Speech by minister Schreinemacher at the faculty of Geo-Information Science and Earth Observation in Enschede

Speech | 25-10-2023

Ambassadors, students, ladies and gentlemen,

Thank you so much, it has been my honour and privilege to stand here before you and to share this exiting day with you. Unfortunately, we find ourselves in the midst of a difficult time. Because once again, part of the world is going up in flames. In addition to the war in Ukraine, everyone’s eyes are now on the Middle East.

This new war again brings home the fragility of the world order, and what can happen when conflict sets the international agenda. Human suffering followed by, borders closing, countries that no longer trade peacefully, and energy prices that soar.

Unfortunately, these things are happening right now. For example, last week several countries announced export restrictions on high-tech goods, raw materials and more. These kinds of restrictions should always be considered a last resort. An extreme measure to be employed only when national security is at stake. Because right now we need an open and free global economy more than ever.

This is especially true as we move towards a sustainable economy. This transition offers many opportunities, but it also has an Achilles heel: the enormous amounts of critical raw materials we will need. Which is what I will be focusing on today.

And after hearing all your pitches upstairs, it pains to me to only have to limit myself to one subject, because all of your research is so extremely important.

In the coming decades, we will enter a totally different energy reality. One fuelled by clean energy technologies like solar, wind turbines and hydrogen. But to power our societies with clean energy, we will need critical minerals, and lots of them. Demand for these will rise above anything we have ever seen.

In 2040, we will need 42 times the current lithium supply; 21 times more cobalt; and 19 times the current nickel resources. The Netherlands alone will need up to 15% of current global production of neodymium – a rare earth metal used in magnets. And that’s just us. Imagine what the whole world will need.

Changing our fossil-powered societies into sustainable ones will be one of the most monumental transformations in human history. And it's clear we have to move very quickly.

But the quicker we drive the energy transition, the more minerals we’ll need. Even now, when we’re only just starting out, we’re already facing a serious resource crunch. The minerals we need are in the ground, but we’re not getting them out fast enough. So the question is: how do we get ready for this transition?

Ladies and gentlemen,

That’s not just a question for politicians, but also for you. Because you – students, scientists and staff at ITC – have an important role to play in providing answers. Your data and analysis help policymakers to make sense of an increasingly complex world. That’s why I’m delighted to join you today, at the opening of your beautiful new home.

It’s great to see people from so many different nationalities here. Ever since the 1950s, ITC has advanced internationalisation and the sharing of knowledge. And I think your new campus reflects this mission.

The Langezijds has been built with the 21st century in mind: reused, repurposed and revitalised. I have no doubt it will greatly contribute to shaping the minds and careers of those who have the privilege to work here. The world needs bright minds like yours. Now more than ever.

To solve the coming resource crunch, we will have to overcome three global obstacles: unwanted dependencies, scarcity, and the sustainability of mining.

Let's delve deeper into these.

First, unwanted dependencies.

Speaking from a Dutch and European point of view, there's a harsh reality we need to face: we’re far too dependent on critical raw materials sourced mainly from just a few countries. And not all of these countries see things the way we do.

When it comes to lithium, cobalt, and rare earth elements, only a handful of nations dominates more than three-quarters of global supply.

In certain cases, a single nation accounts for nearly half of worldwide output. China is without doubt the dominant nation. Many critical raw materials are mainly supplied from within its borders.

Even cobalt, which is primarily sourced from the Democratic Republic of the Congo, is rerouted via China in the supply chain. Around 85% the chemical form of cobalt needed for batteries comes from China.

As a result, the stark fact is that we simply cannot do without China at this time. This is a huge dependency that we need to phase out as soon as possible. Particularly because we’ve seen that this is a country that does not shy away from misusing these dependencies to its own advantage.

The second challenge regarding critical raw materials is scarcity. The problem is that global production is falling far short of demand. And opening a new mine takes up to 15 years, from the exploration phase to its actual operation. In many cases, like with lithium or cobalt, we haven’t even started building the mines to meet our demand.

Thankfully, new mining initiatives are under way globally. But in the short to medium term, it’s clear that a mineral shortage is on the horizon. We’re already seeing rising prices and delays. With a climate crisis upon us, this is something we cannot afford.

The third challenge is the sustainability of mining itself. Mining can be extremely polluting, and it has lead to conflicts and human rights violations in the past.

There’s also the matter of transparency. Businesses further down the supply chain often don’t know if products have been produced in a responsible way.

Compounding these issues is the fact that we’ve already mined most of the good stuff. What remains is ore that contains much less mineral content. In the case of copper, often less than 1% ore, where it used to be 30.

This means it will take more energy and more water, and create more waste, to get the same amount of material out of the ground.

The good news is that mining can be made more sustainable. Countries like Canada and Australia are setting an example, and this is a path that we, the Netherlands and Europe, should follow in order to have a positive impact.

Ladies and gentlemen,

We can turn the sustainable transition, and the resource crunch, into opportunities.

Here in the Netherlands, we have one of the most highly educated populations in the world – and you are part of the reason why.

Universities like here in Twente help create an ecosystem of entrepreneurship and innovation. I believe that the ingenuity of academia and the pragmatism of the private sector, working together, will help us find answers to these three challenges.

Because innovation is the most promising way to reduce dependencies. For instance by researching technologies that need fewer scarce minerals, like sodium-ion batteries as an alternative to lithium. When I was in Korea last year, I got a glimpse of the amazing progress battery manufacturers have made with cobalt-free batteries.

