Value Chains based on Mineral Raw Materials Challenges for European Policy and Industry

This project consisted in a report and related meeting supported by EUMICON, the European Mineral Resources Confederation.
The report provided background and served as a starting point for a series of stakeholder discussions on the future of the EU’s value chains based on mineral raw materials. It describes the transformation the industry is currently undergoing, and identifies both the challenges and the opportunities it faces.
The report concludes that mineral raw materials are increasingly becoming critical to our economies. They are crucial components of the EU’s industrial base, producing a broad range of goods and applications used in everyday life and modern technologies, including sensitive technologies applied for example to military purposes. In part, demand is driven by technological developments such as digitisation, smart materials or disruptive technologies. Mutually reinforcing technologies such as mobile technology, the Internet of Things and data analytics create new markets or transform existing ones. Increased connectivity of people and things through mobile devices has contributed to the proliferation of new services and sharing models. Disruptive technologies such as autonomous driving, 3D printing, drones and renewable energy are transforming industry sectors and value chains, which often are described as Industry 4.0. Demand is also driven by policies to reduce greenhouse emissions in the EU and globally, for example by materials and energy efficiency, renewable energy and increasing electrification. This in turn necessitates a massive construction of new infrastructure, requiring more materials such as copper, aluminium, steel, construction materials and many more. The growth in demand for mineral raw materials increasingly raises concerns over security – availability and cost – of mineral raw materials. This emerging debate on the ‘security’ of raw materials supply is echoing concerns we have dealt with for a long time in the energy domain and associated worries about the security of energy commodities, notably oil and natural gas. The difference with energy, however, is that raw materials cover a far more diverse set of materials and metals, which in addition, are used in diverse applications and many different economic sectors within Europe and elsewhere. We are also witnessing fast-changing value chains on the back of technological disruptions. Yet, this time round, governments seem to be taking a more assertive, and in some cases, preemptive stance. Witness, for example, China’s disputes on rare earth elements or President Trump’s Mineral Order at the end of 2017. This new attitude may pose new challenges for EU trade policy. The future will provide new opportunities for industry, economic growth and jobs and will create new value chains. For EU industry – as well as the economy at large – being able to reap these benefits will require profound adjustment and intensified attention on the part of EU policy-makers to address the challenges of the transformation.