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The European Union and Australia signed a memorandum of understanding (MoU) on 28 May 2024 to cooperate on critical and strategic minerals. This MOU comes at a time as the EU tries to diversify its suppliers away from China and Russia and transform its economy to reduce CO2 emissions. The agreement covers exploration, extraction, processing, refining, recycling, and processing of extractive waste "Australia is ... a global leader when it comes to critical raw materials," EU Commission Vic President Valdis Dombrovskis said in a statement. It calls for co-operation on environmental, social and governance issues, includingaligning international mineral pricing with high ESG standards, strengtheningsupply chain transparency and promoting market recognition for high ESGstandards. This arrives at an important time, on the same week as the EU CRM Act went live designating EU strategic projects with a capacity to extract, process and recycle strategic raw materials and diversify EU supplies from third countries. Projects in Australia may qualify as strategic if they assist the EU with the regulation that no more than 65% of the EU’s annual consumption of a strategic raw material can be imported from a third country outside the EU. The EU signed similar agreements with Canada and Ukraine in 2021, Kazakhstan and Namibia in 2022, with Argentina, Chile, Zambia, the Democratic Republic of Congo and Greenland in 2023 and with Rwanda, Norway and Uzbekistan earlier this year. 
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DroneShield (ASX: DRO) is a worldwide leader in counter-UAS security and technology. DroneShield develops pre-eminent UAS security solutions that protect people, organisations, and critical infrastructure from intrusion from UAS threats. Its leadership brings world-class expertise in engineering and physics, combined with deep experience in defence, intelligence, and aerospace. DoneShield is very well supported by German and European investors with its dual-listed shares often seeing volume of over 8 million shares a month on German trading exchanges such as Frankfurt, Tradegate, and Hamburg. We expect interest to continue to increase for ASX listed companies with a German dual-listing that have significant or interesting European operations or contracts. In October 2023, it was announced that DroneShield had been awarded AU$10 million from the Australian government to supply C-UAS equipment to Ukraine as part of an effort combat Russian attacks. Earlier this week the Company announced announce it has received a repeat order of A$5.7 million from a US Government customer for a number of its C-UxS (Counter-UxS) systems. C-UxS refers to counter-drone systems targeting multi-domain aerial, ground and maritime surface drones. Euronews reported in November 2023 that IFM Investors, owned by a collection of 17 Australian pension funds such as Hesta, Vision Super and CareSuper among others, have pledged $12.6 billion (€11.51 billion) for UK energy and infrastructure projects in a deal that is likely to cover projects until 2027.
Australian Superannuation fund Aware Super has also that it will be allocating $6.6 billion to its London office, primarily towards infrastructure, real estate and private equity projects. This is in addition to the $17 billion the company has already put into the UK and EU. Green Investments, which Macquarie acquired in 2017 and which started out as the UK's Green Investment Bank in 2012, has committed or arranged more than £26 billion ($32.4 billion; €30.4 billion) in green energy projects, primarily in OECD countries. We expect this surge of investment into Green infrastructure projects incorporating clean energy, hydrogen, energy and technology to continue. Europe works very differently to Australia in many respects.
Relationships and business etiquette are vital when building relationships, networks and collaboration opportunities in Europe. This sometimes takes time and patience which can be difficult to understand for executives used to a faster pace from Australia and North America. It is worth engaging with Europe - European GDP is around $26 billion and represents about one sixth of the global economy. The lesson for Australian companies wanting to engage in Europe is take time, discuss opportunities, create networks and relationships, explore working with an EU partner, understand the cultures and way of doing business and respect the EU way of doing things. It is a shame more Australian companies are not active in Europe - we hope this will change and we are here to help. A call for applications on strategic projects under the Critical Raw Materials Act is open as of 23 May 2024.
The first cut off date is 22 August 2024, 12:00 CEST. Strategic projects make a meaningful contribution to the security of the Union’s supply of strategic raw materials. They are or will become technically feasible within a reasonable timeframe, showing expected production volumes, and implemented sustainably with a sufficient estimated confidence level. The Commission considers strategic projects of public interest due to their importance in ensuring the security of the supply of strategic raw materials and safeguarding the functioning of the internal market. A list of 34 CRMs, including 17 strategic raw materials (SRMs) has been created and all are materials expected to grow exponentially in terms of demand. The final list of CRMs (with SRMs* highlighted in bold) presented below will be reviewed regularly. 1. Aluminum/Bauxite/alumina 2. Coking Coal 3. Lithium 4. Phosphorus 5. Antimony 6. Feldspar 7. Light rare earth elements* 8. Scandium 9. Arsenic 1 10. Fluorspar 11. Magnesium 12. Silicon metal 13. Baryte 14. Gallium 15. Manganese 16. Strontium 17. Beryllium 18. Germanium 19. Natural Graphite 20. Tantalum 21. Bismuth 22. Hafnium 23. Niobium 24. Titanium metal 25. Boron 26. Helium 27. Platinum group metals 28. Tungsten 29. Cobalt 30. Heavy rare earth elements* 31. Phosphate Rock 32. Vanadium 33. Copper 34. Nickel The Criticial Raw Materials Act an important step forward by the European Union to address the challenges of secure and sustainable access to critical raw materials. The CRMA’s provisions are significant as a mix of industrial policy instruments together with financial and economic assessment will create a pool of projects able to sustain European requirements for CRM's for energy, decarbonisation and electrification for years to come. German Foreign Minister Annalena Baerbock in her first visit to Australia told the ABC that Germany had overhauled its approach to China so as to avoid relying too heavily on it for imports. The shift in policy means Germany will prioritise dealing directly with democratic nations, such as Australia, on critical minerals exports. Ms. Baerbock said “Lithium comes from Australia then it’s being exported to China, processed there, and then we import it again...The smartest thing, not only for diversification, but also strengthening ties between democracies, and free markets, would be if we could import the lithium directly from Australia.” |
AuthorMatthew Reynolds. Archives
November 2024
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