## Europe and Australia Forge Partnership to Secure Critical Mineral Supply Chain
### Introduction
Amidst the West’s drive to reduce its reliance on China, the EU and Australia have struck a deal to jointly develop a critical minerals supply chain essential for the green and digital transitions.
### China’s Dominance and Europe’s Concerns
China has established itself as a global leader in various cutting-edge technologies, including solar panel production and electric vehicle sales. It is also the bloc’s primary source of raw materials used in a wide range of cleantech applications, from solar panels and wind turbines to electric vehicles.
The EU, in particular, imports 98% of its rare earth supply, 93% of its magnesium, and 97% of its lithium requirements from China. This reliance raises concerns about the bloc’s technological sovereignty.
### Australia’s Critical Mineral Reserves
The partnership with Australia is strategically significant, as the country possesses some of the world’s largest deposits of critical minerals. Australia accounts for 52% of global lithium production and also produces a diverse array of minerals essential for the green transition, including manganese, nickel, copper, cobalt, and rare earth elements.
Cobalt and rare earth elements are also crucial for chip production, which has become the most sought-after commodity, powering the technologies that drive our economies and the world.
Australia holds significant potential for gallium and germanium extraction, two metals vital for semiconductor manufacturing. China produces 80% of the world’s gallium and 60% of germanium. Amidst escalating geopolitical tensions and Western efforts to restrict China’s access to advanced chip-making equipment, Beijing imposed export controls on both these metals last year.
### Partnership Details
Beyond initiatives to boost chip and cleantech production, partnerships are central to the EU’s plan for technological sovereignty. The pact with Australia seeks to facilitate joint projects and research, as well as bilateral investment and trade. It will cover the entire value chain of critical minerals, from extraction and processing to refining and recycling.
### Significance for the Green and Digital Transitions
Critical minerals are indispensable for the development and deployment of renewable energy technologies and next-generation electronic devices. By diversifying its supply, Europe can reduce its reliance on China and ensure a stable flow of these crucial materials.
Additionally, the partnership will foster innovation and collaboration between European and Australian research institutions. This synergy will drive technological advancements, particularly in the areas of sustainable mining practices, mineral processing, and recycling technologies.
### Conclusion
The EU-Australia agreement represents a significant step towards reducing Europe’s dependence on China for critical minerals. The partnership will strengthen the bloc’s technological sovereignty, support the green and digital transitions, and foster economic growth and innovation in both Europe and Australia.