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The EU and Australia Take Steps Together in the Race for Critical Minerals

Event Recap
June 5, 2024
The EU and Australia take steps together in the Race for Critical Minerals Background Image
Event Recap
June 5, 2024

On the occasion of London International Disputes Week 2024, Vinson & Elkins hosted “Supply and Demand: Rallying Together to address the Key Challenges in the Race for Critical Minerals”, focusing on the contractual and regulatory framework in a variety of jurisdictions and the key risk factors that are ripe for dispute as we hurtle through the exploration and exploitation of critical minerals. Co-sponsored by ArbitralWomen and Women in Energy Connect UK (WEconnect), the lively panel was moderated by Ciara Ros of V&E, with insights from Julia Humpidge of HKA, Kezia Owusu-Ansah of Templars, Louise Woods of V&E, Marion Smith KC of 39 Essex Chambers and Victoria Usova of Central Asia Metals PC. The audience was treated to a lively, informative discussion around the use and importance of critical minerals (in the energy transition and beyond), the key challenges and rewards in the world of deep sea mining, recent developments in the race for critical minerals in West Africa (including lessons to be learned from the award of the first lithium mining license in Ghana, to Atlantic Lithium Ltd.), the key issues that keep in house counsel up at night, including regulatory uncertainty and the importance of early engagement, and the dispute risks and trends arising out of the race towards net-zero.

The importance of the exploration and exploitation of critical minerals has been highlighted in the recent signing of a Memorandum of Understanding between the European Union and Australia, on 28 May 2024, creating a partnership to support their common objectives. The particular focus points of the partnership are:

  1. to enable the EU to diversify its supply of the critical minerals and materials that are needed for the green and digital transitions; and
  2. to enable Australia to continue its development of its domestic critical minerals programme.

The partnership covers the full critical minerals value chain, including exploration, extraction, processing, refining and recycling. As was highlighted during the panel session at LIDW, processing is an often neglected element of strategy and risk discussions around critical minerals and its inclusion is a welcome part of the partnership between the EU and Australia. The signing of the MoU is a key step for the EU, in view of the strength of Australia in the critical minerals market, having retained its position as the top producer of lithium in the world, and a top five producer of cobalt, manganese ore, rare earths, rutile, tantalum and zircon in 2022.1 It follows from the Action Plan on Critical Raw Materials, which set out the EU’s plan to engage in strategic partnerships with resource-rich countries, with similar agreements being singed with Canada and Ukraine in 2021, Kazakhstan and Namibia in 2022, Argentina, Chile, Zambia, the Democratic Republic of Congo and Greenland in 2023 and with Rwanda, Norway and Uzbekistan earlier this year.

In addition to the aims of the partnership in relation to the critical minerals strategy from a development and utilisation perspective, the partnership will also focus on continuing to develop and maintain programmes to reduce environmental impacts and increase benefits to local communities as part of the critical mineral value chain, as well as promote innovative and digital technologies in mining. The practical steps will include cooperation on research and innovation, promotion of high environmental, social and governance standards and practices and integration of sustainable raw materials value chains. The standardisation of governance stands and practices by improved policy alignment will be a welcome change for mining companies as they seek to develop projects across the EU and Australia and consider the challenges of transport and storage of critical minerals.

A roadmap of actions will be jointly developed over the next six months.

1 https://www.ga.gov.au/scientific-topics/minerals/critical-minerals

Key Contacts

Partner
Louise Woods
Senior Associate
Ciara Ros
Associate
Elena Guillet

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.