Sixty Projects and a Gulf Detour: How the EU's Critical Minerals Push Is Running Ahead of Its Own Reality

Introduction

In a basement conference room in Riyadh's King Abdullah Financial District, on a January morning thick with the administrative energy of the Future Minerals Forum, a small delegation of European Commission officials and Saudi ministry representatives gathered for a meeting that had no precedent in the institutional calendar of either party. It was the first EU–Saudi Arabia Business and Investment Dialogue on critical raw materials value chains, convened under the banner of the EU–GCC Cooperation on Green Transition Project, and it was, by any honest accounting, a tentative first handshake between two parties who had spent the better part of a decade watching each other from a careful distance. The Saudi representative, Al-Babtain, spoke in the measured cadences of someone who understood that the real negotiation had not yet begun. "Developing globally competitive mineral hubs and sustainable value chains is a central pillar of Saudi Vision 2030 and the Kingdom's industrial transformation," he said. "Enhanced cooperation with the EU, capitalizing on the demand dynamics of the EU Critical Raw Materials Act, will be key to delivering long-term value for both sides."

The meeting lasted the better part of an afternoon. No binding agreements were signed. But for the European officials in the room, including Valere Moutarlier, the Commission's deputy director-general for European industry decarbonisation, the dialogue represented something more than diplomatic courtesy. It was a signal that the EU was willing to look beyond its traditional transatlantic and Indo-Pacific partnerships, to shop for financing relationships in a region that had historically been oriented toward China and, more recently, toward the United States.

The Riyadh meeting was one small data point in a far larger story: the EU's Critical Raw Materials Act, adopted in April 2024 and now nearly two years into implementation, has produced its first generation of designated Strategic Projects, 60 in total, and is being tested by the distance between the ambitions written into law and the structural realities governing global supply chains. That distance, it turns out, is considerable.

The Architecture of 60: What the Projects Actually Look Like

The number itself carries a certain rhetorical satisfaction. Sixty Strategic Projects, spanning 13 EU member states and partner countries from Canada to Zambia to Malawi, suggests an industrial policy apparatus that has moved from legislation to execution. The first cohort of 47 EU-based projects was designated by Commission decision on March 25, 2025. A second tranche of 13 external projects followed on June 4, 2025, completing the portfolio. Together, they represent a combined capital requirement of roughly 28 billion euros: 22.5 billion for the domestic portfolio and 5.5 billion for the external one.

The material focus tells its own story. Lithium accounts for 32 percent of the project portfolio, graphite for 25 percent. This is deliberate. The EU currently has negligible domestic extraction or processing capacity for either material, and both are essential to the battery value chains that underpin the bloc's electric vehicle and energy storage ambitions. The CRMA's stated targets are stark: EU demand for lithium is projected to increase twelve-fold by 2030 and twenty-one-fold by 2050. For rare earth metals, a six-fold increase is expected by 2030. Against those numbers, 60 projects is a beginning, not a solution.

The geographic spread of the domestic projects covers Belgium, France, Germany, Italy, Spain, Estonia, Czechia, Greece, Sweden, Finland, Portugal, Poland, and Romania. Among the externally designated projects, Canada, Kazakhstan, and Ukraine appear alongside more unexpected names: Malawi, Madagascar, and Greenland. The Sarytogan Graphite Project in Kazakhstan, promoted by Sarytogan Graphite Limited, aims to supply battery-grade graphite. The Songwe Hill Rare Earths project in Malawi, promoted by Mkango Resources Limited, targets rare earth elements for the magnet supply chain. In Alsace, Eramet's Ageli project combines geothermal energy production with battery-grade lithium extraction from deep brine, with production expected around 2030.

One of the most closely watched EU-based projects is Vulcan Energy's lithium and geothermal operation in Germany, which has secured a 250 million euro commitment from the European Investment Bank. In Greenland, the Malmbjerg molybdenum project could, if it reaches full production, satisfy roughly a quarter of total EU molybdenum demand. These are not marginal additions to the European industrial base; they are, on paper, transformative. The question that auditors and analysts are increasingly pressing is whether the paper and the reality will converge before the decade runs out.

