All sorts in here - strategic industries, environmentalism, government support:

Europe restarts magnesium mining to counter reliance on China 

US-backed Verde to invest $1bn in disused Romanian mine and begin production in 2027 

Europe will restart magnesium mining for the first time in more than a decade, as the EU attempts to reduce its reliance on Chinese imports of critical raw materials. 

 EU member Romania on Friday awarded a mining concession to Verde Magnesium, a Bucharest-based company backed by US private equity investor Amerocap. Verde intends to invest $1bn in a disused magnesium mine near the city of Oradea and build processing facilities that would use renewable power and also recycle aluminium. 

 More than 90 per cent of the bloc’s magnesium — crucial for making lightweight aluminium alloys used in cars and packaging — is imported from China. Europe’s aluminium industry in 2022 was severely disrupted when Chinese production temporarily shut down because of high energy prices, triggering warnings of plant closures in the bloc.

 Bernd Martens, chair of Verde Magnesium and former Audi director, told the Financial Times the mine and plant in Romania would help Brussels fulfil 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 which can support Europe’s transition towards a carbon neutral economy,” Martens said. 

 Verde will use the site of a magnesium mine that was shut in 2014 — at the time the last one operating in Europe. It intends to start production by late 2027 and reach 90,000 tonnes a year, half of EU supply, and 9 per cent of global production. 

 The company is likely to apply to EU funding mechanisms, after it was named as a key investment by the European Raw Materials Alliance — an industry network backed by the European Commission. 

 About 87 per cent of the global supply of magnesium, and 95 per cent of European consumption, comes from China, which has cut output drastically to save power as prices rise. 

 The EU has set ambitious goals under the Critical Raw Materials Act. It wants to mine 10 per cent of the EU’s critical mineral consumption, process 40 per cent of it and recycle 15 per cent of it by 2030. 

 The act also makes permitting easier and prioritises strategic projects for funding, but has been criticised for falling behind the US in terms of giving financial support to projects. 

 Martens expressed confidence that magnesium mining would restart, despite local opposition and environmental challenges that have plagued previous projects. Last month, Romania won an international arbitration case waged by Canadian-listed mining group Gabriel Resources, which was seeking $4.4bn of compensation over a planned gold mine in the country that was successfully blocked by environmental groups.

All things gigafactory - investment vs red tape

 Great little piece on the problems Elon Musk faces getting his European plant up and running. The issues raised are quite substantial:

What's happening with Tesla's $7 billion German 'gigafactory'?

Next Thursday, July 1, was supposed to be a day of celebration for Tesla: the opening of its self-styled 'gigafactory' in the tranquil German municipality of Gruenheide.

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22 Jun 2021

Next Thursday, July 1, was supposed to be a day of celebration for Tesla: the opening of its self-styled "gigafactory" in the tranquil German municipality of Gruenheide, just outside Berlin.

But thanks to fierce environmental resistance, red tape and planning tweaks it is completely unclear when the first vehicles will roll off the production line of the electric carmaker's first European factory.

Tesla has already pushed back the expected opening to late 2021. Yet the environmental agency in Brandenburg, the state where the 5.8 billion euro ($6.9 billion) plant is being built, has still not given final approval - meaning a further delay cannot be ruled out, even into 2022.

WHAT'S THE PROBLEM?

It's complicated.

Tesla and its billionaire boss Elon Musk unveiled plans in late 2019 to build the factory.

However the site partly overlaps a drinking water protection zone and borders on a nature reserve, which has drawn heavy opposition from local residents and environmental groups.

Last year, Tesla had to suspend clearing of a forest at the site after environmentalists from local group Nabu highlighted the risk posed to a rare local snake species whose winter slumber could be disturbed by tree-cutting activity.

The snakes had to be rescued before Tesla could proceed but there have been numerous other efforts to stop work at the site on environmental grounds.

"Thousands of hectares of forest will be cleared to create the needed infrastructure and housing space," said Manuela Hoyer, who lives about 9 km from the site and is a member of a local campaign opposed to it.

"To build such a plant in a protected drinking water area is actually a crime against the environment."

Her comments reflects a broader trend in Germany that has also seen renewable projects, such as wind farms, coming under fire from residents that fear the impact on the local habitat.

IS THAT REALLY IT?

No.

Bureaucracy has been a headache for Tesla, too, pitting the company's hands-on approach against Germany's infamous red tape.

So far, Tesla is working based on preliminary construction permits, with large factory halls and structures already built on the 740 acres of land it bought for 43.4 million euros.

But only when Brandenburg's State Environmental Agency provides the final permit can the plant be opened.

While it has previously said that it cannot say when that is every project that has obtained preliminary permits in Brandenburg eventually received the final ok.

But that's not discouraging environmentalists from throwing spanners in the works.

