CTIPs? How the New Acronym Can Turn Europe’s Minerals Diplomacy Around

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Final Up to date on: nineteenth March 2025, 03:15 am

The EU must be extra strategic in its alternative of companions, whereas balancing its personal strengths with the associate nations’ wants.

A brand new acronym is born in Brussels: CTIP. These “Clean Trade and Investment Partnerships” promise to take Europe’s useful resource diplomacy to new highs. The EU Clean Industrial Deal commits to launching these partnerships to “diversify supply chains and forge mutually beneficial deals.”

However numerous related tasks exist already. Most notably, strategic partnerships, thus far signed with 14 nations from Chile to Zambia, in addition to devoted chapters on uncooked supplies below numerous free commerce agreements.

However regardless of quite a few partnerships and memorandums of understanding, the EU’s progress in crucial minerals diplomacy has been under-whelming. It doesn’t must be this manner because the EU will get higher at utilizing its monetary, technological and diplomatic leverage.

So, how can this new device flip the continent’s minerals fortunes round whereas benefitting useful resource wealthy nations?

Firstly, the EU must grow to be extra strategic about selecting companions for these partnerships. Answering questions on the place the largest alternative is and who our pals are or may be ought to information this.

We aren’t a world behemoth relating to minerals diplomacy or international funding. China invested over $16 billion into mines globally in 2023 alone, principally in Africa. Its corporations management nearly all of the nickel processed in Indonesia, the world’s largest producer. The US began to catch up shortly below the Biden administration.

Now Europe wants to seek out its area of interest. The Philippines is one alternative. The nation is the second largest nickel miner however has till now exported its ores to Indonesia for processing. That is set to vary shortly because the nation has simply passed a law to ban uncooked nickel exports to encourage extra native worth from processing. That is the proper time for the EU to return in, help the nation’s worth addition targets and share its personal coverage expertise of putting in higher governance and minerals requirements.

Strategic evaluation ought to be achieved for key nations and uncooked supplies, taking into consideration the geopolitical and financial issues. There isn’t any time to easily waft.

Subsequent, the EU wants to higher perceive its personal strengths and the way they match associate nations’ wants.

It’s clear that one of many prime issues resource-rich nations need is finance to develop their sources. Most of them are thought of excessive threat, so that they battle to safe low-cost loans. Europe nonetheless has a whole lot of monetary energy, together with massive banks and export credit score businesses, resembling KfW in Germany. These ought to be delivered to the desk as a part of any future CTIP, with the European Fee and governments offering public threat ensures.

And what higher leverage than changing into an investor itself? The Fee ought to revamp its Global Gateway programme to permit it to function extra like a improvement finance establishment. It ought to go so far as to take stakes in key strategic tasks straight.

Most resource-rich nations additionally need to cease straight exporting their minerals and as an alternative search to construct their very own industries and add extra native worth. Speaking about worth add shouldn’t be new, however we should transfer from phrases to motion.

The EU has a whole lot of wonderful know-how and firms, e.g. in inexperienced power, infrastructure and chemical compounds. Getting our wind champions to construct wind farms in World South nations — as Vestas did in Kenya — not solely helps their inhabitants entry inexpensive power; it additionally creates new export progress alternatives for the EU. Serving to nations develop their very own industrial insurance policies and permitting them to prioritise native suppliers can deliver even more benefits.

Lastly, does the above imply we must always overlook about upholding excessive requirements and environmental stewardship? Under no circumstances. With leverage over tasks comes the ability to manage the circumstances below which they’re working.

However this can’t be a pure finger wagging train. The company due diligence and deforestation legal guidelines are the proper frameworks to spur motion, however much more is required to assist World South nations profit from them.

This implies offering monetary and know-how help to roll out higher water and waste remedy services, e.g. turning harmful tailings dams into safer underground backfilling services. This additionally means working with nations and smaller corporations in World South nations to elucidate, prepare and assist implement among the extra advanced necessities.

It’s clear the EU must up its sport relating to minerals diplomacy, and the brand new Clear Commerce and Funding Partnerships may effectively be the reply. To succeed, these should be strategic, centered on precise tasks on the bottom and steadiness the EU’s strengths with associate nations’ wants.

By Julia Police Canova, Senior Director, Autos & Emobility Provide Chains. From T&E.