Iniciativa Matérias Primas Raw Materials Initiative. Gwenole Cozigou, DG Enterprise and Industry EC

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1 INICIATIVA MATÉRIAS PRIMAS: RUMO AO FORNECIMENTO SEGURO E À GESTÃO SUSTENTÁVEL DOS RECURSOS MINERAIS EUROPEUS 23 de Fevereiro de 2010 Raw Materials Initiative: towards to mineral resources secure supply and sustainable management Iniciativa Matérias Primas Raw Materials Initiative Gwenole Cozigou, DG Enterprise and Industry EC UNIÃO EUROPEIA Fundo Europeu de Desenvolvimento Regional

2 Conference on Raw Materials Initiative "The Raw Materials Initiative and status reports from ad hoc working groups" Dear Chairman, ladies and gentlemen! Check against delivery I would like to thank the organisers for taking the initiative of setting up today s conference and to allow me to present the political initiative that was taken at the European level on raw materials. This event is particularly welcome given that the success of the EU Raw Materials Initiative depends on how we can work together with Member States, in order to address the challenges that we are collectively facing in terms of access to raw materials. I am also grateful to be given the opportunity to present the Raw Materials Initiative in more detail. While everybody is aware of our supply challenges for energy resources like oil and gas, the same attention has not been given to similar challenges for non-energy raw materials. We are all very much aware that these materials are essential for the innovation and competitiveness of the European economy. High tech metals are increasingly essential for the development of technologically sophisticated products, such as computers, mobile phones, and flat screen TVs. Cars contain up to 40, and computer chips even up to 60 different nonenergy raw materials. High tech metals also fulfill a critical role in innovative green technologies, such as platinum for car catalysts, indium for solar panels and super alloys with rhenium or germanium also used for energy efficient modern aircraft. Not only ores and their metals play an important role to our economy; non-metallic minerals are also important, namely for use in the construction, chemicals, automotive, aerospace, and ICT sectors. Portugal can play an important role in order to supply some of these raw materials. You have for instance resources of tungsten and Portugal is already one of the world leading producers 1

3 of tungsten, tungsten being one of the essential raw materials to key downstream sectors requiring high-quality steel products. These examples only to stress that raw materials and access to them are becoming increasingly important and challenging. But what are these challenges? Firstly, the European industry and economy is highly dependent on imports. In 2007 the EU had a minerals trade deficit of more than 20 billion. Moreover the EU needs to acquire many of the raw materials its needs on international markets, where distortions are increasingly being introduced or where the production is sometimes limited to few politically sensitive countries. Rare earths are a striking example of the issue at stake. These materials are needed for the production of automotive catalysts and metallurgical additives. There are growing concerns, not only in the EU, but also in the US and Japan, about access to these materials, given that China accounts for 97% of world production and is applying a very restrictive trade policy by imposing export quotas and taxes. Secondly, within the EU, exploration for and extraction of minerals often face increased competition for the use of land for different purposes, as well as often cumbersome land use permitting processes and strict environment restrictions, at European, national or regional level. There is nevertheless potential in this sector in Europe. We still have important deposits within the EU. Portugal is a good example of how a resource-rich country with a longstanding mining tradition can contribute to the challenges Europe is facing in this domain. In a broader context, the European non-energy extractive industries can play a key role in the further development of our resources. This is a dynamic sector that generated a turnover of about 49 billion and provided employment for about 288,000 people in

