Raw materials trades – EU Policy and the impact of developing countries on future trade flows

Raw materials trades – EU Policy and the impact of developing countries on future trade flows

Dr Corina Hebestreit, Director, Euromines

European association for mining industries, metal ores and industrial minerals

Euromines – what it is

Recognized representative of the European metals and minerals mining industry;

Service provider to its members with regard to EU policy;

Network for cooperation and for the exchange of information throughout the sector within Europe;

Link to contacts with the mining community throughout the world.

www.euromines.org

» 2


Euromines Membership

Represents large and small companies and subsidiaries in Europe and in other parts of the world;

18 national mining federations 27 direct company members

350,000 jobs;

Representing 42 different metals and minerals

For some metals and minerals, Europe is the world's leading producer.

www.euromines.org

» 3


Percentage of different minerals represented in Euromines

www.euromines.org

» 4


Countries represented

Austria Bulgaria Czech Republic Finland France Germany Greece Hungary Ireland Norway Poland Portugal Slovakia Sweden Turkey United Kingdom

www.euromines.org

» 5


Economy and Metal Consumption


Global consumption of all metals has been increasing in the last 20 years, except some minor metals like Cd


CRM are not only rare metals : The case of copper

Copper demand for automotive industry will increase (electrification & volume effects)

Not only “rare” metals, but also commodities are critical

Look beyond our own sector

Current marginal market price

Supply and Demand Imbalance Price scenario

0

5

10

15

20

25

1990 2000 2010 2020

Mt

WORLD COPPER SUPPLY

WORLD GLOBAL DEMAND

ESTIMATED AUTOMOTIVE DEMAND

5,7% of Global Demand 9%

Competitive Recycled Cuprice

1000

3000

5000

7000

9000

11000

1990 2000 2010 2020$/

t

Marginal market price (incl. smelting cost…)

Floor production cost

Competitive recycled Copper price

StockRecycling


Growing Demand: Example 1: copper

9


“In-use” lifeof Copper

Secondary resource baseavailable today

8.5 Mt/yr50% of current annual demand

25? yrs

Minimum needs exceed available scrap


Growing Demand: Example 2: industrial minerals

11


Intensity of use: Steel

http://stigmes.gr …… National PerspectiveNational Perspective 12


GDP and steel intensity

13


EU Industrial Policies and a related Material Demand Forecast

Example: Predicted growth rates for photovoltaic cells

Development of raw material demand

0

200

400

600

800

Tonnes

Indium Selenium Gallium Cadmium Tellurium

2007

2020

2040

Demand forecast for materials for photovoltaic cells 2007-2050

2007

2010

2020

2030

2040

2050


Copper demand for drive trains in standard and hybrid cars - 2006 - 2026 (two options)

2006

2006

2026 (1)

2026 (1)

2026 (2)

2026 (2)

0 10 20 30 40 50 60 70

standard passenger car

hybrid passenger car

copper in kgSource: Fraunhofer 2009

EU electrification of cars


Neodym in permanent magnets for hybrid cars

2006

2006

2026

2026

0 0,2 0,4 0,6 0,8 1 1,2

Standard passenger car

hybrid passenger car

Neodym in kgSource: Fraunhofer 2009

EU electrification of cars


0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

t/year

2006 2030

Silver 2006 - 2030 - new technologies

Solar cells

Displays (OLED)

Solarthermic generators

RFID tags

Nano-silver

Micro-electric condensators

Leadfree solders

Other new technologies


Exploration

18

Average yearly investments forecasts in non-ferrous mineral exploration by regions ($ value on 31/12/07, corrected by the change in the CPI index).

Source: Metals Economic Group, Wikipedia, US Department of Labor Statistics.


Investment is coming

Mining industry capex, NFMs, 2011US$ bn

Source: CRU, industry estimates

(est)


The EU’s Raw Materials Imitative and the EIP on Raw Materials

European Raw Materials Strategy COM(2008) 699; COM(2011) 25

Europe 20204 Flagships Initiatives out of 7 → raw material strategy synergies

An industrial policy for the globalisation era An agenda for new skills and jobs Resource Efficient Europe Innovation Union


EIP on Raw Materials: Key components Technology-focused policy areas

Exploration, extraction, processing, recycling

Substitution

Non Technology policy areas

Improving Europe's raw materials regulatory framework, knowledge and

infrastructure base, e.g. access to land.

Promotion of excellence in resource efficiency

International cooperation

Promoting appropriate international cooperation

ETP SMR, Research

projects, ERA-MIN

Implementation of the RMI

EIP

Level playing field WTO, Trade agreements


First pillar

Access to raw materials on world markets at undistorted conditions

Key actions: pursuing raw materials diplomacy; promoting enhanced international cooperation; access to primary and secondary raw materials should

become a priority in EU trade and regulatory policy; EU policy development at three levels: strengthening

states; promoting a sound investment climate; promoting sustainable management of raw materials.


