Strategy Isn’t Policy

Why Europe’s Critical Mineral Projects Cannot Attract Capital

Europe and the UK continue to release critical-minerals strategies. These documents outline familiar aims: increasing domestic processing, reducing dependence on China, and building more resilient supply chains. On paper, the direction looks positive. In practice, almost no major project in this area has secured bankable financing.

The reason is simple. Strategy and policy are not the same. A strategy states what a government wants to achieve. A policy creates the conditions that make it possible. Europe and the UK have produced many strategies but have introduced very little policy that shifts risk in a way that attracts capital.

Critical-minerals projects face long development timelines, commodity-price volatility, jurisdictional risk, and in some cases first-of-a-kind processing requirements. These factors push the natural risk level beyond what most investors can support without some form of state participation. European capital markets function as they are designed to: they allocate capital where the balance of risk and return fits their mandates. When governments declare a project “strategic” but offer no risk-sharing, investors price the project accordingly — as high risk with uncertain delivery.

A former colleague once put it bluntly:

“When you see the word ‘strategic,’ read high risk.”

Investors behave this way because it has generally proven correct. Without policy support, valuations fall to a small fraction of the underlying economic potential. This is not a judgement on project fundamentals. It is a reflection of unmitigated risk.

Until governments move beyond strategy and introduce practical policies that share or reduce risk, Europe’s critical-minerals ambitions will remain difficult to deliver.