⛏ Are Critical Minerals in The EU The Next Big Rush?

Greetings Contrarian,

This is another Sunday edition, with your most pressing question. Here we go:

Dear Curious-But-Skeptical,

At TNBR we’re super excited about what’s happening in Europe regarding critical minerals. Let’s unpack it.

• Critical minerals are, according to the European Union, minerals that are crucial for their net zero targets (i.e. stuff that goes into EVs, solar, wind power, etc); aerospace and defense (rare earths and such).

So why the excitement with Europe all of a sudden? Well, there is a draft law that should be discussed soon and if approved, put into action called the European Critical Raw Materials Act. The Regulation sets clear benchmarks for domestic capacities along the strategic raw material supply chain and to diversify EU supply by 2030 (here comes the exciting bit):

• At least 10% of the EU's annual consumption for extraction,

• At least 40% of the EU's annual consumption for processing,

• At least 15% of the EU's annual consumption for recycling,

• Not more than 65% of the Union's annual consumption of each strategic raw material at any relevant stage of processing from a single third country.

In summary, Europe would have to go from a negligible amount of mining for this long list of minerals to providing a quite substantial amount of internal consumption.

That move will have to come with easier and faster permitting timelines with clear guidelines that should be followed by all countries.

By logic, permitting a project in country A should be as easy as country B, but we know that it’s hardly ever the case and is something that needs to be figured out, because the clock is ticking and 2030 is just around the corner in mining years.

We are also skeptical that the EU will reach these targets, but by simply trying it, it could give a massive boost, bringing permitting and price advantage to many EU based projects.

You can bet against politicians succeeding to do something great, but it’s a lot more profitable when you watch them try and fail, while you profit all the same.

Happy speculating ,

The Editor

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational/entertainment and is not investment advice or solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.