EU starts magnesium mining for the first time in over a decade

Europe will restart magnesium mining for the first time in over a decade in an effort to reduce its dependence on Chinese imports of key raw materials. EU member Romania last week awarded a mining concession to Verde Magnesium, a Bucharest-based company backed by the American private investor Amerocap.

Verde intends to invest one billion dollars in an abandoned magnesium mine near the city of Oradea and build processing facilities that would use renewable energy and also recycle aluminum. Currently, more than 90 percent of magnesium in the Union, which is crucial for producing lightweight aluminum alloys used in cars and packaging, is imported from China.

Bernd Martens, president of Verde Magnesium and former Audi director, told the Financial Times that the mine and factory in Romania will help Brussels achieve its goal of greater independence for vital metals needed for the green transition.

– The European industrial sector has an acute need for a reliable supply of critical and strategic metals, especially those with a lower carbon footprint than current imports that can support Europe’s transition to a carbon-neutral economy – said Martens.

Verde will open a magnesium mine that has been closed since 2014, which was the last operating mine in Europe. The company aims to start production by the end of 2027 and reach 90,000 tons annually, which would be half of the supply to the EU, but would also account for 9 percent of global production. The company is likely to apply for EU funding mechanisms after being designated a key investment by the European Raw Materials Alliance – an industrial network supported by the European Commission.

Breaking China’s Hold

About 87 percent of the global magnesium supply and 95 percent of European consumption comes from China, which has drastically cut production to save energy as prices rise. At the same time, Europe has set ambitious targets under the Critical Raw Materials Act, aiming to mine 10 percent of critical mineral consumption in the EU, process 40 percent, and recycle 15 percent by 2030.

The Critical Raw Materials Act also facilitates permitting and prioritizes strategic projects for funding, but has been criticized for lagging behind the U.S. in providing financial support for projects.

Moreover, although all permits have been collected, local residents oppose due to environmental challenges that have plagued previous mining projects in the area. Despite this, Martens expressed confidence that magnesium mining will restart despite local opposition.

Romania last month won an international arbitration led by the mining group Gabriel Resources listed on the Canadian stock exchange, which sought $4.4 billion in damages for a planned gold mine in the country that was successfully blocked by environmental groups.