4 When speaking about mineral deposits, we should stress the importance of the off-shore dimension. This provides the possibility of extra prospective sources to be exploited by Europe. In particular, countries with a long maritime tradition may play an important role in this new frontier for the extractive industries. But we do not only need to address the challenges that prevent access to or the knowledge of primary raw materials and their deposits. We must also make full use of our probably biggest potential mine, namely secondary raw materials. Recycling of metal products puts less pressure on the need for natural resources. It also presents the major advantage of allowing for substantial savings on energy costs. For instance, producing 1 tonne of aluminium from aluminium scrap consumes only 5% of energy needed by a process using primary raw materials. The key role of access, use and recycling of raw materials for meeting the challenges of sustainable development and competiveness has been fully recognised. These issues are at the heart of the Raw Materials Initiative that was launched by the Commission in November The Initiative was broadly supported by Member States within the framework of the Competitiveness Council in May and December To sum up, the RMI is an integrated strategy based on three pillars which are: First pillar: ensure fair access to raw materials from outside the EU Second pillar: set the right framework conditions for access to raw materials within the EU, so that we foster a sustainable supply of raw materials from European sources; Third pillar: boost overall resource efficiency and promote recycling. Furthermore, as a priority action, the Commission proposed to define critical raw materials for the EU. So, where are we? Let me start with the end. A methodology has been developed to assess critical raw materials. 3

5 A working group was set up to assist the Commission with this work. The group gathers representatives of the most concerned stakeholders from industry, Member States and NGOs. It was formed in order to establish a first list of critical raw materials for the EU and it is consequently developing a pragmatic and objective approach to define which raw materials are critical to the EU economy. The group has already developed a transparent methodology which is based on the assessment of economic importance and of different types of risks such as, for example, the political instability of supplying countries, the level of concentration of producing countries, the potential for substitution, the environmental impact and so on. All-in-all, 39 different types of raw materials, composed of industrial minerals (e.g. clay and lime), ores and their related metals (e.g. copper and rare earths), have been chosen to be examined within this criticality assessment. The first results are expected by June It is intended on that basis to develop recommendations of actions with the view, for instance, to securing access from abroad, enhancing further exploitation of EU natural reserves, and/or promoting recycling, material efficiency or substitution. The list of critical raw materials is expected to be regularly updated, probably every five years. Nevertheless, I want to emphasise that - besides this important work on 'criticality' - the RMI covers various many issues that are relevant for a whole range of raw materials, not only those that will be classified as critical. And there it is time to come back to the 3 pillars of the initiative. The first pillar (access to RMI outside the EU) implies actions at European level notably in 2 policy fields: trade policy and development policy. As far as trade policy is concerned, we have to act both bilaterally, for example when negotiating agreements with trade partners, and multilaterally, in particular within the framework of the WTO. As a first initiative following the adoption of the RMI, the Commission (in co-operation with the USA) requested consultations with China within the WTO framework, as a first step to addressing illegal export restrictions introduced by China 4

6 on a number of raw materials which are crucial for the steel and chemicals industries. These raw materials are bauxite, coke, fluorspar, silicon carbide, silicon metal, manganese, magnesium, zinc, and yellow phosphorus. As the Chinese did not respond positively to the request, the WTO decided to establish a Panel in the course of January This is an ongoing process, and it may not even stop there. A second batch of critical raw materials is presently under consideration. We are also active in seeking to achieve a fairer and more development-oriented market for raw materials. The Commission has established contacts with Member States, civil society, industry and other key institutional players such as the European Investment Bank, the World Bank, and UNCTAD in order to define ways to promote good governance in mining in resource-rich countries. There was a first exchange in October 2009 which paved the way for further cooperation. This is currently work-in-progress, but we are looking at a number of issues, namely ways to increase transparency in resource-rich countries as well as ways in which the European Union could support existing programmes such as the World Bank's EITI++ programme, which seeks to help countries manage their resource wealth for the good of society. All-in-all there is definitely a growing interest for these issues at the international level. This is why we welcome the leading role taken by Portugal in the UN within the area of sustainable development, particularly in the area of mining. The second pillar targets access to resources within the EU. A working group was set up with the aim of collecting relevant information and data concerning framework conditions for exploring and extracting raw materials in the European Union. The establishment of this group has also allowed the Commission to invite Member States to identify and exchange best practices in the area of sustainable land use management and permitting. 5

