Schreinemacher made the comments in a speech at the University of Twente yesterday, during which she emphasised how the Netherlands should adapt its supply chains amid evolving developments in geopolitics and the global economy.
In particular, the cabinet Minister said the Netherlands should focus its efforts on becoming a key European hydrogen hub, establishing more international partnerships to diversify supply chains, and building up strategic reserves of critical minerals.
Minister Schreinemacher began her speech by highlighting the global challenges posed by ongoing conflicts, such as the war in Ukraine and the crisis in the Middle East. She also stressed the importance of an open and free global economy, especially as we transition towards a sustainable future.
However, she also acknowledged that geopolitical tensions make sourcing sought-after raw materials even harder for European businesses:
“Speaking from a Dutch and European point of view, there’s a harsh reality we need to face: we’re far too dependent on critical raw materials sourced mainly from just a few countries. And not all of these countries see things the way we do.”
Minister Schreinemacher then went on to emphasise the staggering increase in demand for these resources, noting that by 2040, the world will require 42 times the current supply of lithium, 21 times more cobalt, and 19 times the current nickel resources. The Netherlands alone will need up to 15% of global neodymium production, a rare earth metal used in magnets.
Next, the Minister noted the “monumental transformation” toward sustainability, as well as the resource crunch that accompanies it. She also stated that we must expedite the transition to a sustainable economy while ensuring a steady supply of critical minerals.
“Changing our fossil-powered societies into sustainable ones will be one of the most monumental transformations in human history. And it’s clear we have to move very quickly. But the quicker we drive the energy transition, the more minerals we’ll need. Even now, when we’re only just starting out, we’re already facing a serious resource crunch. The minerals we need are in the ground, but we’re not getting them out fast enough,” said Schreinemacher.
The Minister outlined three global obstacles to overcome: unwanted dependencies, scarcity, and sustainability concerns related to mining. Unwanted dependencies on a few countries for critical raw materials, particularly China, were identified as a significant issue. Moreover, Minister Schreinemacher emphasised the necessity of diversifying supply chains and reducing reliance on single sources.
“The stark fact is that we simply cannot do without China at this time. This is a huge dependency that we need to phase out as soon as possible. Particularly because we’ve seen that this is a country that does not shy away from misusing these dependencies to its own advantage,” stressed the Dutch Minister for Foreign Trade and Development Cooperation.
The scarcity of these critical raw materials was another concern.
“The problem is that global production is falling far short of demand. And opening a new mine takes up to 15 years, from the exploration phase to its actual operation. In many cases, like with lithium or cobalt, we haven’t even started building the mines to meet our demand,” warned Schreinemacher.
Schreinemacher added that some new mining initiatives are underway globally. However, when it comes to the short to medium term, Schreinemacher said it was clear that a mineral shortage is on the horizon. “We’re already seeing rising prices and delays. With a climate crisis upon us, this is something we cannot afford,” stated the government Minister.
Sustainability in mining was the third challenge highlighted in the speech. Minister Schreinemacher acknowledged the environmental issues associated with mining and how it is becoming more energy and resource intensive due to what’s already been exploited:
“Businesses further down the supply chain often don’t know if products have been produced in a responsible way. Compounding these issues is the fact that we’ve already mined most of the good stuff. What remains is ore that contains much less mineral content. In the case of copper, often less than 1% ore, where it used to be 30. This means it will take more energy and more water, and create more waste, to get the same amount of material out of the ground.”
Nevertheless, Schreinemacher also stressed that some other nations had shown mining can be more sustainable, and that Europe can follow their lead:
“The good news is that mining can be made more sustainable. Countries like Canada and Australia are setting an example, and this is a path that we, the Netherlands and Europe, should follow in order to have a positive impact.”
Moving on, the Minister conveyed the importance of innovation and collaboration between academia and the private sector to reduce dependencies.
With regards to this, she commended the Netherlands’ role in refining and recycling critical minerals, particularly at the port of Rotterdam. Additionally, she encouraged the exploration of alternative technologies that require fewer scarce minerals, such as sodium-ion batteries.
Then came the three key actions Schreinemacher believes need to be taken to address the supply chain challenges of the future:
- Playing a strategic role in supply chains: She called for making the Netherlands an essential part of relevant supply chains by leveraging the country’s knowledge, logistics, and industrial capacity.
- International partnerships: She emphasised the importance of forming partnerships with various nations, sharing knowledge, and improving supply chains to ensure global sustainability.
- Strategic reserves of critical minerals: To mitigate potential disruptions in supply chains, the Minister recommended establishing strategic reserves of essential minerals.
When it comes to the first of these points, Schreinemacher highlighted the Netherlands’ ability to become a major European hydrogen hub. As far as international partnerships are concerned, the Minister stated that it will be necessary to look beyond Europe’s closest friends:
“We try to forge these partnerships based on mutual interests, with an eye to creating real opportunities for both parties. We’re close to concluding two partnerships of this kind: with Vietnam and with South Korea. These countries are our friends, but we also have to embrace realpolitik. And look further than our close friends.”
The third and final point, believes Schreinemacher, is vital for the protection of the economy:
“As things stand, if supply chains fail anywhere, it’s only a matter of weeks, or even days, before our economy feels the pain. In the current, unstable world order, this scenario is far from unthinkable.”
Schreinemacher continued:
“That’s why we should stockpile the most essential minerals, so that we can withstand shocks to supply chains. We already maintain reserves for oil, the fuel of today’s economy. So I think it’s vital we do the same with the fuel of tomorrow’s economy: minerals. Countries like Japan, South Korea, and the United States are already taking steps in this direction.”
Addressing the question of what minerals should be stockpiled, Schreinemacher suggested resources in sectors where “the Netherlands excels,” which she listed as offshore wind and semiconductors.
In her concluding remarks, Minister Schreinemacher asserted that it is essential to take immediate action, emphasising the urgency of addressing climate change and achieving economic transition. She called on countries and industries to work together to create a sustainable, fair alternative system that benefits all:
“We have to work together to create something better. A system that works for everyone; based on mutual partnerships, mutual respect, and the recognition of each other’s interests. A system that offers meaningful involvement to local communities in mining areas, as well as an affordable and reliable supply of minerals to companies that produce the technologies on which the new economy relies.”
Photo: Frans Berkelaar, CC BY-SA 2.0, via Wikimedia Commons