Most mining industry observers would have noticed Finland achieving top global rank as mining investment destination in the 2014 mining survey by the Fraser Institute. However, overall the EU is not seen as a major mining region. This is true for the production of metallic minerals with production limited to only 3% of global supply while the EU consumes 25% – 30% of global production. On the other side it is self-sustaining in the aggregates and cement industry and ranks among the top three producers for many industrial minerals.
European Raw Materials Policies
The strong dependence on metal imports and resulting supply risks for key industries have led to a renewed political focus on raw materials in Europe. The European Union launched the Raw Materials Initiative in 2008. In 2011 European Commission adopted a new strategy document which sets out targeted measures to secure and improve access to raw materials for the EU. This new strategy consists of a 3 pillar-based approach to improving access to Raw Materials for Europe. These pillars are:
- Fair and sustainable supply of raw materials from international markets
- Fostering sustainable supply within the EU
- Boosting resource efficiency and promote recycling
The Strategic Implementation Plan (SIP) of the European Innovation Partnership on Raw Materials is structured into 3 domains; technology development, non-technology issues and international cooperation. The European Technology Platform on Sustainable Mineral Resources (ETP SMR) is providing a coordination function for the raw materials related research activities. Two of the priority areas have specific mining relevance.
Priority Areas of the SIP
The priority area Technologies for primary and secondary raw materials production addresses the mining value chain from exploration to processing and refining. Aims are to deliver pre-competitive geo-data for Europe and cost competitive technology to facilitate the exploration and exploitation of deeper and more complex deposits and ore types.
The priority area Improving Europe’s raw materials framework conditions addresses mining policies, land use planning policies and public awareness. Aims are to improve mining regulation and permitting procedures, introducing the concept of “mineral deposits of public importance” and supporting the building of stakeholder trust towards the raw materials industry.
Progress on the implementation of the SIP has been achieved with a number of commitments and projects such as ProMine, I2Mine, EuroGeoSource, Mineral4EU. An example of results is given in Figure 1. Public awareness initiatives such as the European Minerals Day have been conducted with the aim to educate the public about the European Minerals Industry and its relevance to stakeholders. Funding for initiatives is mainly provided through Horizon 2020, see for example this recent call that targets RTI actions in the priority areas. Further funding comes directly from member states, for example, the creation of Germany’s exploration funding programme.
Will these policies lead to success?
One of the objectives of the EU strategy outlined above is the attraction of investment to foster the domestic mining industry. Increasing EU competitiveness in a global industry and global markets is challenging on the background of generally dense population and 30 years of low investment in exploration.
Technology developments as encouraged through EU funding can improve the attractiveness of potential future deep mining operations in Europe compared to easier and cheaper shallow mines worldwide. However it is hard to imagine any commercialized technology would be only available in Europe; therefore potential future Europe-based mines would still have to compete globally. Benefits of such developments can be captured via sales of technology and services, which could further boost this already strong area of Europe’s involvement in the mining sector. Conversely Europe is not alone in advancing exploration and mining technologies with key government (co-)funded programmes, for example, in Canada and in Australia (DET CRC, CRCMining), and European companies will have to compete with any offerings evolving out of these international efforts.
Provision of geo-data
The provision of pre-competitive geo-data has good prospects to attract investment if minerals potential can be demonstrated; the annual global survey of mining companies by the Fraser Institute states that investment decisions are driven by this factor by 60%. Current views of minerals prospectivity in Europe are relatively low. The Fraser Institute survey gives Europe (excluding Russia and Greenland) an average ranking of 31% which is the lowest rank among the regions in the survey. Only 3 of the 14 jurisdictions (Finland, Ireland and Sweden) rank above the global median for minerals prospectivity.
Given the long history of mining in many European mineral belts and the lack of modern exploration of these belts the hidden potential could be very large. So far however only the top ranking countries have been improving over the last 5 years, see Figure 2. This might be a function of ongoing exploration (the more you look the more you find) but a consistent effect of EU initiatives cannot be detected at this early stage of implementation.
Raw material framework conditions
The raw material framework conditions are an area of that can be directly controlled or at least influenced by the EU and member states. The Fraser Institute survey gives 40% weight to these policy factors for exploration and mining investment decisions. Importantly these conditions are a key enabler for the advancement of modern exploration, see above. Some observations in the survey are;
- Overall EU strength regarding available skills, infrastructure, geological database, security and trade policies, especially in western and northern EU countries.
- Broad concern about uncertainty of environmental regulation and protected areas and issues due to regulatory duplication and inconsistencies.
- Excellent policy rating of Finland, Ireland, Norway, Portugal and Sweden
- Below median ranking for Bulgaria, Greece, and Romania
These perceptions are overall in line with the EU analysis and the plans to address mining and land use planning policies has good chances of improving the investment climate for exploration and mining ventures. The successful efforts of Ireland in improving it's regulatory regime over the past 5 years (Figure 3) should be applauded in this context. It can serve as a role model for lagging countries in this domain. Good progress is also being made with regard to guidance on dealing with Natura 2000 requirements, which concerns almost 18% of the EU’s land area.
There are good arguments to believe the EU hosts significant undiscovered mineral deposits and the generation of pre-competitive geo-data by EU initiatives will support uncovering this potential, which is the foundation for any mining venture and the future growth of the industry in Europe. Success in this area will be strong leverage in both attracting business and creating a more inviting regulatory regime for the industry as well as acceptance by stakeholders.
Investment in technologies with focus on the challenges anticipated for mining in Europe can provide a more level playing field by making deeper deposits more attractive for investment; also exporting this technology can boost the EU's equipment manufacturing and services sectors.
Improving framework conditions is a crucial component of these policies as they facilitate and enable industry growth. Community engagement will have to remain a strong focus here to overcome likely NIMBY (Not In My Back Yard) opposition in more densely populated areas.
It will be exciting to follow the impact of the renewed political focus on the raw materials sector in Europe!
Would you consider exploration or mining ventures in Europe? What would encourage you or hold you back? What have been good or bad experiences you have had in the sector in Europe?
Please share your views and experiences so we can all learn from them!