7 The group will give input to the Commission with regard to land use for exploration and extraction, as well as on national geological surveys. In this context I like to point out that the very active and skilled input of Portugal to the work of the group is very much appreciated. Furthermore, we also try to encourage better networking of the European geological surveys with the aim of increasing the EU's knowledge base (for instance, within FP7, two clusters out of three of the ProMine-Project as well as OneGeology-Europe are dealing with the integration and harmonisation of geological information and data). In the longer term, the working group will identify possibilities to integrate sub-surface components and spatial information of land-use management into the land monitoring core service of GMES (Global Monitoring for Environment and Security/GMES). In particular, this work benefits from the support of the consolidated experience of experts from Geological Surveys. In this context, the Commission sent a questionnaire on best examples in the field of land use management related to NEEI, better Networking of Geological Surveys and on GMES to Member States and end-users. The quantity and quality of the replies received reflects the importance of the questions raised. We have received replies from stakeholders in 22 Member States as well as four third countries (Albania, Canada, Norway, and Ukraine). 80 replies were sent covering Land-use issues, 55 networking and 33 GMES. The working group has already identified best practice examples, and has also started to prepare the report with findings which is foreseen to be finalised by June The results of this exercise will be integrated in the overall report that the Commission will prepare on the implementation of the RMI foreseen for the end of the year. In parallel, efforts have been launched to develop guidelines on how to reconcile extractive industries activities with the requirements of NATURA 2000 legislation aiming at protecting identified sites. 6

8 The extractive industry mining has an unavoidable impact on the earth's surface. However, the potential of negative impacts (water pollution, changes in groundwater flow patterns, loss of biodiversity, air pollution, dust and noise) depends on a number of variables, such as the type of mining and the environment in which mining activities take place, including climate conditions. The reasonable concerns of civil society in the past were mainly linked to water pollution. Modern sustainable mining management takes a holistic approach to this challenge, for example, by employing good ground water management methods which minimise these environmental risks. In addition, a significant loss of biodiversity would be tragic for all of us. Hence the Commission redefined its goals on biodiversity and has this year launched the 'year of biodiversity'. In particular, mining activities for gravel and other aggregates have convincingly demonstrated that some mining sites can actually have positive effects on biodiversity, and can even increase it in providing niches for species in danger. It is important that these positive examples be known to a wider audience, in particular to local civil society. The Commission has therefore set-up an internet platform where such best practice examples can be presented to a broader public. Furthermore, an annual competition 1 for 'best practice projects is being organised among Natura 2000 sites. The GREEN WEEK (1-4 of June) will be a good opportunity to present those best practice examples to the public. We also appreciate the efforts of industry in being proactive and transparent, for example by opening quarries to visitors. Letting the wide public know about this is of tremendous importance to change the image of mining. We in DG ENTR are currently finalising discussions with our colleagues in DG ENV in order to establish guidelines with the aim of better defining the conditions in which the extractive industries conduct their operations, all-the-while of course- respecting Natura 2000 environmental goals

9 If we want to improve the access to raw materials within the EU, it is also necessary, beyond issues related to environment, to address questions related to knowledge. We know that there is a need for skilled personnel and that more and better knowledge and innovative research and development are needed. Europe faces in general a lack of students in scientific fields, and a lack of qualified personnel, including technicians. Unfortunately, public opinion is not sufficiently aware of this and the interest in scientific issues is not developed enough in most Member States. This is true for all scientific and technical fields. This is also true for those related to raw materials and there is a lack of awareness of the importance of raw materials to our societies. There is also a lack of understanding in basic geology and related earth sciences. And only a few Member States still provide lessons in earth sciences in school programmes. Actions as promoted via the ERASMUS MUNDUS (Erasmus Mundus Minerals and Environmental Programme) are aimed at improving knowledge and skills. Already successfully put in place is a system of exchange of knowledge and skills between, on one hand, universities and, on the other, enterprises and institutes in order to promote technology and know-how transfer across the European Community. This exchange covers the fields of Mining Engineering 2, Mineral Engineering 3, and, finally, Geotechnical and Environmental Engineering 4. Hopefully, greater expertise will allow over time for the application of more advanced mining techniques, which in turn would help to have safer and more secure access to difficult-to-reach reserves or to achieve greater efficiency in extracting low grade reserves (a good example of this is the Aitik-site of Boliden AB in Swedish Laponia). Initiatives like the European Minerals Days of which the next one- will take place from May 2011 are also very welcome, since they help raising awareness about the role of the extractive industries and make them more attractive for young people. 2 (EMC-Programme covers underground and open pit mining subjects) 3 (EMEC-Programme focuses on mineral processing, recycling and metallurgy) 4 (EGEC-Programme has an integrated approach and includes subjects concerning rock mechanic, underground space constructions, rehabilitation and environmental issues) 8

