Parliament group to dig up raw material issues

Raw materials Reuters.JPG

This article is part of our special report Raw Materials.

A special group was set up in the European Parliament last month to collect first-hand information on the issues affecting the availability and price of raw materials. Group chair and German MEP Karl-Heinz Florenz told EURACTIV about his objectives.

Climate change has tended to dominate the global environmental debate for some time now, said European People's Party (EPP) MEP Florenz.

But he believes that climate change is just the tip of the iceberg, underneath which lies a much bigger problem – raw materials.

Whereas the CO2 problem can be solved within 10 to 30 years, "there might not be enough raw materials to build the very highly developed technologies we need to combat climate change, such as electric cars," he warned.

The MEP welcomed the European Commission's raw materials initiative but described February's strategy paper as very disappointing, particularly given that its scope was broadened to cover other commodities, such as agriculture. "I think that it is the wrong strategy, because agriculture is too important to be mixed together with iron ore, for example," he said.

Florenz also questions the lack of prioritisation between the Commission's proposals. The strategy addresses access to international markets, domestic mining and recycling, but does not establish a clear hierarchy between them, he complains.

"All three are important, but I think that recycling policy is the most important," said Florenz, who also lamented that the plan published last month did not include any new initiatives and merely repeated what the EU executive had already said back in 2008.

MEP group to rework definition of 'criticality' of materials

The lawmaker plans to help the Commission to clarify its strategy by communicating the input of a cross-party group of MEPs on raw materials over which he presides.

The group was established on 15 February to work together with a special European raw materials "club" of companies and industry members. The club is to be set up shortly.

Asked to outline the group's priorities, Florenz cited rare earths, foreign affairs and trade, as well as recycling. Regarding cooperation with industry, the group will seek expertise from companies on the ground and will consider what exactly is currently going on in Africa, India or China. Exchanges with the WTO, the OECD and the US administration are on the group's agenda.

In its work, the group will exclude agriculture, refineries and the oil business in general. But it will include companies that use oil to make cosmetics or chemicals, Florenz said.

Agreeing on a definition of what are critical and non-critical raw materials also features among the group's priorities. One option is to see whether criticality could also be defined as the amount of materials needed and not just their relative scarcity. The US, for example, defines materials as critical according to whether reserves are still available, whereas the European Commission is placing more emphasis on whether global production is concentrated in a handful of countries.

The group is not aiming to become "a second debate club," but will rather seek to find out where the problems are and identify tools that can be used to solve them, said Florenz. He also promised that the group would react quickly to information received and seek direct action from international organisations and the EU institutions, instead of pursuing the lengthy process of getting a resolution adopted by Parliament.

Chinese rare earth exports and practices in Africa

Asked about China's export restrictions on rare earths, the lawmaker said he was not opposed to joint action with the US at the WTO. "The Chinese must realise that we cannot accept everything," he said.

Last October, German high-tech companies reported their first supply shortages of rare earths following a rapid diminution in Chinese export quotas.

Florenz stressed that if China continues to restrict exports of rare earths and ceramics, European companies will not only experience supply problems for all kinds of electronic goods, but the consequences will also be felt in other industries like steel-making, as the sector needs ceramics to keep its iron ore furnaces burning.

According to the lawmaker, the United States and Europe need to take the lead together on raw materials to influence worldwide definitions, standards and regulations, perhaps by teaming up with other countries in South America and technology leaders such as Japan.

Florenz also drew attention to Chinese practices in Africa. The Chinese come with a suitcase of money and use cash to buy iron ore and copper mines, which they then close to push material prices higher, he complained. Even all Europe's steel companies together could not buy mines with cash because they don't possess the necessary cash flow, he noted.

To understand why, it is useful to bear in mind that Chinese operations are government-led, whereas EU businesses are private companies, he said.

The European Parliament's raw materials group will investigate what exactly is going on regarding the purchase of mines and analyse what influence this phenomenon has on international markets and prices, Florenz noted.

To establish a link between development policy and raw materials policies – which is one of the focuses of the Commission's strategy for ensuring access to materials – the lawmaker believes that a fairer price for materials must be paid to mining companies in Africa so that workers also get fair salaries and their working conditions improve.

"We have to help them to develop their countries and for this, the price paid for raw materials needs to be increased," he said.

Domestic mining and environmental concerns

Regarding domestic virgin material mining in the EU, the MEP warns that "some tough debates" lie ahead, as environmental organisations are unhappy with the idea of opening mines, in particular within the Natura 2000 network of protected sites.

"We have some mines in Germany that were running well and then closed because the companies went bankrupt, and reopening was not allowed later because of the Habitats Directive," he noted.

The European Environmental Bureau (EEB), a green NGO, says Natura 2000 sites represent an obvious "reserve" of raw materials in the EU and is concerned that mining activity in these areas will be restarted, even for non-critical materials.

"Critical materials are defined as materials not available or easily available in Europe. So, we are clearly talking about materials which are not found in Europe. I don't see how our mining activity could help us on that," argued the EEB's Stéphane Arditi.

For him, the focus should rather lie in recycling and reusing materials from their end-point of consumption, which is usually in cities. "It is clear that urban mining and recycling can maybe make a difference here," he said.

Arditi pointed out that mining activity already taking place in Natura 2000 sites mainly relates to digging out aggregates for the construction sector. However, these are not identified as strategic for the industry. In addition, construction and demolition waste recycling is clearly not optimal yet in Europe, he underlined, leaving plenty of scope for improvement.

Late last year, the Commission tabled guidelines on how to reconcile environmental protection in Natura 2000 areas and the development of extractive activities. Indeed, the guidelines do not automatically rule out non-energy extraction activities in or around these protected sites.

To read the interview with Florenz in full, please click here

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