【By Guan察zhe Wang, Qi Qian】 Recently, the European Union has been continuously hyping up the issue of critical minerals. According to a report by the UK's The Guardian on July 2nd, Stephan Scheller, CEO of AMG Lithium, a newly emerging lithium processing company in Germany, took the opportunity to get involved, calling on the EU to reduce its dependence on China under the pretext of the critical mineral issue, trying to take advantage for personal gain.

To achieve this goal, Scheller even played the "provocative tactic", claiming that if the EU could not break free from its reliance on China, it might as well "apply to become a province of China".

The report stated that in 2024, Scheller's German AMG Lithium company built Europe's first lithium refining plant in Saxony-Anhalt, Germany, which was expected to be completed in two years, aiming to produce 20,000 tons of lithium hydroxide annually, sufficient to supply 500,000 electric vehicles. The company produced its first batch of test products last month and hopes to achieve commercial mass production by late this year.

In Scheller's view, the EU's pursuit of lithium batteries is akin to a new "gold rush." However, he criticized the current policies and laws of the EU as ineffective, advocating for temporary protection measures for components, otherwise China will continue to dominate battery technology and weaken EU competitors.

"Europe must break its dependence on China, otherwise everything is just empty talk," he said when talking about EU policies. The reality is that many EU component manufacturers face intense competition from Chinese manufacturers, from steel to entire batteries. He said that unless the EU solves this issue in a practical way, the situation will not change and will threaten the EU's climate goals.

To exaggerate the so-called "Chinese threat," Scheller used the provocative tactic, claiming that it would be better for the EU to "apply to become a province of China."

"Upon careful consideration, this is an interesting idea. We are indeed at a turning point, which has nothing to do with the Ukraine-Russia conflict, but rather a complete transformation of global relations," he continued. The world economy "has risen thanks to the people in China and India who work hard for Europe," and the new balance of global supply chains is something created by Western leaders themselves.

Interviewed at AMG's German factory, The Guardian

Subsequently, Scheller began to seek benefits for his own company. According to the introduction, the company spent five years and cost 150 million pounds to reach its current position, and had no competitors for two or three years.

Scheller said he did not request special treatment and believed that AMG would succeed in the green transition of the EU automotive market. However, he was not optimistic about whether the EU had the ability to change the so-called "dependence on China." "We must make strategic investments now, because even if we are lucky, it will take five years to get there."

He also severely criticized the EU's Critical Raw Materials Act (CRMA) of 2024. This act is seen as the "strategic pillar" of the EU to reduce its dependence on China, but he insisted that it failed to match the actions taken by the United States.

"Unfortunately, the CRMA does not hold you accountable for anything, such as in raw material mining, the EU has no incentives or penalties for mining," he said. "This is completely opposite to the US, which implements strict localization policies. In the US, they believe that essential materials must have a certain proportion produced domestically."

Scheller continued to express frustration: "We don't have that in the EU. We have the intention, but no action. If you don't buy from the EU, you won't pay a price, so why would you buy EU products? So, you will continue to buy from China."

Data shows that China refined 60% of the world's lithium, controlled 60% of the global battery component production, and dominated the market.

Scheller said that industry insiders generally believe that companies in the EU's critical raw materials sector need protection because they need a long development process to catch up with their Chinese competitors. He recommended that the EU emulate the US Inflation Reduction Act, offering temporary tariffs or tax incentives, while inviting Chinese companies to invest in Europe with the condition of employing local workers.

He emphasized: "We must create an environment where Western companies in key technology areas can guarantee their investments. Especially in the automotive industry, because the industry is replacing internal combustion engine technology with new technologies. This is a strategically significant move."

Lithium, known as "white oil," is a key metal for the energy transition. To reduce dependence on China for strategic materials, the West has accelerated the launch and adjustment of strategies in recent years, attempting to promote the localization, diversification, and "de-Chinaization" of critical mineral supply chains.

However, a major lithium producer warned that this approach is economically unfeasible. Last November, Kent Masters, CEO of the world's largest lithium producer, U.S. Albemarle, stated that attempts by Western countries to "take back" control of critical minerals from China in North America and Europe would offer "low returns," saying, "The prices we see in the market do not allow us to do this."

Last March, Bloomberg published an article stating that Western efforts to "de-Chinize" the lithium supply chain were already ten years too late. The article noted that lithium prices are highly volatile, and investment projects may take several years to yield results, requiring investors to have sufficient patience. Compared to non-Chinese shareholders who are anxious and seeking quick returns, China has a clear advantage in this regard.

"Now, the global lithium industry is intertwined with Chinese capital and cannot be separated," wrote the article's author, David Fickling, a Bloomberg columnist on climate change and energy. He urged Western countries to ensure lithium supply, not only seeing China as a "competitor," but also accepting it as a "partner."

At the same time, EU officials and companies frequently hype up the issue of rare earth magnets, trying to defame China for "weaponizing rare earths." However, according to a recent report by the Financial Times, EU countries are committed to achieving "rare earth freedom," but their capacity is far from meeting demand.

The report stated that although France has nine strategic projects out of 47 in the EU's CRMA legislation, including two related to rare earths, the number of projects is the highest among EU countries, its progress in rare earths still lags far behind China. Several rare earth-related companies said that the surge in demand for permanent magnets used in fighter jets, wind turbines, and electric vehicles has overwhelmed them.

"It's very frustrating because the demand is strong, but we don't have enough capacity to respond," said Petit, CEO of MagREEsource, a再生磁铁 producer based in Grenoble, France.

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Original: https://www.toutiao.com/article/7522448268199838251/

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