Raw materials between euphoria and ignorance - the need for raw material strategies

More than any other goods, raw materials underlie economic and societal challenges imposed by global and regional developments, such as individual growing demand of national markets, technological progress, customer behaviour and acceptance, speculation, change of attitudes and policies in securing raw material supply. The raw material hype of the first decade of the 21st century and the subsequent price drop led to euphoria and ignorance.

The need for action on “raw material security” varied strongly due to the very heterogeneous demand side of  EU member states’ economies . Effectively, raw material shortages have a rather different impact on the EU economy considering the unbalanced share of industrial production as well as structural differences of industry and market economies within EU. This makes for heightened pressure on the applicability and performance of European raw material strategy and innovation partnership (EIP RM) and necessitaties interaction with national and even regional strategies (including their lobbying) that reflect more specific requirements. 

Just comparing the main objectives of the German raw material strategy (2010) with those given by the Free State of Saxony´s raw materials strategy (2012) reveals differences and synergies. At a national level, removal of the barriers to international trade and distortion of competitive positions and support of transparency and good governance in mining industry is allied to a somewhat ambiguous commitment to the domestic mining industry. 

In contrast to this, the incorporation of raw materials as a future subject in the Free States Innovation Strategy has resulted in the reassessment of Saxon raw material deposits and data as a continuous project since 2008 and a growing share of national R&D programmes. Saxon raw material policy focusses on domestic primary raw materials and is committed to strengthening mining administration and raw material awareness. Today, Saxony holds pole position in raw materials entrepreneurship especially from a group of enterprises the EC targets most: SMEs. Despite the fact that their lobbyiing in the EU is rather limited they are an important key group in generating growth by especially encouraging entrepreneurs in mining. The “Mittelstand” has shown much resistance during the financial crisis.  

The Saxon Free State, rich in raw materials, now holds 18 exploration licenses with most of them linked to local industry and shareholders. Entrepreneurs, like Nickelhütte Aue GmbH or SolarWorld Solicium, actively consider backward integration or expanding the value chain through their own mining investments. SMEs are the focus group in linking and merging EU expertise in stimulating mining from EU resources, and Saxon industrial partners have much to offer here: The HORIZON 2020 project FAME (Flexible And Mobile Economic processing technologies) was initiated by a group of Saxon mining entrepreneurs supported by the Freiberg based Geokompetenzzentrum with the aim of achieving synergies and support from European networks. 

After successfully reopening fluorspar mines (in Germany and the UK) Portuguese, German, and UK tungsten-tin deposits are now closer to becoming competitive through enhancing their minerals processing technologies (www.fame-project.eu) . The participation of EU based industry in investments into international raw material markets (> 500 billion €/year) requires an intensive support from EU but also from national governments. Projects like FAME and regional activities at a comparatively small scale and almost entirely based on private entrepreneurship gain more and more importance in the performance of the EIP RM. This requires reliable conditions for the key players by policy makers and administration. Keeping this in mind, the structurally and operationally diverse European industry, with its regional divergence (in industrial history, economic development strategies, acceptance by the public) can truly support European regeneration. 

Relying on Europe´s own middle-class private sources, raw material strategies

• have to follow global developments and challenges and not theoretical issues and ideology;
• need to be specified and budgeted according to the requirements at regional, national, and EU level;
• require reliable measures in timing and budgeting and dedication of responsibilities to be bundled and to be of high priority;
• need to be steadily controlled regarding the realised tasks and measures and updated;
• need to be communicated at all levels.

Because of its fundamental importance  in demonstrating the the value of industry, its nature as location bound with a substantial long-term risk capital commitment, and its specific requirements in sustainability, raw materials investment cannot tolerate either euphoria nor ignorance.

Only if we adopt the challenges, independent of price developments, legislation periods in policy, and fears, without any ideological background and lobbyism, we will have the chance to maintain and to further develop the industrial value chain in Europe and to secure and to strengthen an internationally competitive raw materials industry.

Dr Wolfgang Reimer & Dr Manfred Goedecke
Geokompetenzzentrum Freiberg e.V., Germany

Picture subtitles:
More than tradition: the renaissance of European mining in the Saxon Erzgebirge follows a comprehensive cadastre work of the past mining activities. “Glück Auf” as a call for new public and private engagement.

New process technology for more efficiency in mining developed by SME entrepreneurs in mineral processing: a model of a bio-reactor shown on the FAME Kick-Off Meeting in Meißen, Saxony.