Pensana Plc (LON:PRE) has noted a recent publication by the European Raw Materials Alliance, of which the Company is a founding member, which calls for governments and manufacturers to support Europe’s rare earth industry.
The report, titled Rare Earth Magnets and Motors: A European Call for Action, has identified 14 projects in the EU that will require about $2 billion of total investment.
The report includes a 12-point Action Plan which ERMA summarises in four key recommendations:
· European policymakers will need to create a level playing field given that EU production costs are intrinsically higher than Chinese production costs which benefit from direct and indirect state subsidies.
· European original equipment providers who require rare earths will need to consider potential commitments to buying a significant percentage share of materials from European producers.
· The EU will need to ensure that end-of-life products containing harvestable rare earths stay in Europe to facilitate reprocessing and recycling.
· Match funding presents a unique opportunity to trigger large private investments in the emerging European rare earths value chain. The EU and its Member States should pull all financial levers, including state aid, such as designating a dedicated Important Project of Common European Interest (IPCEI).
Concurrently in Australia, Prime Minister Scott Morrison announced a A$2 billion loan facility for Australian critical minerals projects, explaining that global demand for critical minerals is expected to grow exponentially over the coming decades.
In the United States, the Biden administration has acknowledged that 10X more rare earths are needed to meet its Electric Vehicle goals and has tasked the Department of Defense to investigate US rare earth supply chains.
Three years ago, Pensana recognised this looming problem and set about establishing the world’s first fully sustainable and independent magnet metal supply chain in the UK.
“The EU has committed to the goal of becoming climate neutral by 2050. The raw materials needs to facilitate this energy transition are massive, and Europe urgently needs to secure their supply. This Action Plan outlines the steps we must take to ensure that the rare earth elements upon which the EU Green Deal relies remain available for European industry and society”, said Bernd Schäfer, CEO of EIT RawMaterials which manages ERMA.
The ERMA report can be accessed in full here: https://erma.eu/european-call-for-action/