The Auditors' Warning and the Reality Gap

In February 2026, the European Court of Auditors released Special Report 04/2026, and it did not arrive gently. The ECA concluded that the EU's diversification efforts and CRMA implementation were unlikely to deliver the targeted supply security on their current trajectory. The language was clinical, but the message was pointed. "There is still a long way to go to meet the targets, and the EU will struggle to secure the supply of the strategic raw materials it needs by the end of the decade," the auditors wrote. ECA Member Keit Pentus-Rosimannus was more direct: "Without critical raw materials, there will be no energy transition, no competitiveness, and no strategic autonomy."

The audit identified what it called a raw materials trilemma. Import diversification is not producing tangible results; domestic production is hitting bottlenecks; and recycling remains, in the ECA's words, "in its infancy." The recycling figures are particularly sobering. The CRMA envisions that 25 percent of the EU's strategic raw material consumption will come from recycled sources by 2030, but seven of the 26 materials needed for the energy transition currently have recycling rates between one and five percent, while ten are not recycled at all.

ODI Europe's analysis of the 60 Strategic Projects adds granular texture to the ECA's structural critique. Of the 60 projects, 14 are unlikely to contribute meaningfully to the 2030 targets because their estimated production start dates fall between 2029 and 2031, leaving almost no margin for the supply to be integrated into European value chains within the target window. More troublingly, of the projects expected to begin production between 2025 and 2027, three out of four are either behind their projected schedule or impossible to verify using current public evidence. As the ECA noted, several projects received CRMA Strategic status while still at an early stage of development, a tension that sits uneasily with the Act's core expectation that designated projects should make a meaningful contribution to 2030 targets.

The processing gap may be the most acute vulnerability. The CRMA requires that 40 percent of the EU's consumption of strategic raw materials be processed domestically by 2030. The ECA found that processing capacities are actually contracting in some sectors, partly because of high energy costs that undermine European competitiveness relative to Asian refining hubs. Four strategic raw materials central to the energy transition, lithium, magnesium, gallium, and rare earth elements, already exceed the CRMA's 65 percent single-country concentration threshold at the processing stage. The bloc is nominally trying to diversify away from dependency, but the processing infrastructure to make that diversification real is, in several critical areas, heading in the wrong direction.

The low commodity price environment has not helped. Lithium prices, which had surged eightfold during 2021 and 2022, fell by more than 80 percent from their 2023 peak. Graphite, cobalt, and nickel prices dropped between 10 and 20 percent in 2024. Investment in critical mineral development slowed to a growth rate of just 5 percent in 2024, down from 14 percent in 2023. For project promoters trying to attract private capital to early-stage extraction or processing ventures in higher-cost jurisdictions, the arithmetic has become difficult. Capital costs for new projects in emerging producer regions are typically 50 percent higher than in incumbent producer countries, and when commodity prices are depressed, the financial case for those investments narrows sharply.

China's Grip and the 2035 Horizon

Whatever progress the CRMA Strategic Project portfolio eventually delivers, the structural ceiling is set by a competitor that is not standing still. ODI's analysis, aligned with the International Energy Agency's Global Critical Minerals Outlook 2025, projects that by 2035, China will still supply over 60 percent of refined lithium and cobalt, around 80 percent of battery-grade graphite and rare earth elements, and approximately 70 percent of battery-grade manganese. The average share of the top three refined material suppliers is projected to decline only marginally from 86 percent today to 82 percent in 2035, effectively returning to the concentration levels of 2020. For a policy framework that exists precisely to reduce that concentration, the trajectory is uncomfortable reading.

The LFP battery story illustrates the depth of the challenge. Lithium Iron Phosphate batteries, which now command nearly half the global EV market, have supply chains that are even more concentrated than those for nickel-based alternatives. China produces 98 percent of LFP cathodes, 75 percent of the required purified phosphoric acid, and 95 percent of the high-purity manganese sulfate needed for manganese-rich and sodium-ion battery chemistries. The rapid adoption of LFP, driven by its lower cost and longer cycle life, has inadvertently deepened the very dependencies that European industrial policy is trying to unwind.