Last week Gruene Liga and Nabu submitted an injunction to a German court against provisional building permits for site, in the latest attempt to ensure Tesla is adhering to environmental laws.

"I think there could be less bureaucracy, that would be better," Musk said during his last visit to Gruenheide in May, markedly less enthusiastic than his "Deutschland rocks" verdict eight months earlier.

THE BATTERY CELL PLANT

Tesla's construction plans had to be fully resubmitted earlier this month to reflect the addition of battery cell production to the site, costing valuable months.

The Gruenheide plant comprises several units to handle component manufacturing and final vehicle assembly, including a press shop, foundry and body production.

It also includes a water recycling facility, a local fire brigade as well as a depot to ensure more efficient transport of components and other goods. Under the plans, the site's power needs are to be met via local renewable energy sources.

But adding battery cell production meant the company had to tweak and refile the whole application. Based on the most recent version, the plant will have the capacity to produce 500 million cells totalling 50 gigawatt hours (GWh) a year.

That's more than the 40 GWh facility rival Volkswagen plans to set up about 300 kilometres west in Salzgitter near its home base.

DOES ANYONE SUPPORT THE FACTORY (APART FROM ELON)?

Yes.

Tesla's move is seen as a major boost to eastern Germany, which has struggled with high unemployment rates and difficulties to attract large industrial firms.

Once fully up and running, the plant, which Tesla said will be the "most advanced high-volume electric vehicle production plant in the world", is expected to create 12,000 jobs and have a capacity of up to 500,000 cars a year.

"We're in favour of a shift towards emission-free mobility and the cars needed to achieve that must be built somewhere," said Ralf Schmilewski, a member of the Greens Party in Gruenheide's neighbouring town Erkner.

He said Tesla's plans also address a demographical issue, which has seen younger generations to leave the structurally weak area in their desperate search for jobs.

"Now they have a perspective and don't have to move."

SO WHAT'S NEXT?

Until mid-July, members of the public can sift through the roughly 11,000 pages of Tesla's application documents, including blueprints, tables and calculations, in the town hall of Gruenheide, the third time they have been put on display.

As part of the process, anyone can file objections until Aug. 16, before the Brandenburg environmental agency decides whether a public discussion should take place on Sept. 13.

When the documents were last made available publicly, in 2020, more than 400 objections were raised.

After that there is no clear timeline. At some point the agency is expected to grant final approval - but when is anyone's guess.

($1 = 0.8410 euros) (Reporting by Nadine Schimroszik and Christoph Steitz; Editing by Pravin Char)

Copyright (2021) Thomson Reuters. This article was written by Nadine Schimroszik and Christoph Steitz from Reuters and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.

Trade & the environment - good counterintuitive thinking:

 10 June 2021

Free trade can be good for the environment – here’s how

By Eamonn Ives @EamonnIves

Photo: Getty Images

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•   Lugging goods around the world in container ships isn't as bad for the environment as you might think
•   Free markets make us more innovative, efficient and help us to tread more lightly on the planet
•   Cutting tariffs on all environmental goods would show the Government is serious about a green, global Britain

Readers of this site will need no convincing of the benefits of international free trade for economic growth. In a list of reasons why global poverty rates have nosedived since the mid-twentieth century, it ranks as number one.

What is less well understood, however, is the dynamic between international free trade and green objectives. Indeed, if it is considered at all, it is usually in a negative light – after all, how can lugging goods halfway around the world on a container ship ever be good for the environment?

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A new report, published today by the Centre for Policy Studies, seeks to counter that narrative. We identify a host of reasons why international free trade can actually help us all to tread more lightly on the planet.

Our first argument in support of the environmental credentials of free trade draws upon the work of two renowned British economists. David Ricardo, in the early 19th century, popularised the notion of comparative advantage. He lucidly set out why it makes sense for countries to produce that which they are most adept at, and then trade the fruits of their labour with each other. His theory boils down to the idea of productive efficiency, an obviously important concept in environmental economics – given how much of what we consume is originally derived from the natural world (be that food, timber, minerals and metals, and so on). If we can produce the goods we demand in as efficient a way as possible, it stands to reason that pressures on ecosystems will diminish as a result.

Writing decades before Ricardo was Adam Smith, who famously expounded his theory of the division of labour, and how it can beget enormous increases in productivity. By allowing individuals to specialise they can turn any given bundle of resources into more useful goods than a novice could. Again, this process of maximising efficiency can help the environment by ensuring we eek out as much as possible from as little as possible – conserving nature and minimising our footprint on the planet.

