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Posts Tagged ‘European Union’

EU clamps down on loss-making coalmines

July 21, 2010 Comments off

“Loss-making coal mines across Europe will have to close over the next four years after the European Commission clamped down on government aid to the sector on Wednesday.

The move will hit hardest in Germany’s Ruhr region, north-west Spain and parts of Romania, and could affect tens of thousands of jobs.

New European Union rules that come into force from January will only allow government operating aid to be provided to hard coal mines if closure plans are in place. Those plans will have to ensure the mines are shut down by October 15 2014 at the latest.”

Source: Financial Times, July 20, 2010

Observations:

  • Spain and Germany are the countries spending most on keeping uncompetitive coal mines in operation in order to provide employment and gain energy security.
  • German underground hard coal mines are notoriously inefficient. The mines typically mine coal layers less than 2 meters in height using longwall systems. Subsidies at 50% or more of production costs are not uncommon.
  • Subsidised coal mining mainly takes place in areas with high unemployment, forcing the governments to keep employment levels in the mining industry high.
  • Coal is not one of the raw materials mentioned in the European Union’s recent Raw Materials Initiative. The Initiative calls for action to strengthen the position of the European mining industry for a number of key minerals.

Implications:

  • The governments are working on ramping down the production in the subsidised coal mines, but this ramp down takes decades in order to manage unemployment rates in the mining area. The European plan to close the mines in 4 years time would cause enormous unemployment problems and supply problems for some clients. It is therefore very unlikely this plan will be executed in the current form.
  • Probably Germany will trade concessions in the closure plan of the coal mines with lowering of agricultural subsidies, from which mainly French farmers benefit.

©2010 | Wilfred Visser | thebusinessofmining.com

EU to step up raw materials diplomacy

June 18, 2010 Comments off

European Union Raw Materials Initiative“An EU expert group has identified 14 raw materials seen as “critical” for EU high-tech and eco-industries and suggested that the European Union’s global diplomacy should be geared up to ensure that companies gain easier access to them in future.

‘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 and we have to ensure that we have the necessary elements to do so,’ said Industry Commissioner Antonio Tajani, presenting the group’s final report on 17 June. …

To guarantee that industry can access these essential raw materials, ‘we need fair play on external markets,’ said Tajani. Encouraging supply from EU sources, improving resource efficiency and increasing efforts to recycle were also highlighted in the report as ways forward.”

Source: Euractiv, June 18 2010

European Union Report: Raw Materials Initiative

Observations:

  • The European Union has realized 30 million jobs in Europe directly depend on availability of mineral resources.
  • Antimony, beryllium, cobalt, fluorspar, gallium, germanium, graphite, indium, magnesium, niobium, PGMs (Platinum Group Metals), rare earths, tantalum and tungsten are deemed to be critical for the industry in Europe. Most of them are used especially in the high tech industry.
  • The report concludes that the EU should respond to the threat of lack of supply by ensuring access to raw materials from international markets under the same conditions as other industrial competitors; setting the right framework conditions within the EU in order to foster sustainable supply of raw materials from European sources; and boosting overall resource efficiency and promoting recycling to reduce the EU’s consumption of primary raw materials and decrease the relative import dependence.

Implications:

  • European deposits of the critical raw materials are low, so the fostering of sustainable supply will not affect many companies (although some minor producers in Eastern Europe might benefit).
  • The key result of the study will be that the European Union will support manufacturers in closing long term deals with major producers of critical materials. The EU will follow China, Russia and Japan in negotiating favourable contracts, most likely promising trade benefits or even infrastructure investments in return. The official term for these actions is “Joint Dialogue”.

©2010 – thebusinessofmining.com