EU launches strategy to secure raw materials | Business| Economy and finance news from a German perspective | DW | 06.03.2012
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EU launches strategy to secure raw materials

The worldwide supply of raw materials is under increasing pressure as today's high-tech industries demand ever-larger amounts of minerals and metals. The EU is trying to meet the challenge.

It's the stuff that high-tech dreams need if they are to come true: rare raw materials like rhodium, tantalum, cobalt or coltan that are used in almost every innovative consumer product. Without these metals and minerals, there would be no mobile phones, iPads, flat screens, catalytic converters or electric cars.

Without them, the modern world would not exist in its present state. But the enormous number of ways in which these commodities can be used go together with the enormous dependence which European industries now have towards the suppliers of these products, almost all of which have to be imported. Supply can barely keep up with demand. China has curbed exports to meet growing domestic demand - and that's a threat for Europe, which depends heavily on China for it supplies. Businesses across the continent worry about looming shortfalls and increased prices.

Innovative partnership

Antonio Tajani

European Commissioner Tajani says Europeans must join forces

For years, the EU debated how Europe could hold its own in the battle for valuable raw materials. In February 2011, the EU Commission presented a strategy which many experts criticized as not going far enough. A year later, the Commission launched an "Innovation Partnership on Raw Materials" with revised, more concrete proposals. Together, EU member states, businesses, private and state researchers plan to further the exploration, extraction and processing of raw materials.

“We need to join forces to tap Europe's enormous own potential of raw materials," European Commission Vice-President Antonio Tajani said. "It will be the key to Europe's ability to develop today the technologies of tomorrow. Such innovation is decisive for Europe's competitiveness, sustainable growth and new jobs."

The Commission has set firm goals to be reached by 2020 and first results are expected within 1 to 3 years. The idea is to tap European raw material sources in order to reduce the dependency on imports. The EU Commission accepts optimistic estimates that Europe has unexploited mineral resources worth about 100 billion euros ($ 131.2 billion) - but they are to be found 500 to 1,000 meters underground or under the sea.

A mine in China

China has 36 percent of the world's rare minerals, but it mines 97 percent

Hubertus Bardt, an expert on raw materials at the Cologne Institute for Economic Research (IW) welcomed the Commission's proposals as an important step forward. "It's a bit late, but if they manage to do what they've planned, Europe is going in the right direction," he told DW. Bardt warned, however, that to be competitive, Europe must mine its resources "at a bearable cost."

Recycle electronic scrap

The EU Commission is aware of the cost factor, and hopes new technologies will help to extract materials more efficiently in deep, remote areas. The mining industry could become more competitive and sustainable by employing remote control and automation. Substitutes for critical raw materials have to be developed and electronic equipment must be recycled in a more environmentally friendly manner. Recycling is high on the agenda: on average, every EU citizen produces 17 kilograms of electronic scrap per year. The EU expects that figure to rise to 24 kilograms by 2020.

Hubertus Bardt

Bardt says China is not playing fair in the market

All EU member states are expected to agree to the innovation partnership, at least in theory - in practise, its concrete implementation could be problematic.

"Unfortunately, not all states work together," Reinhard Bütikofer, a German member of the Greens in the European Parliament, told DW.

Electronic waste is a great source of raw materials because it contains many rare metals that can be recycled, he said - but discarded electronic equipment is often exported illegally from the EU only to be incinerated. Bütikofer appealed to EU states to implement existing legislation to prevent this export, as a result of which, "the soil is poisoned, the health of children in developing countries is destroyed, and in addition, the raw materials are more or less gone."

No Chinese monopoly

A boy carries the shell of a computer monitor

Much European e-waste ends up in Africa

An innovation partnership, Bütikofer said, is certain to help make Europe less open to economic blackmail by China. But he added the EU should also develop partnerships with other producing countries in Africa or South America because European resources are not sufficient.

"China is very dominant where some rare raw materials are concerned - but only because Europe and the US have let it happen. By no means does China have a monopoly," he told DW.

Hubertus Bardt of the IW is convinced Europe needs international help to free itself from its dependance on Chinese imports. He said the biggest challenge is to keep the markets open and not to disturb the balance of import and export of raw materials.

"That is the big quarrel with China, which seals off its market and tries to draw production from Europe and the US to the country," Bardt said, pointing out that the government in Beijing has tried to force foreign buyers to process their raw materials in China.

Bardt urged Europe to counter that development in the framework of international trade agreements - and developing its own sources of raw materials will surely give the EU better negotiating leverage.

Author: Ralf Bosen / db
Editor: Michael Lawton

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