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EC Proposes New Strategy to Address Raw Material Needs

The following is a statement made by the European Commission addressing the needs by the the EC to boost its use of recycled materials as a raw material.

Raw materials are an essential part of both high tech products and every-day consumer products. European industry needs fair access to raw materials both from within and outside the EU. For certain high tech metals, the EU has a high import dependency and access to these raw materials is getting increasingly difficult. Many resource-rich countries are applying protectionist measures that stop or slow down the export of raw materials to Europe in order to help their downstream industries. Many European producers suffer from such practices. On top of this, some emerging countries are becoming very active in resource-rich countries, particularly in Africa, with the aim of securing a privileged access to raw materials. If Europe does not act now, European industry is put at a competitive disadvantage. In response to this challenge, the European Commission launched today a new integrated strategy which sets out targeted measures to secure and improve the access to raw materials for EU industry.

Vice-President Verheugen, Commissioner for Enterprise and Industry, said: "We must act, to ensure that access to raw materials for enterprises will not be hampered. We need fair play on external markets, a good framework to foster sustainable raw materials supply from EU sources as well as improved resource efficiency and more use of recycling. 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. I have agreed with my colleagues, notably Cathy Ashton, Benita Ferrero-Waldner, Louis Michel and Stavros Dimas, to closely cooperate to implement the proposed strategy.''.

Raw materials are essential for many products manufactured in Europe. In the making of a mobile phone for instance, 40 different raw materials are used, like lithium, tantalum, cobalt and antimony, all of them more and more difficult to get. A computer or television screen contains the same metals. A computer actually consists of about 60 raw materials, some of which are not to be found in Europe. As well because of rising demand from for instance China and India, these materials have gone up in price.

Despite recent price falls, raw material prices are still very high from a historical perspective. This provides a window of opportunity for new raw material projects within the EU. However, the current EU framework conditions are making it difficult to seize these new possibilities.

Recycling presents a huge opportunity to reduce import dependency for raw materials. However, many end-of-life products are illegally shipped outside the EU and are hence not recycled within in the EU.

The Commission recommends that the EU will define critical raw materials. And to give itself an integrated strategy, based on 3 major pillars:

• Access to raw materials on world markets at undistorted conditions
• The right framework to foster sustainable supply of raw materials from EU sources
• Increase resource efficiency and promoting recycling in the EU

Some facts and figures about non-energy raw materials

Critical raw materials, in particular the high tech metals, are increasingly used for the development of technologically sophisticated products. For example, in the 1980s computer chips were made on the basis of 12 minerals, whereas nowadays more than 60 different minerals may be used.

There are over 450 export restrictions on more than 400 different raw materials (e.g. metals, wood, chemicals, hides and skins) including secondary raw materials (e.g. metal scrap). One example of such trade distorting restrictions is Russia's export duties on wood materials, which already disturbed established production lines and affected thousands of jobs in wood related EC industries. Even bigger damages are to be expected should new planned hikes of export duties be implemented by the Russian Government next year.

For many essential raw materials extraction is concentrated in a limited number of countries. China produces 95 percent of all rare earth concentrates (needed for hand-held consumer electronics, LCD’s, high performance magnets), Brazil 90 percent of all niobium (needed for steel alloys in gas pipelines, super alloys in high performance jet aircrafts) and South Africa produces 79 percent of all rhodium (needed for car catalysts).

Important raw materials sources are increasingly located in parts of the world which lack political and economic stability. Over 50 percent of major reserves are located in countries with a per capita gross national income $10 per day or less.

EU industries rely heavily on secondary raw materials. As examples, recycled aggregates may substitute 10-20 percent of primary aggregates, while the use of recycled scrap has increased significantly in recent decades and now represents 40 percent to 60 percent of input to EU metal production.

The advantage of recycling is that it contributes to energy efficiency, particularly in the case of metals where production on the basis of secondary raw materials (scrap) is up to significantly more energy efficient compared to primary raw material. As an example, secondary smelting of aluminum using scrap consumes only 5 percent of the electricity used compared to primary smelting.