10 In addition, activities under the 7 th framework programme for research and Development (FP7) represents another significant step towards a broader knowledge in all related aspects of raw materials. Let me make a brief remark on some of the ongoing FP7 projects: ExPerl, ProMine and the POLINARES. EXPERL is a project aimed to efficient exploitation of EU perlite resources for the development of a new generation of innovative and high added value micro-perlite based materials for chemical, construction and manufacturing. ProMine regroups nine different working programmes where innovative concepts and processes for strategic mineral supply as well as new high added value mineral-based products are targeted. The recently started POLINARES project POLINARES means POLIcy for NAtural RESources- concentrates on the global challenges faced with respect to access to oil, gas and mineral resources over the next 20 years and proposes solutions for the various policy actors. These three projects aim at just some of the challenges where research is needed. But there is still plenty of space for other high-quality interdisciplinary research proposals where besides universities and research institutes, industry can play an important role. The next call for proposals under FP7 is foreseen for July The EU-Technology Platform on Sustainable Mineral Resources launched by the Commission is a useful instrument for stakeholders to discuss at an early stage projects to be proposed for financing. It is very likely that one of the future calls will be aimed at biodiversity in the marine environment, which reflects also the increasing importance of marine mining. The Third pillar of the RMI addresses issues more directly related to demand (rather than supply) of raw materials, namely the efficient use of the resources and recycling. The aim here is to achieve win-win situations that, lower energy needs and the consumption of raw materials, thereby reducing costs and risks for industry and society. One important work stream under this pillar consists in the establishment of 'end of waste' criteria. The new Waste Framework Directive of 2008 entitled the Commission to set criteria under which conditions certain specified waste shall cease to be waste. The objective is to encourage recycling in the EU by creating legal certainty and reduce costs for industry. 9

11 Currently work is being carried out for a number of waste streams, such as iron and steel, aluminium, copper crap and glass. Another important field of action consists in dealing with the problem of illegal exports of waste products outside of the EU, whereupon these products are then often dismantled under poor social and environmental conditions. While the Commission is concerned with all hazardous waste, of particular importance for my services and the minerals and metals recycling industry is the adverse effect which this has on the competitiveness of the recycling industry and ultimately on health and environment. In detail, these waste streams mostly cover electronic goods, end-of-life vehicles, batteries and metallic packaging. We are currently analysing the situation and will soon propose concrete recommendations so that existing illegal shipments of waste can be dealt with more efficiently. Last-but-not-least, as part of our Lead Market Initiative, we are currently examining ways in which to make Europe's recycling industry more competitive. While this project is not due to be completed until 2011, issues currently being investigated include measures to stimulate the recyclability of the products and the integration of recycled materials into products, as well as measures to stimulate demand for eco-innovations in recycling, and related technology and equipment. Final comments The Raw Materials Initiative has highlighted both the range of challenges facing Europe as well as the need for an integrated approach that ties together the EU s internal and external raw materials-related policies. Problems will not be overcome overnight, and they will not be overcome by the Commission alone, but the Initiative is an important first step in the right direction. The RMI should be seen as a living instrument helping to focus the attention and catalyse energies and efforts of the numerous stakeholders who need to act. I look forward to hearing more about your concerns and in particular your views on the way forward. Before I conclude, I would like to take this opportunity to address my particular thanks to Mr Carlos Caxaria and Mr Luis Martins for their contributions to the work that is currently being carried out in our working groups. 10

12 Thank you very much for your attention. 11