Europe will resume the extraction of magnesium for the first time after more than a decade, in the context in which the EU tries to reduce its dependence on imports of essential raw materials from China, reports the Financial Times, quoted by Rador Radio Romania.
Romania, an EU member, on Friday granted a mining concession to the Bucharest-based company Verde Magnesium, which is backed by the American private equity firm Amerocap.
Verde Magnesium plans to invest $1 billion in a disused magnesium mine near Oradea, also building processing facilities powered by renewable energy and recycling aluminum as well.
The EU imports more than 90% of its magnesium requirements from China, which is essential for the production of light aluminum alloys used in vehicles and packaging. The European aluminum industry has been severely disrupted in 2022 due to the temporary shutdown of production in China following the explosion in energy prices, prompting warnings that EU plants may close.
Verde will use a magnesium mine that closed in 2014 – at the time the last operational one in Europe. It wants to start production by the end of 2027 and reach 90,000 tonnes per year, which is 50% of EU demand or 9% of global production.
The firm is likely to turn to EU funding after the investment was declared of critical interest by the European Raw Materials Alliance – an industry network supported by the European Commission.
About 87 percent of global magnesium supply and 95 percent of Europe’s consumption comes from China, which has cut production sharply to save money as electricity prices rise.
The EU has set ambitious targets through the Essential Raw Materials Act. By 2030, it wants to extract 10% of the EU’s consumption of essential minerals on its own, process 40% on its own and recycle 15%.
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