German industry warns of 'raw materials gap'[fr][de] 

"We are steering towards a raw materials gap," said Ulrich Grillo, chairman of the BDI commodities group and chief executive of German zinc producer Grillo-Werke.

"Global, European and national restrictions to commodities are threatening the growth of German industry, which is vital to overcoming the current crisis."

China alone restricted trade with raw materials and semi-finished products with some 373 export duties, he said in a statement . These especially distorted supplies of copper and the metal neodymium, used for laser equipment.

China planned to refund value added tax on imports of scrap metal from 2010, he said. When China made such refunds in the past, they had a "vacuum cleaner impact on the scrap market and sucked the world scrap metal market empty".

Germany needed such scrap metal as about 50% of German metal production involved scrap, he said.

Scrap metal: Waste or usable product?

European exports of secondary raw materials had risen strongly in past years, he said. "Such exports are often illegal," he said. "Waste is often exported as usable goods or false declarations of material type are made."

"The central problem is the boundary between waste and usable products."

Under half of automobiles sent for scrap in Germany were recycled into metal, he said. He estimated that 40% of German automobiles sent for scrap were sent abroad without notification as exports.

German industry was also worried about the increasing concentration of global commodities supplies in the hands of a small number of powerful companies, such as the iron ore joint venture formed in June by mining giants Rio Tinto and BHP Billiton. 

There was also concern about increasing Chinese purchases of shareholdings in nickel mines in Canada and South America.

Grillo called for greater political attention to European commodity supplies. Germany and the European Union should develop a unified commodities strategy involving more energetic action to tackle international trade distortions which disrupt commodity trade.

EU raw materials initiative

Last May, EU industry ministers supported plans to ensure industries get better access to raw materials, as competition for commodities such as rare metals becomes fiercer with globalisation.

A new strategy, to be fleshed out later this year, should aim to lower the consumption of primary natural resources by increasing resource efficiency and recycling, the ministers agreed.

The ministers invited the Commission to finalise a preliminary list of critical raw materials in view of a final agreement "before the end of 2009".

(EurActiv with Reuters.)