Smith didn’t stop there, however – and this brings us onto our second argument. In what has turned out to be an incredibly pertinent passage, the economist notes how it would, technically, be possible to grow grapes in Scotland – provided they were sufficiently shielded from the elements and kept warm artificially. But – as I have noted before on these pages – Smith explains to do so would be 30 times as costly as simply importing grapes from more hospitable climes. Even in the 18th century, it was apparent that it can often be better from an environmental perspective to import goods from places where they occur naturally, than trying to produce them for oneself locally.

A more contemporary example might be how it could make environmental sense for a country not blessed with renewable energy resources – such as abundant sunshine – to import energy-intensive goods which have been made in countries which do. Imported hydrogen made via solar powered electrolysis, for instance, will almost certainly be better for the climate than locally produced hydrogen made via fossil fuels. One must remember that the ability to do this, however, is entirely predicated on nations being able to trade freely with each other. Without free trade, the whole proposition collapses. 

Our third argument is that free trade is essential for the development and spread of technologies which will allow us to put an end to all sorts of environmental issues. Britain is a scientific superpower, boasting first-rate research labs and universities which have produced a host of emissions busting innovations. But nobody would suggest the country has been able to do it in isolation. Ideas and components have had to be shared across borders. Iconic environmental technologies – from solar panels to electric vehicles – have complex supply chains which stretch around the world, critically reliant on international trade to ship parts and raw materials to where they need to be. 

So international trade doesn’t have to be the object of fear some environmentalists are keen to make it out to be. Thankfully, those in government seem well aware of this, and have already made good headway on staking out a policy platform which simultaneously boosts trade flows and protects the environment. 

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But that isn’t to say ‘job done’. And to that end, our report culminates with a series of recommendations the Government should adopt to further liberalise trade policy and reap the environmental benefits. For the sake of brevity, I’ll focus on just one here – cutting tariffs on all environmental goods and services. 

Last year, while the UK Global Tariff removed import taxes on hundreds of green goods, it stubbornly left some in place for select items. Hybrid vehicles, for instance, still attract a rate of 10%, while bicycles must pay 14%. Tariffs are nothing more than economic self-harm, and particularly when levied on green goods, environmental self-harm too. They should be junked as quickly as possible.

The Government is always at pains to promote the idea of ‘Global Britain’. But in truth, the message has often rung hollow – an admirable gesture, but one lacking in real substance. That needn’t be the case going forward. As Britain hosts the G7 and COP26, the Government has the perfect opportunity to demonstrate its leadership on climate change in global conversations – and make the case that free trade is the key to global prosperity and a green future.

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What a rich weekend for reading material

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The Sunday newsletter from Project Syndicate. View this message in a web browser. SUNDAY, DECEMBER 6, 2015 This week at Project Syndicate, Mohamed El-Erian examines the policy disparity between the Fed and the ECB, Nouriel Roubini hopes that the threats facing Europe lead to greater solidarity, Carl Bildt argues that the roots of the Middle East's current conflicts lie in the collapse of the Ottoman Empire, and more. Join the discussion. The Great Policy Divergence Mohamed El-Erian worries about the international repercussions as the Fed and the ECB move in opposite directions. Europe's Barbarians Inside the Gate Nouriel Roubini argues that the main threat confronting the EU is its dearth of unity. Preserving the Ottoman Mosaic Carl Bildt warns against attempting to impose new borders in the Middle East. From the MIT Press   Greening the Global Economy By Robert Pollin "In clear and readable prose, Robert Pollin details how, contrary to the insidious claims of Big Oil, burning fossil fuels at current rates is bad for the economy, bad for the environment, and bad for the poor. Greening the Global Economy powerfully demonstrates that investing in efficiency and renewable energy generates a far better standard of living than the current alternative – abject and massive dependency on fossil fuel." – Jerry Brown, Governor of California China's Twin Challenges Adair Turner is losing confidence that the country's leaders will manage the debt dilemma they face. Managing a World of Great Powers Javier Solana says that rivalry among the US, Russia, and China need not block collaboration on major challenges. The Right Price for Preserving Our Climate Christine Lagarde shows why "smart" taxes to cover the full cost of fossil fuels is essential to curbing their use. From Good Intentions to Deep Decarbonization Jeffrey Sachs worries that the Paris climate talks will embrace short-term solutions that negate long-term goals. The Syrian Knot Joschka Fischer believes that peace is possible, but not with Bashar al-Assad or ISIS still on the scene. The Politics of Islamophobia Ian Buruma finds striking parallels in the political use of fear by Islamic State and Western politicians. Blinded By ISIS Shlomo Ben-Ami argues that the Islamic State is a symptom of a deeper problem that a ground invasion cannot fix. Project Syndicate publishes and provides, on a not-for-profit basis, original commentary by the world's leading thinkers to nearly 500 media outlets in over 150 countries. This newsletter is a service of project-syndicate.org. © Project Syndicate, all rights reserved. Unsubscribe from this list