But solving global problems isn’t something the private sector should try to do on its own. That’s where government comes in. And we will. It’s our responsibility to set goals for the future, and to set out a course to get us there. For the Dutch government, that goal is clear. We will become a sustainable and highly innovative economy; to ensure our future prosperity and security. But our dependency on too few suppliers is a problem.

Last week we were reminded of this, as China imposed export restrictions on graphite – a material needed for batteries used in electric cars. Supply chains are fragile, and disruption anywhere in the chain can break it. So we have to increase and diversify our sources of supply.

Almost all countries around the world face a similar challenge: either as suppliers, as manufacturers, or as consumers. None of us want to be too dependent on one or two rescources, and all of us stand to gain if we get this right. So what can we do?

We should do most at European level. Quite simply because it makes most sense. As a union of 450 million people, we can achieve a lot more than as a country of around 18 million.

The European Critical Raw Materials Act, a law that has the objective of Europe never being too dependent on any one supplier, is an excellent starting point. As are European economic partnerships with third countries. On top of this, the Dutch government has already drawn up a natural resources strategy, outlining the fundamental steps we will be taking:

• We will stimulate more sustainable mining and refining in Europe;
• We will diversify our supply streams, and encourage circularity and innovation;
• And we will invest in research and monitoring, and make international supply chains more sustainable.

When the EU makes robust regulations, demands responsible business practices, and invests in sustainable supply chains, this has effects around the world. It improves conditions for people everywhere. But although the EU is an effective machine, it’s often not a fast one.  It can only move at the speed at which its member states can agree on policies.

But we also have our own responsibility. We can’t just point to Brussels and expect results from there. Because Europe isn’t just some abstract idea, it’s the member states – it’s us.

I believe that, in the Netherlands, we can take the lead in three key areas.

First, by making the Netherlands an essential strategic part of the most relevant supply chains. We will focus our efforts where our added value is greatest. We have an enormous supply of knowledge, a talent for logistics and a robust industrial capacity.

Take refining, in which we excel. Using that expertise, the port of Rotterdam is working hard to become a crucial hub for the European hydrogen economy, and a global centre for refining and recycling critical minerals. Much of the necessary infrastructure is already in place.

The Netherlands also excels in maritime infrastructure, water management, geotechnical expertise, and surveying services – like I just saw upstairs. This gives us a unique starting position that we should use to our advantage.

Second, to avoid dependency on any single country or region, we are also establishing partnerships with other nations. Such as with Australia and Germany: to share knowledge, improve supply chains, and make trading easier.

We try to forge these partnerships based on mutual interests, with an eye to creating real opportunities for both parties. We’re close to concluding two partnerships of this kind: with Vietnam and with South Korea. These countries are our friends, but we also have to embrace realpolitik. And look further than our close friends.

We have to be open to working with other countries beyond our like-minded partners, and take a pragmatic line where it’s needed. These are choices we are going to have to make in order build a sustainable, net-zero economy. 

The third action I believe the Netherlands should take, is to create strategic reserves of critical minerals.

As things stand, if supply chains fail anywhere, it’s only a matter of weeks, or even days, before our economy feels the pain.  In the current, unstable world order, this scenario is far from unthinkable.

That’s why we should stockpile the most essential minerals, so that we can withstand shocks to supply chains. We already maintain reserves for oil, the fuel of today’s economy. So I think it’s vital we do the same with the fuel of tomorrow’s economy: minerals. Countries like Japan, South Korea, and the United States are already taking steps in this direction.

Of course, this also raises questions like ‘which raw materials should we focus on’? In my view, we’re talking about the resources in industries where the Netherlands excels, like the offshore wind industry, or the semiconductor industry.

This is a challenge that neither the business sector nor the government can tackle alone. So we must come together to discuss business needs and how to satisfy them.

All these things take time, so there is no further time to waste. Because climate change is happening fast, and in worrying ways. What’s more, right now we’re not making fast enough progress in our economic transition to stop this.

Today’s economy is not sustainable – anywhere along the supply chain. This is a global challenge, in the clearest sense of the word. It’s something that we all face – together.

Whether you’re in a mineral-exporting country, facing the consequences of unsustainable and polluting mining. Or in a mineral-importing country, facing the constant threat of shortages and disruptions.

We have to work together to create something better. A system that works for everyone; based on mutual partnerships, mutual respect, and the recognition of each other’s interests. A system that offers meaningful involvement to local communities in mining areas, as well as an affordable and reliable supply of minerals to companies that produce the technologies on which the new economy relies.

This is what Europe and the Netherlands should offer the world: a sustainable, fair alternative. We’re not just interested in importing minerals, but also in exporting investment and improvement: the added value.

For that reason, helping countries make their mining industry more sustainable is one of our top priorities. We want all parts of the supply chain to benefit – in terms of profits, jobs, and a clean environment.

Ladies and gentlemen,

I believe that we have what it takes to create this new economy; a global system that offers better chances to everyone. In order to create that system, we have to take the necessary steps – and we have to take them together. To me, this is the definition of a global opportunity, one that offers prospects for every country.

This institution, ITC, was founded with a clear mandate to help developing countries. And that’s still part of your mission today. That makes you a part of the Dutch approach to solving global challenges: one founded on openness and cooperation.

I hope that after your studies here, at this beautiful new faculty building, those of you that come from abroad will continue to feel connected to the Netherlands. Through the friendships you make here, the knowledge that you gain, and the experiences you have. The challenges that lie ahead are enormous. And we will need each other in order to turn them into opportunities.

Thank you.