Raw materials – European industry needs access to critical raw materials
Raw materials are an essential part of both high tech products and every-day consumer products, such as mobile phones, thin layer photovoltaics, Lithium-ion batteries, fibre optic cable, synthetic fuels and many other products. However their availability is increasingly under pressure according to a report published by an expert group chaired by the European Commission on 17 June 2010.
In a Communication issued on 2 February 2011, the Commission again highlighted the importance of raw materials and the danger of the excessive volatility of prices on commodity markets. These price fluctuations, which are often the result of protectionist measures, increase inflation and distort global raw material markets. This in turn has a negative effect on numerous European sectors from the agricultural industry to the car industry.
The key elements of the Europe's integrated strategic approach include:
- Improving the integrity, transparency and stability of commodity derivatives markets, inter alia through a review of the Directives on Market Abuse and Markets in Financial Instruments;
- Undertaking additional research on developments in financial and physical commodities markets with the aim of identifying how the linkages work;
- Regularly updating the list of 14 critical raw materials already identified by the European Commission;
- Monitoring the development of access to critical raw materials with the view to identifying priority actions;
- Strengthening the EU’s trade strategy in relation to raw materials and pursuing the "raw material diplomacy" to address raw materials priorities in bilateral and multilateral frameworks and dialogues;
- Developing a bilateral co-operation with African countries in the area of raw materials, based on promoting governance, investment and geological knowledge and skills.
In this first ever overview on the state of access to mineral raw materials in the EU a selection of 14 raw materials are judged as "critical" for the European Union: Antimony, Beryllium, Cobalt, Fluorspar, Gallium, Germanium, Graphite, Indium, Magnesium, Niobium, Platinum Group Metals, Rare earths, Tantalum and Tungsten. Mercury is not yet on the list.
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In the worst case European industry might be forced to stop production in the EU if the necessary raw materials cannot be imported or that they are so expensive that the international competitiveness of European Enterprises would suffer. With a view to avoid such shortages, European Commission Vice-President Antonio Tajani underlined: "It is our aim to make sure that Europe’s industry will be able to continue to play a leading role in new technologies and innovation. Therefore, we have to ensure that access to raw materials for enterprises will not be hampered. It's important to have a fair play on external markets, a good framework to foster sustainable raw materials supply from EU sources as well as improved resource efficiency and more use of recycling.''
Forecasts indicate that demand might more than triple for a series of critical raw materials by 2030 compared with the 2006 level. The growing demand is driven by the growth of developing economies and new emerging technologies. Their high supply risk is mainly due to the fact that a high share of the worldwide production mainly comes from a handful of countries: China (antimony, fluorspar, gallium, germanium, graphite, indium, magnesium, rare earths, tungsten), Russia (PGM), the Democratic Republic of Congo (cobalt, tantalum) and Brazil (niobium and tantalum). This production concentration, in many cases, is compounded by low substitutability and low recycling rates. Moreover, many emerging economies are pursuing industrial development strategies by means of trade, taxation and investment instruments aimed at reserving their resource base for their exclusive use.
Global demand of the emerging technologies analysed for raw materials in 2006 and 2030 related to today’s total world production of the specific raw material
| Raw material | Production 2006 (t) | Demand from emerging technologies 2006 (t) | Demand from emerging technologies 2030 (t) | Indicator 20061 | Indicator 20301 |
|---|---|---|---|---|---|
| Gallium | 152 | 28 | 603 | 0,18 | 3,97 |
| Indium | 581 | 234 | 1.911 | 0,40 | 3,29 |
| Germanium | 100 | 28 | 220 | 0,28 | 2,20 |
| Neodymium (rare earth) | 16.800 | 4.000 | 27.900 | 0,23 | 1,66 |
| Platinum (PGM) | 255 | very small | 345 | 0 | 1,35 |
| Tantalum | 1.384 | 551 | 1.410 | 0,40 | 1,02 |
| Silver | 19.051 | 5.342 | 15.823 | 0,28 | 0,83 |
| Cobalt | 62.279 | 12.820 | 26.860 | 0,21 | 0,43 |
| Palladium (PGM) | 267 | 23 | 77 | 0,09 | 0,29 |
| Titanium | 7.211.0002 | 15.397 | 58.148 | 0,08 | 0,29 |
| Copper | 15.093.000 | 1.410.000 | 3.696.070 | 0,09 | 0,24 |
1The indicator measures the share of the demand resulting from driving emerging technologies in total today's demand of each raw material in 2006 and 2030;
2Ore concentrate
VP Tajani at the Conference on the EU Raw Materials Initiative in June 2010
Establishing a preferential relationship with Africa
At the Fourth AU-EU College-to-College on 8th of June 2010 in Addis Ababa, Vice-President Tajani discussed matters of great importance in the relationship between the two continents such as a sustainable policy to improve access to raw materials, the opportunity to foster regional integration and infrastructures, with particular attention on the potential of space applications.
With regard to access to raw materials, the African Union Commission (AUC) and the European Commission have agreed to work together on governance, infrastructure and geological knowledge and skills. Africa has a great potential which is not fully developed. During the discussion Vice-President Tajani emphasised: "There are many synergies between the external development dimension of our raw Material Initiative and the economic development dimension of the Africa Mining Vision". Cooperation on raw materials could be implemented through the development policy tools that already exist, by fostering African countries' capacity of management of raw materials and revenues. More information 
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For forecasts on how future technological changes may influence the economic importance of raw materials and for the full list of recommendations, see press memo: Report lists 14 critical mineral raw materials
Press release: Report forecasts shortages of 14 critical mineral raw materials
Communication on the Raw Materials Initiative "Meeting our critical needs for growth and jobs in Europe"
