France presents ‘first step’ €2bn fund for critical metals

France presented a plan to launch a €2 billion investment fund for critical metals on Wednesday (10 May), which according to former industry boss Philippe Varin is just a starting point, with more to come.

Read the original French story here.

Industry Minister Roland Lescure told EURACTIV in February that “the government is preparing to launch a fund that could combine private and public capital to ensure the financing of mining sectors”.

This became a reality on Wednesday, as confirmed by the government and the company that will run the fund, InfraVia.

Since the end of the pandemic, European governments have been wondering what strategy to adopt to make it easier for the EU to ensure the security of its resource supply.

This is a key element for a successful energy and ecological transition that is particularly important in crisis times such as the war in Ukraine, when EU member states jointly agreed to drop their heavy reliance on Russian fuel and replace it with other sources.

In January, US President Joe Biden presented the US Inflation Reduction Act (IRA), a programme that proposes almost $370 billion in incentives to reduce carbon emissions. “Good news for global decarbonisation” but a challenge for the EU economy, French Industry Minister Roland Lescure said at the time about the US push.

The EU has already responded with two pieces of legislation.

In mid-March, Internal Market Commissioner Thierry Breton presented the EU Critical Raw Material Act (CRMA), which aims to have at least 15% of the critical, strategic, and rare earth metal needs domestically sourced.

On the same day, Breton and the EU climate chief Frans Timmermans presented the Net-Zero Industry Act (NZIA) with the ambition of redeveloping a decarbonised and more autonomous industry in Europe.

In France, President Emmanuel Macron will present the milestones for a new “green industry” law on Thursday, as Economy Minister Bruno Le Maire hinted in January.

Under the law, France aims to redevelop its industry by promoting jobs and research – this time by “greening” the industry to achieve the EU and international decarbonisation targets.

“We want to anchor the new champions of this industrial revolution – hydrogen, electric cars, etc. – in the regions,” said Lescure.

At the same time, Macron is set to visit Dunkirk on Friday and announce the installation of a new factory producing electric batteries for vehicles.

As such, it is necessary to secure key supplies of critical materials such as lithium or cobalt, essential for tomorrow’s industry.

“We support the establishment of a European sovereignty fund, which will allow the pooling of financial resources”, Lescure said.

This support is shared by European Commission President Ursula von der Leyen as well as Philippe Varin, the former head of PSA Peugeot-Citroën, Orano, Suez and the trade union France Industrie.

Speaking to EURACTIV, Varin said it is necessary to develop a European fund with “at least a few billion”, explaining that it is “not much compared to the 369 billion dollars of investments of the American IRA”.

In a report submitted to the government in January 2022 on “securing the supply of mineral raw materials to industry”, Varin defended the same approach at the French level.

€2 billion, then what?

Initially, the state will contribute €500 million to the fund through the state-owned deposit agency Caisse des Dépôts, with the private sector providing the rest.

The government has not yet announced which companies will participate in the scheme.

Varin called the announcement good news, and saying it was only the “starting point”. We must, therefore, “be prepared for its enlargement”, he continued.

Lescure also said that “we must seek mining resources wherever they are, as part of a coherent and coordinated strategy, from exploiting resources to recycling”.

The first investments are expected in 2024 and are expected to support 10 to 15 projects for the first phase, Le Figaro reported.


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