As geopolitical tensions in the Gulf of Hormuz escalate, Europe faces a significant challenge in securing its critical minerals supply essential for both military and industrial applications. The ongoing conflict has highlighted vulnerabilities within global supply chains, particularly affecting the availability and pricing of key materials.
Michael Wurmser, founder of the London-based mining services firm Norge Mineraler, emphasizes that Europe’s heavy reliance on imports exposes the continent to considerable risks. Among the most critical inputs is sulphur, which is vital for the extraction of copper and cobalt. Wurmser notes that while oil prices dominate headlines, the implications for critical minerals are equally severe, with potential repercussions for various sectors.
The Gulf region currently supplies about 25% of the world’s sulphur, primarily as a byproduct of oil refining. However, since the onset of conflict in Iran, sulphur prices have surged by 25% recently and are now 165% higher than they were a year ago. This price increase is compounded by shipping constraints and selective blockades affecting the Strait of Hormuz, further straining supply availability.
In response to these challenges, the European Union has introduced its ’10-40-50′ plan, which aims for 10% mineral extraction, 40% refining within Europe, and 25% recycling by 2030. However, Wurmser argues that this strategy falls short of addressing Europe’s strategic requirements. He advocates for a more aggressive approach to domestic resource utilization, highlighting the abundance of minerals such as phosphorus, lithium, manganese, graphite, and copper beneath European soil.
Wurmser points out that the disruptions caused by the Covid-19 pandemic and the Ukraine war have exposed the fragility of global supply chains. He calls for vertically integrated supply chains that encompass extraction, processing, and end-use to ensure security in critical sectors like defense and food production. Relying on global markets for scarce resources is not a viable economic or security strategy; instead, Europe must invest in its domestic capabilities to mitigate future disruptions.
The economic implications of failing to act are significant. Without proactive measures, Europe risks losing billions in tax revenue from untapped mineral resources while also facing rising prices influenced by Iran’s control over the Hormuz corridor. Wurmser warns that Europe’s industrial and military future hinges on reclaiming control over its mineral resources rather than depending solely on external markets.
