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Competitiveness
Europe is rich in natural resources and the extraction and supply of minerals continue to play a crucial role in the European economy and society as it has done for thousands of years. Minerals are used in every-day life, as construction materials (crushed rock, sand and gravel) for infrastructure, buildings, and roads, and for industrial purposes (e.g. metals, lime, kaolin, silica sand, talc) in the production of steel, cars, computers, medicines, human and animal foodstuffs, and fertilisers to name a few. To a large extent, demand for the wide range of minerals produced in the EU is strongly influenced by the business cycle of downstream sectors, such as the construction and steel-making sectors. In this respect, the industry differs from many other forms of manufacturing.
The non-energy extractive industry in Europe, that is excluding minerals used for fuel is usually divided into three sectors: metallic minerals, industrial minerals and construction materials.
The three sectors are characterised by their exceptional diversity.
The EU metal mining sector is composed of around 250 enterprises, which include some of the major multinational mining companies, which have their headquarters located in Europe. European companies compete in a global market and the majority of metallic ores are imported to supply the demand of the European economy. The EU metal mining sector accounts for some percent of the EU’s raw material needs, located in many but not all of the EU-27 countries, particularly in some of the more Northern countries, such as Sweden and Finland, the Southern countries of Greece, Spain, and Portugal and the new Member States like Poland, Romania and Bulgaria. New mines continue to be developed and provide employment and economic growth in regions which would otherwise have difficulty in attracting investment. Since metals, their ores and concentrates, are traded on international markets, European metal mines face strong competition from large-scale, high-grade overseas operations capable of producing metal ores and concentrates under low-cost competitive conditions. The EU sector has made substantial efforts to reduce operation cost levels through rationalization, innovations, and increasing capital intensity.
The industrial minerals sector provides a wide range of minerals which can be loosely classified as either ‘physical’ minerals, that is, minerals valued for their physical properties, for example, calcium carbonates, diatomite, kaolin, plastic clays, bentonite, feldspar, silica, and talc or; ‘chemical’ minerals, that is minerals valued for their chemical properties, for example, borates, salt, potash and sulphur. Extraction is undertaken in all of the current EU Member States, although some countries have more significant production than others. There is a highly developed international trade for some industrial minerals. This sector in the EU is mainly composed of small and medium-sized enterprises. However, it also includes some of the world's leading international production companies, operating on a global basis such as in talc. Processing of the minerals before sale can be relatively simple (mainly crushing, grinding and classifying) but may also be more sophisticated for some mineral types (e.g. mineral sorting by flotation, laser optics, magnetic separation, or calcination).
The construction minerals sector is by far the largest in terms of tonnage and sales revenue. It consists predominantly of small and medium sized enterprises with over 20,000 sites supplying local and regional markets with materials such as sand and gravel and crushed rock (aggregates) for construction, railway ballast and armourstone for flood and coastal defence. It also provides the raw material used in the manufacture of other vital construction products such as ready-mixed concrete, asphalt, lime and cement. There are also a number of multinational quarrying companies, which supply more distant markets. Substantial amounts of sand and gravel are also extracted from the seabed. In general, the widespread distribution of sand and gravel, and hard rock resources, and the relatively low price of the product, means that transport costs significantly influence the marketability of these products. EU production in this sector meets over 20% of global demand.
Overall the minerals trade balance is negative, showing a strong dependence of the EU on imports for its raw material supply.
Key role of exploration
The ability of Europe's extractive industry to continue to supply existing markets and to contribute to global economic growth will depend on additional resources becoming available. The EU has many raw material deposits. However, in the past decade their exploration and extraction have faced increasing competition for different land uses and a highly regulated environment, as well as technological limitations in access to mineral deposits. It is a myth that Europe is mined out and no more metals and minerals can be found. For the time being only the near surface geology of Europe and the related mineral deposits is well known – subsurface deposits are not fully explored.
The European Commission believes that an improved EU supply of many minerals lies in better access and permit extensions for existing deposits and in the development of deep-seated concealed deposits. At this moment the focus in the EU is directed at creating a vibrant exploration sector to provide new resources to the mining sector and to invest in new exploration with modern technologies.
Improved access to mineral resources and better investment conditions
Once the exploration will have found new deposits and potential for extensions of existing operations it will be important to improve the current investment climate for the extractive sector in Europe. Hence a European Commission working group is looking at the legal framework across EU Member States, at permitting conditions and other administrative burdens, as well as measures to stimulate investments.
Access to non-European raw materials
Of course, the access to raw materials from other parts of the world is seen as equally important and here in particular the EU wishes to ensure that the environment, health and safety aspects of the extraction and processing of the raw materials will be assured.
Hence the debate is not just about easy, cheap access, but about the wish for competitively priced raw materials balanced by the EU’s wish to provide a leadership role in sustainability issues, also in the raw materials sector.
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