EU to Step Up Raw Materials 'Diplomacy'

'Materials diplomacy?' That sounds ominous...seems a resource constrained world is sneaking up on us faster than we think...

Reposted in full from EurActiv, 18 June 2010

'An EU expert group has identified 14 raw materials seen as "critical" for EU high-tech and eco-industries and suggested that the European Union's global diplomacy should be geared up to ensure that companies gain easier access to them in future.

"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 and we have to ensure that we have the necessary elements to do so," said Industry Commissioner Antonio Tajani, presenting the group's final report on 17 June.

The supply risks identified for the 14 critical raw materials highlighted in the report primarily relate to the fact that global production is concentrated in a handful of countries: China, Russia, the Democratic Republic of Congo and Brazil.

The low recycling rates of these materials and the difficulty of substituting them with others add to their "criticality", the report said.

To guarantee that industry can access these essential raw materials, "we need fair play on external markets," said Tajani. Encouraging supply from EU sources, improving resource efficiency and increasing efforts to recycle were also highlighted in the report as ways forward.

Of the 41 minerals and metals analysed, the expert group listed the following 14 raw materials as critical for the EU: antimony, beryllium, cobalt, fluorspar, gallium, germanium, graphite, indium, magnesium, niobium, PGMs (Platinum Group Metals), rare earths, tantalum and tungsten.

The group cites forecasts indicating that demand for some of them might more than triple by 2030 compared to 2006 levels.

These materials are an essential part of both high-tech products and every-day consumer items, such as mobile phones, thin-layer photovoltaics, lithium-ion batteries, fibre-optic cables and synthetic fuels.

They also suggested that the list be updated every five years.

Promoting exploration within the EU and beyond

The experts recommend a number of policy measures to improve access to primary resources and stress the need to increase recycling and promote research into substituting and improving the efficiency of materials.

Policy measures to improve access to primary resources should cover "fair treatment of extraction with other competing land uses", promote exploration and extraction within and outside the EU and "ensure that exploration by companies is regarded as a research activity," the report says.

It also advises the EU to promote good governance, capacity-building and transparency in relation to the extraction industry in developing countries.

The European Commission and the African Union Commission agreed on 8 June to develop bilateral cooperation in the field of raw materials and work together on issues such as governance, infrastructure, investment and geological knowledge and skills.

Regarding trade and investment, the group advises the EU to consider shaping a new EU-wide policy on foreign investment agreements to "better protect EU investments in raw materials abroad".

The bloc should also consider the merits of pursuing dispute settlement initiatives at World Trade Organisation (WTO) level "to include in such initiatives more raw materials important for EU industry".

The EU filed a joint complaint with the United States against China at the WTO in June last year, accusing Beijing of unfairly favouring its industries by restricting access to nine types of key raw materials (EurActiv 24/06/09).

China, which is responsible for 95% of global 'rare earth' production (one of the 14 materials listed as critical to EU industry), plans to ban exports of some of them as of 2015. Beijing's plans are a cause for concern among manufacturers of high-tech products ranging from computers to electric car batteries and wind turbines (EurActiv 09/06/10).'