Critical Metals, a newly established company, is set to construct the European Union’s first battery-grade lithium mine, the Wolfsberg Lithium Project, located in Austria. The project is expected to become a significant source of battery-grade lithium concentrate, filling a critical gap in the European electric vehicle (EV) battery supply chain. The mine is uniquely positioned to capitalize on its location in the heart of the EV supply chain, minimizing environmental impact by repurposing a former Austrian government-constructed lithium mine containing a substantial amount of battery-grade lithium. Furthermore, European Lithium has entered into a Memorandum of Understanding (MOU) for a key customer arrangement with BMW AG, potentially creating one of the largest direct pre-pays from an original equipment manufacturer (OEM) in Europe’s lithium mining industry. A definitive feasibility study is expected in early 2023, aiming to supply lithium concentrate at a commercial scale and be economically viable.
The European Union has set targets to dig up, recycle, and refine lithium, cobalt, and other metals it needs for its green transition. However, the bloc faces challenges in achieving these goals due to a shortage of new money, high energy costs, and local opposition. The Critical Raw Materials Act (CRMA), due to enter force in early 2024, aims to reduce the EU’s reliance on China, which dominates global mineral processing and has already threatened EU supply with export curbs. The CRMA aims to speed up the granting of project permits, but other obstacles remain, such as the need for cheaper energy and EU financing.
Several European lithium mining and refining projects are poised to launch commercial operations next year, supported by a push among original equipment manufacturers (OEMs) to regionalize their battery supply chains and reduce dependence on imported material. Based on existing plans, Europe’s annual lithium processing capacity is set to reach approximately 650,000 mt/year by 2028, with more than 20 projects currently advancing their mining and refining operations toward full-scale commercial production. The growth of Europe’s domestic lithium industry comes amid growing concern about an impending global shortfall in the supply of graphite, copper, cobalt, and nickel.
