Competitiveness

Europe is still rich in natural resources and the supply of minerals continues 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 just a few.

The use of raw materials underpins the economic performance of all EU Member States and most industrial sectors and products.

To a large extent, demand and use of the wide range of minerals produced in and/or imported into the EU is strongly influenced by the business cycles of downstream sectors.

The industry differs from many other forms of manufacturing in two aspects: firstly, the industrial installations have to be where the mineral deposits have been found, secondly, most minerals (except for aggregates) are traded as commodities internationally and therefore EU and Member States’ legal and economic framework conditions have a major impact on the sectors international competitiveness.

The non-energy mineral raw materials industry in Europe - that is excluding minerals used for fuels - 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 mineral raw materials sector is composed of around 250 enterprises, which include some of the major multinational mineral raw materials 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 mineral raw materials sector accounts for some percentage 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.