EU signs deal with Ukraine to secure lithium supplies for EV batteries

Business news | July 14, 2021

By Nick Flaherty

Batteries / Power Supplies IoT Materials & processes

The European Commission has signed a deal with Ukraine on the supply of raw materials, particularly lithium, that will see more investment in mining and Industry4.0 technologies.

EU countries have limited sources of lithium, and the UK is exploring recovering lithium from water in Cornwall. Ukraine, on the border of the EU, has the largest reserves of lithium in Europe with mines in Donetsk and Kirovograd. However the region is unstable following the annexation of the Crimea region of Ukraine by Russia.

The strategic partnership with Ukraine will include activities along the entire value chain of both primary and secondary critical raw materials and batteries and the deal is the second under the EU’s Critical Raw Materials Action Plan follwing a dweal with Canada in June. Joint EU-Ukraine projects will also be able to apply directly for funding under Horizon Europe.

“The idea to expand our cooperation into the area of critical raw materials and batteries was born last October. Today, some nine months later, we are signing a Memorandum of Understanding – the first concrete step in turning that ambition into reality,” said EU Vice-President Maroš Šefčovič who has driven the battery programme.

“This is impressive, especially as Ukraine continues to face a daunting array of challenges, not to mention the security situation at its eastern border and in illegally-annexed Crimea. Ukraine is well placed to become a strong player in critical raw materials and batteries – even poised to lead in these fields within the Eastern Partnership and the Energy Community,” he said.

The deal requires Ukraine to align its regulatory mining framework to that of the EU, committing to the highest environmental, social and governance standards while the EU will support modernisation of low carbon technologies, from mining to recycling with €750,000 this year and more next year. The deal also includes the digitalisation and improved data management of Ukrainian mineral resources/reserves by creating a ‘data room’ – a repository with digital geological reports, and de-classifying and re-assessing raw materials reserves using international standards;

Satellite Earth-observation programmes and remote sensing will be used to strengthen new resource exploration and monitor environmental performance of mines during operations and post-closure.

The European banks, the EIB and the EBRD, will also mobilise financial and investment instruments to support concrete projects. Support from these banks was critical for setting up the NorthVolt battery gigafactories in Sweden and Germany that is to supply Volkswagen and other European EV makers.

“I am pleased to see concrete results of the Commission’s Action plan on Critical Raw Materials,” said Commissioner Thierry Breton, responsible for the Internal Market. “This partnership will contribute to diversifying the EU supply of raw materials and addressing some of the strategic dependencies identified in the updated Industry Policy Strategy. The high potential of the critical raw materials reserves in Ukraine, together with the need for modernisation of its extractive industry underpinned by improving the legal and administrative framework for investors and geographical vicinity, represent a solid base for the mutually beneficial partnership.”

See the EU Strategic Action Plan for batteries for more details.

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