstering mining services.
Following the MoU’s establishment, the EU Commission announced the development of a roadmap outlining specific collaborative actions to implement the strategic partnership within the next six months.
Commissioner for Internal Market Thierry Breton stated, “I believe that signing this partnership will send a strong message throughout the entire raw materials ecosystem in the EU and in Australia. It will enhance cooperation, investments, and business opportunities. We aim for more sustainable and responsible production and genuine industrial integration of value chains between the EU and Australia to support competitiveness.”
“We need to quickly advance and collaborate with governments and the private sector to unleash the full investment and business potential.”
This agreement comes at a time when concerns are rising about China’s dominance in the supply of critical minerals. For example, the EU relies on China for 98 percent of its rare earths supply, 93 percent of its magnesium, and 97 percent of its lithium requirements.
Hence, the collaboration with Australia is viewed as strategic, as the country contributes 52 percent of global lithium production and also produces minerals essential for the net zero transition, such as cobalt, copper, manganese, nickel, and rare earths.
Australia also has the potential to extract gallium and germanium, of which China currently produces 80 percent and 60 percent of global production, respectively.
Mr. Farrell highlighted, “Australia possesses some of the largest critical mineral deposits globally—minerals crucial for various products from electric vehicles to wind turbines. Our partnership will encourage EU investment in Australian renewable energy projects.”
