EU to step up raw materials ‘diplomacy’

The EU must shoulder its responsibilities as a political mediator on the global stage, writes Robert Malley, President of the International Crisis Group.

This article is part of our special report Raw Materials.

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.

Critical raw materials

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.

Settling WTO disputes, boosting foreign direct investment

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).

In November 2008, the European Commission presented a new 'integrated strategy' for raw materials, suggesting three pillars for the EU's policy response to global resource scarcity (EURACTIV 05/11/08):

The strategy was supported by EU industry ministers who called for EU "raw materials diplomacy" and a stronger focus on resource-efficiency and recycling (EURACTIV 04/06/09).

In November 2009, the European Commission set up an expert group which began screening a list of thirty-nine "potentially critical" raw materials whose availability to industry could come under threat as global competition for natural resources intensifies (EURACTIV 01/12/09).

  • Autumn 2010: Commission to publish Communication on implementation of EU Raw Materials Initiative and strategies to ensure access to raw materials.

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