Europe’s critical raw materials strategy is moving from policy recognition towards the practical challenge of maintaining existing metal production and developing new mining, refining and recycling capacity. Electricity costs, financing, permitting and carbon rules remain central to investment decisions across the sector.
Metals including aluminium, copper, zinc, nickel, lithium, rare earths and speciality metals underpin power grids, renewable energy, batteries, semiconductors, transport and defence equipment. Their importance has shifted the European policy debate towards economic security, industrial resilience and strategic autonomy. Evangelos Mytilineos, executive chairman of METLEN Energy & Metals, highlighted this transition as he completed two terms as president of the industry association formerly known as Eurometaux and renamed European Metals in 2026. Inge Hofkens, chief operating officer for multimetal recycling at Aurubis, became president on July 1, 2026.
Energy costs remain a major industrial constraint
During the energy crisis following the disruption of Russian gas supplies, around half of Europe’s primary aluminium capacity was curtailed or taken offline. More than 900,000 tonnes of production had been halted or reduced by the middle of the crisis, while electricity costs for some producers increased by several hundred per cent. Wholesale prices have since stabilised, but the European Commission estimates that industrial gas and electricity prices remain commonly two to four times higher than those faced by the EU’s main trading partners.
The problem is particularly significant for energy-intensive metallurgy. Aluminium smelting requires continuous electricity, while copper and zinc refining also involve electro-intensive processes. Recycling facilities require reliable power as well as stable supplies of secondary materials.
Critical raw materials projects expand
The Critical Raw Materials Act, effective since May 2024, established 2030 targets for the EU to extract 10 per cent, process 40 per cent and recycle 25 per cent of its annual strategic raw-material consumption. It also limits dependence on a single third country to 65 per cent at a relevant processing stage.
The European Commission selected 47 Strategic Projects inside the EU and 13 projects in third countries and overseas territories in 2025. A second selection process followed in 2026, covering extraction, refining, processing, recycling and material substitution.
The framework now operates alongside the Steel and Metals Action Plan, Clean Industrial Deal, Affordable Energy Action Plan, RESourceEU Action Plan, Clean Industrial Deal State Aid Framework and proposed Industrial Accelerator Act. The Clean Industrial Deal envisages mobilising more than €100bn for European clean manufacturing. Strategic status can facilitate permitting and access to public finance, but projects still require competitive electricity, engineering, feedstock, infrastructure, financing and long-term customers.
METLEN links mining and processing in Greece
METLEN is developing a €295.5mn programme at its existing Greek industrial complex combining bauxite mining, alumina refining and gallium production. The investment is designed to raise annual alumina capacity to 1.265 million tonnes, support approximately 2 million tonnes of annual bauxite production and establish 50 tonnes of annual gallium capacity.
On July 29, 2026, METLEN announced a long-term agreement covering around 25 per cent of planned gallium output with a US technology customer. Gallium is used in semiconductors, telecommunications, high-frequency electronics, renewable-energy equipment and defence systems.
Slovalco prepares aluminium capacity restart
In Slovakia, Slovalco plans to invest €100mn to restore 75,000 tonnes of curtailed annual aluminium capacity and support more than 200 jobs. Production is expected to restart in the fourth quarter of 2026, subject to European Commission approval of Slovakia’s revised compensation scheme for indirect carbon costs. The project highlights the continuing role of energy and carbon costs in determining whether existing European metal capacity remains competitive.
Recycling becomes part of supply security
Aurubis has invested €190mn in its Complex Recycling Hamburg facility, designed to process more complex recycling materials and intermediates across its European smelter network. The company also secured a €200mn European Investment Bank loan in 2025 for recycling and copper-production investments. The facilities recover copper together with minor and precious metals from increasingly complex material streams. The European Commission is targeting a 24 per cent circular-material-use rate by 2030 and is monitoring aluminium, copper and steel scrap exports. Its Steel and Metals Action Plan includes measures aimed at retaining strategic scrap in Europe and increasing demand for recycled content.
Industrial power and carbon rules remain decisive
The Affordable Energy Action Plan promotes power-purchase agreements, lower taxes and levies, improved network tariffs, faster renewable deployment and stronger interconnection. The European Investment Bank has established a €500mn counter-guarantee facility to support industrial PPAs and reduce collateral requirements. For metals producers, renewable PPAs do not necessarily eliminate balancing costs, profile risk, grid congestion and network charges. Industrial plants require predictable power capable of matching continuous consumption.
The Clean Industrial Deal State Aid Framework also provides national governments with greater scope to support clean energy, industrial decarbonisation and clean-technology manufacturing through 2030. Differences in national fiscal capacity, however, can affect the level of support available to individual projects.
CBAM changes the competitive environment
The Carbon Border Adjustment Mechanism (CBAM) entered its definitive phase on January 1, 2026, covering imports including iron and steel, aluminium, cement, fertilisers, hydrogen and electricity. EU ETS free allocation for covered products is being phased out between 2026 and 2034. In June 2026, the Council agreed its position on extending CBAM to selected downstream products and strengthening anti-circumvention measures. The Commission has also introduced temporary support for European producers exposed to carbon-leakage risks when exporting CBAM-covered goods.
CBAM can address competition from imports into Europe but does not eliminate the pressure on European producers competing in markets outside the EU. European Metals has argued for continued indirect-cost compensation beyond 2030, alongside realistic ETS benchmarks and free-allocation rules. For mining and metals projects, permitting, environmental requirements, financing and infrastructure remain equally important. Strategic designation cannot replace resource modelling, metallurgical studies, water and waste planning, energy arrangements, logistics, community engagement or offtake agreements. Europe’s metals policy will ultimately be reflected in tonnes extracted, refined, processed and recycled, alongside restarted smelters, new processing capacity, commissioned recycling plants and long-term industrial supply contracts.