China has also demonstrated, over the past year, that it is willing to use its supply position as a geopolitical instrument. In April 2025, Beijing introduced export controls on seven heavy rare earth elements, along with all related compounds, metals, and magnets. As export volumes fell sharply through April and May, European carmakers and component manufacturers struggled to secure permanent magnets, with some forced to reduce utilisation rates or temporarily idle production lines. Even after trade volumes partially recovered, rare earth prices in Europe reached levels up to six times those prevailing inside China. A second wave of export controls followed in October 2025, though that tranche has been suspended until November 2026. The suspension is not reassurance; it is a clock.

In that context, the G7's Évian Declaration, which I examined in detail earlier this month, set a target that no single country should supply more than 60 percent of the G7's rare earth imports by 2030. As I noted in that piece, expert skepticism over the feasibility of that 2030 timeline ran as a persistent undercurrent through every corridor in Évian. The CRMA's 65 percent single-country threshold tells an almost identical story: it is a benchmark that the EU has already breached for its most critical materials, and the projects selected to remedy that breach are, in many cases, years away from production.

The Saudi Gambit and the Search for New Capital

It is against that backdrop that the Riyadh dialogue acquires its full significance. The EU has signed 14 strategic raw materials partnerships over the past five years, but the ECA's review found that seven of those partnerships involve countries whose governments are considered unreliable by standard governance assessments, and that imports from partner countries actually declined for around half of the raw materials examined between 2020 and 2024. The partnerships have generated diplomatic paper; they have generated less in the way of measurable supply flows.

The turn toward Saudi Arabia reflects a different logic. Riyadh is not, in the first instance, a source of critical raw materials, though the Kingdom does have ambitions in phosphates and other industrial minerals. What Saudi Arabia offers, through its sovereign wealth architecture and through the Vision 2030 framework, is capital and an appetite for upstream and downstream mineral investments across Africa, Central Asia, and the broader Global South. State-owned entities in the Kingdom have already been deploying strategic offtake and equity investment strategies to build positions in mineral supply chains, an approach that mirrors, in some respects, the playbook that Chinese state enterprises used to establish their processing dominance over the past two decades.

For the EU, a structured dialogue with Riyadh opens the possibility of co-financing arrangements in third-country projects, particularly in Africa, where both parties have stated ambitions but where capital mobilisation has proved difficult. The Team Europe approach under which the Riyadh dialogue was convened, bringing together the EU Delegation, the European Chamber of Commerce in Saudi Arabia, and the GCC Green Transition Project, was designed to present a coordinated European face rather than a fragmented collection of member state initiatives. Whether that coordination translates into the kind of joint investment vehicles that would actually move capital remains to be seen.

The broader financing picture is complicated by competitive pressure. As the ODI analysis notes, new actors with appetite for financing critical minerals, including the UAE and Saudi Arabia, are entering the market, increasing competition for the best projects. That competition cuts both ways: it can crowd in capital and accelerate development, or it can drive up asset valuations and complicate the offtake arrangements that European processors need to justify domestic refining investments. The ReSourceEU Action Plan, launched in December 2025, has committed up to 3 billion euros for 2026, including 593 million euros through dedicated Horizon Europe calls, and has proposed a European Critical Raw Materials Centre and a Raw Materials Platform to aggregate demand and facilitate joint purchasing. These are meaningful tools. They are also tools that will take time to deploy at a scale commensurate with the challenge.

The second call for CRMA Strategic Project applications, which closed in January 2026, attracted more than 160 submissions, including 95 from within the EU and 66 from outside. Of those, 75 could support the battery value chain and 21 focus on rare earth elements for permanent magnets. The demand from project promoters for the strategic label is real. Whether the label can be converted into production, financing, and supply security at the pace the 2030 targets demand is the question that the Commission's project selection machinery has not yet answered.

