EC and EBRD set up a mining investment fund

The European Union (EU) and the European Bank for Reconstruction and Development (EBRD) have signed an agreement on a new mechanism that provides capital investment for the exploration of essential and strategic raw materials, with the aim of mobilizing investments worth approximately EUR 100 million, it is stated in a press release issued by the European Commission. According to the quoted source, these raw materials are essential for the EU's digital and ecological transition, and the investment tool was created against the background of the global fight for critical materials between China, the US and the EU.

The EU is supporting the development of sustainable projects for critical raw materials (CRM) to reduce the risk of potential supply chain disruptions. This helps to ensure that industrial sectors have the necessary resources while maintaining EU environmental and social standards.

The 100 million euro fund is made up of an allocation of 25 million euro from the Horizon Europe program, 25 million euro is provided by the EBRD, and 50 million euro will be mobilized from the newly created joint mechanism.

The new financing mechanism will facilitate capital investments in the initial phase of operations in the EU member states where the EBRD operates (Bulgaria, Croatia, Estonia, Greece, Hungary, Latvia, Lithuania, Poland, Romania, Slovak Republic, Slovenia and the Czech Republic ), as well as from non-EU EBRD countries covered by the Horizon Europe program (Albania, Armenia, Bosnia and Herzegovina, Georgia, Kosovo, Moldova, Montenegro, North Macedonia, Serbia, Tunisia, Turkey and Ukraine).

Since mining exploration activities do not yet generate income, the most appropriate support tool is equity. The EBRD expects to invest in 5-10 smaller mining companies (SMEs or small mid-caps) conducting exploration in eligible countries. The financing facility will support the exploration and exploitation of metals and minerals necessary for the transition to green energy and digitization. Therefore, responsible exploration and exploitation activities conducted in accordance with high climate, governance, environmental and social standards will be funded. All projects will be subject to an EBRD check on alignment with the Paris Agreement and social and environmental policy.