Tucked away in the Bosnian mountains about an hour from the capital Sarajevo, one of the biggest new mining projects in Europe is nearing completion.
The Vares silver and zinc mine, run by London-listed Adriatic Metals, is due to start production this year.
It will be one of the few major sites on the Continent developing metals crucial to the green revolution – and, its backers say, is a project desperately needed to stop China establishing total dominance over increasingly important resources.
Vares has won support on the ground because it has helped to boost the local economy. But international investors, politicians and manufacturers are championing it because a project like this in Europe could lessen China’s stranglehold on materials needed for the green revolution, even if just a bit.
Silver, whose conductivity makes it ideal for use in wind turbines, and other traditional metals such as copper will be crucial.
Digging deep: The Vares silver mine burrows into the Bosnian mountains
But so will a group of materials known as ‘critical’ metals and minerals. These include lithium, used in batteries, rare earth minerals used in electric car magnets, cobalt, most notably used in iPhones, and a slew of others. Some senior industry figures fear China’s lead in this sphere is a greater threat to the West than its strides in technology or a possible invasion of Taiwan.
The world in 2040 is expected to need four times as much of these critical metals as it does today to build green technologies if it is even to come close to meeting net zero carbon targets.
The UK and the European Union have woken up to how badly the West is lagging in terms of its supply, and of the risks of being dependent on China. Both have scrambled to publish strategies laying out policies and potential funding channels.
The EU has arguably been more engaged, starting on a strategy more than a decade ago. The UK blueprint, released last year, sketched out plans to turn it into a mining powerhouse, including investing in processing plants, opening mines and setting up factories to recycle green materials. Asked if the UK and Europe should be mining more, Peter Handley, head of the European Commission’s Critical Raw Materials Unit, says: ‘Where better to ensure mining, refining and recycling critical raw materials is done sustainably than on our own territory?
‘The green and digital transitions will massively increase our need for these materials, and access is not at all a given. The economies of the future will no longer rely on oil and coal, but on lithium, silicon and rare earth pigments.’
A strategy is one thing, executing it is another, says George Bennett, head of London-listed Rainbow Rare Earths, adding: ‘The plans are great, but they haven’t materialised yet.’
Rainbow has a mine in South Africa, and the US government is effectively an investor as it backs one of Rainbow’s major shareholders. The European Bank for Reconstruction and Development is an investor in Adriatic’s venture. In the UK, a lot of support has been via grants.
The deposits being evaluated in Britain include lithium in Cornwall, where there could be huge reserves. A new mining era in the county came a step closer last week when start-up British Lithium agreed a deal with a French miner. The project could employ 300 people and produce enough lithium for 500,000 electric cars a year by 2030. A rival, Cornish Lithium, which plans to extract lithium from geothermal waters, needs to raise cash to keep going.
Unlike in China, opening mines in the UK or EU can be controversial and attract protests, and there is no guarantee projects will win approval. But developing them is ‘absolutely necessary’ to help lessen dependence on China, says Adriatic’s chief executive, Paul Cronin.
Jeff Townsend, head of the Critical Minerals Association, says: ‘China started its critical mineral strategy in the 1970s. It knows it’s got a diplomatic and economic weapon. At this stage, you cannot stop China dominating the scene – but you can stop it from controlling it.’