The Permitting Promise and the Social License Problem

One of the CRMA's most commercially significant provisions is its promise of accelerated permitting: 27 months for extraction permits and 15 months for processing and recycling permits, against an existing baseline in which authorization procedures routinely run between five and ten years. For investors who have watched European mining projects disappear into environmental and community consultation processes lasting a decade, the statutory timeframe is genuinely attractive.

But the CRMA cannot legislate social license. The designation of strategic projects has already triggered what observers have taken to calling implementation conflicts in Portugal and Serbia, two countries where mining proposals have historically generated intense local opposition. Portugal, which hosts some of Europe's most significant lithium deposits, has seen proposed extraction projects generate sustained resistance from communities and environmental groups, regardless of what the regulatory calendar says about permitting timelines. Serbia's lithium story, centred on the Jadar project and ultimately returned to the development agenda after years of political turbulence, illustrates how quickly popular sentiment can override administrative process.

Hildegard Bentele, the CDU rapporteur for the EPP Group on the CRMA and European Parliament representative on the Critical Raw Materials Board, has tried to frame the external project designations in geopolitical rather than purely industrial terms. "Whether in Ukraine, Canada, or the United Kingdom," she said at the time of the external project announcements, "these projects reflect a new geopolitical raw materials policy: open, cooperative, and strategic." That framing is accurate as far as it goes. The CRMA's external project list is, in part, a foreign policy document, a statement about which partnerships Brussels considers worth institutionalising. Ukraine's inclusion, given the ongoing conflict and the immense reconstruction challenge that lies ahead, carries particular weight. So does Kazakhstan's, where CRM imports to the EU grew from 32,000 tonnes to nearly 674,000 tonnes between 2000 and 2024, and where the EU has a strategic partnership in place but limited ability to influence governance conditions.

Executive Vice-President Stéphane Séjourné, in his characteristically declarative style, put the Commission's public posture plainly when the ReSourceEU Action Plan was adopted: "Today, Europe acts on its independence in critical raw materials." The sentence is an aspiration stated as an accomplishment. In the corridors of the Critical Raw Materials Board, where member state officials and project promoters work through the granular details of financing gaps and offtake structures, the mood is more measured. Independence is the destination. The 60 Strategic Projects, the Riyadh dialogue, the Horizon Europe calls, the Raw Materials Platform, are the first steps of a journey whose length is still being mapped.

Conclusion: The Handshake and the Horizon

Back in Riyadh, as the Future Minerals Forum's third and final day wound down in January, the EU delegation and their Saudi counterparts exchanged the customary formalities of a first meeting gone well: agreement to meet again, expressions of mutual interest, commitments to working-level follow-up. Valere Moutarlier told reporters that the CRMA and ReSourceEU provided "a clear framework to strengthen Europe's resilience while deepening its cooperation with international partners." The framing was careful, as it needed to be. The EU was not announcing a supply deal. It was announcing a conversation.

That distinction is, in many ways, the defining tension of the EU's critical minerals moment. The legislation is in place. The Strategic Projects have been selected. The diplomatic choreography is under way, from Riyadh to Lusaka to Kyiv. Stéphane Séjourné's declaration of independence has been issued. And yet, when ODI projects that China will supply 80 percent of battery-grade graphite in 2035, when the ECA finds that four strategic materials already breach the 65 percent concentration threshold, when three out of four projects due to start production by 2027 are running behind schedule or impossible to verify, the gap between the architecture of ambition and the reality of supply chains remains vast and, for now, stubbornly persistent.

The 60 projects are real. The financing commitments are real. The Riyadh dialogue is real. What is not yet real is the processed lithium, the refined cobalt, the battery-grade graphite that European manufacturers will need in quantities that dwarf anything currently flowing from the CRMA portfolio. Filling that gap will require not just faster permitting and smarter diplomacy, but a sustained tolerance for the slow, expensive, socially contested work of building industrial capacity in places that have not built it before. The handshake in Riyadh was a beginning. What it begins, and how quickly, is a question that no ministerial communique can yet answer.