The European Commission closed the second round of applications for strategic project status under the Critical Raw Materials Act on January 15, 2026, with decisions expected in the second quarter of 2026 (Q2 2026). The process follows the approval of 47 mineral projects within the EU in March 2025 and a further 13 projects outside the EU in June, including four in Africa: in Malawi, Madagascar, South Africa and Zambia.
Seven months after those first non-EU designations, Africa has become a key testing ground for Europe’s efforts to secure critical minerals and reduce its dependence on China. The projects range from rare earth, graphite and cobalt developments to investments in processing, highlighting the EU’s growing focus on value-added supply chains beyond extraction.
However, the continent’s drive to move downstream has long been limited by weak infrastructure, energy shortages, water shortages and political risk. With 60 strategically labeled projects currently underway around the world, attention is focusing on what the strategic designation has actually achieved and whether Europe’s partnerships can translate political ambition into industrial reality.
The Zandkopsdrift rare earths project, developed by Frontier Rare Earths, is located in the Northern Cape province of South Africa and is expected to produce around 17,000 tonnes per year (tpa) of separated rare earth oxides, including 4,000 tpa of magnetic rare earths, plus 100,000 tpa of battery-grade manganese sulphate by 2030. Although it is often described as a mine, the project is mainly a process. operation: only 5% of capital costs are for mining, with 95% allocated to the processing plant, effectively a chemical refinery, as highlighted by James Kenny, CEO and co-founder of Frontier Rare Earths. Mining Technology.
The project is fully authorized, with mining, environmental and access rights secured, and its social and labor plan has been approved by local and national authorities. Work began in 2007 and, after more than 15 years of development, the project represents an investment of 700 million dollars (590.16 million euros) in large-scale chemical processing. During construction, it is expected to employ around 1,000 people, rising to 750 direct production jobs, with a further 1,500 indirect jobs supported through local services.
“Given the typical challenges that companies like ours – i.e. junior mining companies – face when developing a project of this scale and complexity, it is essential to secure the support of sovereign and supranational partners, as it provides greater access to industry players, financial institutions, financial bodies and downstream partners,” says Kenny.
“We therefore considered this a very positive step by the EU and decided to participate, knowing that success and recognition would reflect positively on both our company and our project.”
The Luxembourg-registered company spent four to six months preparing its application, which Kenny described as “very thorough and complete.” In the case of rare earths, the company had to demonstrate that the project could make a significant contribution to European industrial demand by 2030, quantifying projected production, EU demand and the volume of supply it could realistically provide to Europe.
While it is still too early to fully assess the impact of the project’s designation after just six months, Kenny says some benefits are already emerging.
“One of the advertised advantages of being a ‘strategic project’ for the EU is essentially speeding up permitting,” he explains. “That designation means it can be given some priority.”
The EU designation also provides certification, theoretically making it easier for industrial manufacturers such as Mercedes-Benz, Siemens or Stellantis to identify vetted suppliers. Frontier could then enter into trade agreements directly with those partners, rather than with the EU itself.
Kenny describes the process as a form of matchmaking, an introductory service that “has been very useful and valuable so far.” The company has since been invited to closed-door meetings with industrial and financial partners, where the EU supported the project and facilitated presentations.
While the results remain uncertain, Frontier expects the process to lead to purchase agreements, co-development partnerships and construction financing.
In Zambia, Kobaloni Energy is developing what it describes as Africa’s first cobalt sulphate refinery, designed to supply traceable cobalt suitable for electric vehicle batteries. The project, located near the Lobito Corridor, is designed to produce 6,000 tpa of cobalt sulfate (contained metal) and the company has completed a Class 3 feasibility study.
“We are currently busy raising capital for the project and aim to make a final investment decision in the second quarter of 2026. Construction of the plant would then take about 14 months, but we have to raise the capital first, and that is what is holding us back right now,” Johnny Velloza, CEO of Kobaloni, explains to Mining Technology.
If financing is secured in time, production could begin in the second half of 2027 and the project is expected to create 165 direct jobs at full capacity.
“What these projects do for us, particularly this one, is benefit us in many ways, first of all through job creation,” says Chipokota Mwanawasa, political advisor to Zambian President Hakainde Hichilema and deputy director of the Presidential Implementation Unit. Mining Technology.
According to Mwanawasa, the project’s impact extends beyond mining to downstream processing. The planned facility would be the first stand-alone cobalt refinery in Africa, according to Kobaloni Energy, moving part of the value chain away from exporting raw concentrate. In a region with more than a century of mining history, it points to the potential of the Copperbelt to support long-term industrial activity through processing infrastructure and related supply chains, rather than mining alone.
Mwanawasa adds that the project benefits from improved access to downstream markets, supported by EU partnerships in the region.
“The fact that the EU is partnering with Zambia and other countries through the Lobito Corridor also helps to ensure a form of market relationship. It is a strategic partnership,” he says.
Despite recent progress, Europe is still considered to be moving too slowly to reduce its dependence on a single supplier, particularly compared to faster-acting governments such as those of the United States, Canada, Australia, Japan and the Gulf States, including Saudi Arabia. Reliance on China for strategic materials remains substantial, and many industry voices argue that the EU’s efforts still fall short of what is needed to address the problem.
“Dependency is a systemic problem that requires systemic solutions; selecting strategic projects can only be a first step,” says Ludivine Wouters, managing partner at European investment advisory firm Latitude Five. “The hard work is to finance, structure and develop these projects and, more importantly, create a market for their production.
“In a context in which China takes full advantage of its vertically integrated and subsidized model to drive emerging competitors out of the market, Gulf players exercise significant investment capacity and African partners seek opportunities for industrialization and development. Europeans will have to rethink how they obtain and use minerals to better encourage the emergence of new production,” he explains to Mining Technology.
The challenge is compounded by the structure of the mining industry itself. Globally, less than 1% of exploration projects become operational mines, with some estimates closer to 0.1%, or one in every 1,000 prospects. At the earliest stage, the odds drop to one in 5,000, and successful projects typically take 15 to 20 years to go from discovery to first production.
The main obstacle remains obtaining financing. While the EU is expected to facilitate access to capital for designated projects, this is not the same as providing financing.
“That’s probably their biggest challenge. The number one problem in solving the EU’s critical raw materials supply challenges, and the number one way to solve it, is capital,” says Kenny.
“Deploy capital, take capital risks and act quickly. Policy is great, but you won’t be able to do it without capital, and right now there is a lack of capital.”
In December, the European Commission announced up to €3 billion in funding by 2026, along with a fast-track regulatory track for strategic projects, under its ReSourceEU Action Plan. However, the magnitude of the challenge remains enormous: the mining sector will need between $500 billion and $600 billion in new capital globally by 2040 to meet demand under current policy scenarios, according to the International Energy Agency’s Global Critical Minerals Outlook 2025, which also found investment growth slowing to 5% in 2024, down from 14% in 2023.
“EU-backed minerals projects in Africa move from policy to testing” was created and originally published by Mining Technology, a brand owned by GlobalData.
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