The European Union (EU) has added copper and nickel to its list of critical minerals at a time when both metals are facing significant shortages. Critical or strategic minerals are either nonmetallic or metallic elements that play a significant role in the function of modern technology, national security or economies, and that face an inherent risk of supply chain disruption.
Copper is crucial in the development of renewable energy technologies and electric cars while nickel is a major raw ingredient in electric vehicle batteries.
As the world strives to move away from dirty energy sources such as oil and coal to renewable sources, including solar and wind power, metals such as nickel and copper will be integral. However, the world is currently plagued with a copper shortage that is expected to last until 2030.
The global copper shortage has been caused by supply disruption in South America and high customer demand. Nickel has also been in short supply in recent months amid volatility in the global supply chain and high demand for high-grade nickel.
The EU revealed its decision to tag nickel and copper as strategic in its Critical Raw Materials Act (CRMA). The act was met with approval from metals and mining companies alike because it would streamline the permit process and increase access to financing projects deemed strategic.
In addition, the companies noted that industrial metals such as aluminum should also be included to ensure the green transition has a constant supply of required metals needed to make the change.
The VDM Association of German Metal Traders and Recyclers pushed for zinc and aluminum to also be included, stating that as with copper and nickel, these metals also required expedited approval procedures and competitive energy prices.
With the world in the grip of a major energy crisis, the cost of mining and producing these metals, which can be quite energy intensive, has also increased. Roland Harings, CEO of refined copper producer Aurubis, said that while the EU currently produces 15% of the company’s copper needs, that may not continue in the future. Stating that every mine eventually runs out of copper, Harings noted that it is crucial that new mining projects are approved in a timely manner because these project can take several years from approval to production.
Harings also emphasized the importance of fair competition with China and other nations to allow the metals recycling industry to flourish. As long as there is a level playing field and each player in the market adheres to industry standards, Harings said, he has no problems competing with other companies.
The current market dynamics paint a bullish picture for mining companies such as Canada Nickel Company Inc. (TSX.V: CNC) (OTCQX: CNIKF) that are looking to commence commercial production of nickel at their development sites.
NOTE TO INVESTORS: The latest news and updates relating to Canada Nickel Company Inc. (TSX.V: CNC) (OTCQX: CNIKF) are available in the company’s newsroom at http://ibn.fm/CNIKF
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