Raw materials diplomacy

Seeking cooperation with USA and Japan Integrating raw materials aspects into the bilateral trade

negotiations, e.g. South America Promoting sustainable extraction of mineral resources

worldwide Developing access to resources in Greenland Capacity building for the African minerals sector


EU Policy on trade in raw materials

Situation Increasing numbers of barriers distorting global markets…

Leading to suboptimal allocation of scarce resources:

There is an economic cost for the lack of trade!

Trade is a key policy in the Raw Materials initiative and includes Negotiation of disciplines in bilateral and multilateral trade agreements (e.g. on

export restrictions, including export duties)

Monitoring, review and WTO enforcement

Dialogue and outreach activities


Second pillar

Foster sustainable supply of raw materials from European sources

Key actions: having the right framework conditions

securing access to the land; improving the knowledge base of mineral deposits within EU; better networking between the national geological surveys; promoting research projects; address the problem of skill shortage; raising awareness of the importance of domestic raw materials for

the European economy; developing guidelines to reconcile Natura 2000 areas with

extractive activities nearby.


Production Overview EU 27

Summary unit EU-27 World Share EU Source

Iron t 16.052.6181.121.172.10

7 1,4% WMD

Ferro aloys t 369.480 34.034.790 1,1% WMD

Non-ferrous t 8.353.557 269.931.869 3,1% WMD

Precious metals kg 1.714.846 24.030.819 7,1% WMDIndustrial minerals t 116.246.905 807.772.471 14,4% WMDConstr. Materials t

3.075.000.000

22.000.000.000 14,0% UEPG

Mineral Fuels SKE 746.022.40416.403.870.6

13 4,5% WMD

26


Main Mineral Deposits of Europe

mercredi 18 mai 2011 Service Ressources Minérales > 10

Lapland (Fe)

Skellefte-Pyhäsalmi (Cu, Zn, Au, Ni, Co)

Bergslagen (Fe, Zn)

Foresudetic basin (Cu, Co, Pt, Re)

Carpathians (Pb, Zn, Au)

Balkans (Cu, Au, Sn)

Irish (Zn)

Iberian Pyrite Belt (Cu, Zn, Sn)

AND KEY METALLOGENIC PROVINCES

27


ProMine Project: Nano-particle products from new mineral resources in Europe

27 partners from 11 EU countries Total budget: 17 M €

Assessing the EU mineral potential


EU Analysis of critical raw materials

29


Critical Raw Materials in Europe

30


Suurikuusikko Au

Talvivaara Ni

Kevitsa Ni

Suhanko PGE?

Kolari Fe

Laiva AuPampalo AuKylylahti Cu-Co

Mining of ore in Finland – new projects


Third pillar

Reduce the EU’s consumption of raw materials per functional unit

and improve product performance Key actions:

promoting resource efficiency, recycling;

substitution and increased use of renewable raw materials;

ensuring that the treatment of waste takes place under fair and sustainable conditions in relations with third countries.


Steps forward since 2012

33

A European Innovation Partnership on Raw Materials (EIP) will be created. Members are: the national mining authorities, the European Commission and the Mining Industry

This would stimulate and foster research into new and more resource-efficient management and will also review the legal framework


From now to 2030

Revised Mineral Policies such as: land-planning and mine waste management (by 2015)

Modern database and economic assessment of EU primary and secondary resources (by 2020)

Further steps in automation and high tech extraction (by 2030)

New technologies for recovery and recycling (by 2030)


Education and skills

35

Education, training and skills of all sorts will be a prerequisite for such an agenda and the ambitious targets

The sheer number of people required in the coming decade does not seem to be available

investment in and advertisefor this specialized education is needed


Vision for 2020 and beyond

By 2015 EIP on Raw Materials: research into new and more

resource efficient resource access and management; review of regulatory requirements

Complete database by MS on old mine waste sites (EU Mine Waste Directive)

EU Standard methodology for prioritisation and economic assessment of such deposits

All Member States have new or revised Mineral Policies in place

All MS Land-planning policies include references to extractable mineral deposits

Revision of BAT note on mine waste management



By 2020 Complete modern database and

economic assessment of EU primary and secondary resources

Revised regulatory framework facilitating sustainable management of resources and uptake of innovation

EU Leadership in technology for all aspects of resource management (exploration, extraction, processing, re-processing, reuse, recycling, recovery, design, …)

EU ressource diversification



By 2030 Only High tech mines in place in

Europe Technology proven and being

exported Optimised valorisation of available

resources, i.e. new technologies in place, removal of legacy sites, increased reuse, recovery and

recycling rates, material efficiency use in higher

performance products

BEFORE RESTORATION

AFTER RESTORATION


Results of EU industrial policiesMaterial flows

2009

2030

Waste

Secondary materials

Primary materials

Products

Waste

Secondary materials

Primary materials

Products

Europe

Europe

China

China


Chinese wisdom:« When the wind of change blows, some build walls, while others build windmills.”

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Raw materials trades – EU Policy and the impact of developing countries on future trade flows

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