The Critical Raw Materials Act (CRMA) came into force in the European Union on 23 May 2024. This insight provides a snapshot of the CRMA and how it may support your project.
The CRMA – Introduced by EU Regulation 2024/1252, the CRMA establishes a “framework for ensuring a secure and sustainable supply of critical raw materials” essential to the EU’s economy.
The final version of the CRMA contains substantial changes to the draft released last year, providing broad support including funding, expedited permitting, and a system for offtakes. As an EU regulation, it is binding on all EU member states.
A ‘critical material’? The EU has identified a list of 34 ‘critical raw materials’ as essential to the EU’s strategic interests. The list is based on certain criteria, including the economic importance of the materials, their supply risk, and the difficulty in finding substitutes. Some of these are then (sub)categorized into 17 ‘Strategic Raw Materials’, such as bauxite, copper, lithium, manganese, and nickel.
What is a Strategic Project? To receive support under the CRMA, a project must first be classified as a ‘Strategic Project’. To obtain this status, the project must “make a meaningful contribution to the EU’s supply of strategic raw materials”; be implemented sustainably; and have obtained a classification under the ‘UN Framework Classification for Resources’.
What support? A Strategic Project will be considered as “having an overriding public interest” in the host nation. It will enjoy an expedited permitting process which shall not exceed: (i) 24 months when it involves extraction, and (ii) 12 months for processing or recycling.
It may receive EU financial support, through EU development financial institutions and national promotional banks. The EU Commission will also set up a system to facilitate offtake agreements for Strategic Projects which includes a bid process for the sale of these materials.
Projects outside EU? – The CRMA clarifies that projects outside the EU can obtain support and funding. Specific criteria will vary depending on the project location, but all must meet the same prescribed standards for projects in Europe.
How to apply? – The EU Commission has opened the first call for applications (for classification as a ‘Strategic Project’) and this window will close on 22 August 2024. Applications will be checked for compliance with the CRMA, before undergoing a technical review during September and October 2024.
Other legislation – the CRMA must be read in line with Raw Materials Initiative and other EU legislation including the (i) Conflict Minerals Regulation requiring supply chain due diligence; and (ii) Circular Economy Action Plan.
Does my project qualify? – For advice in relation to EU and US critical mineral funding, please contact us to organize a review of your project and the options for support on your project.
At Serus, we have extensive experience in critical minerals. We provide legal services to companies with structuring, project acquisition, and due diligence, and we prepare mining agreements including royalty, JV, construction, and earn-in agreements.
Serus is an international law firm that uses technology and lower overheads to provide legal services at a significantly better value. Please contact our team or email info@seruslegal.com
This insight does not constitute legal advice and is subject to input from a lawyer.