What is the role of EuroGeoSurveys (EGS) and how does its work contribute to the security of Europe’s supply of critical materials?

The role of EGS is to provide public Earth science knowledge to support the EU’s competitiveness, social well-being, environmental management, and international commitments. Through its Mineral Resources Expert Group, EGS has the capacity and capability to deliver the best available mineral expertise and information based on the knowledge base of its members’ geological surveys, for policy, industry, communication and education purposes at a European level. EGS aims to become the leading partner within a European mineral information network, or similar cooperative undertaking, which will provide innovative tools and expertise to support sustainable minerals supply for Europe. Mineral information provided by EGS is based on globally comparable standards of excellence for research and development, and there are processes for these standards to be maintained. Of course, to make this happen many of EGS mineral activities and tasks are carried out collaboratively with other organizations that have mineral information and expertise, and with consumers of that information and other potential stakeholders.

Within this context, the EGS and Geological Surveys of Europe are currently carrying out the EU-funded Minerals4EU project, which should create the main European information network structure on minerals (including critical ones) to provide tools and expertise to enhance resource efficiency and the security of minerals supply, and support sustainable minerals development for Europe. A Knowledge Base Platform is being developed to enable a dynamic value chain, delivering added-value intelligence and foresight information, and prompting the development of a permanent structure to achieve and facilitate sustainable services. The exact nature of the data concerning primary and secondary mineral and metal resources, on land and offshore, and supply and demand data, will be defined by the Minerals4EU project and the potential network partners, enabling the delivery of concrete products such as a web portal, the European Minerals Yearbook and a foresight study.

A four-year (2009–2013), EU co-funded project, ProMine has created and provided a well-documented knowledge base of Europe's non-energy raw material resource potential. The database demonstrates that Europe hosts a large number of mineral deposits ranging from precious metals (gold, silver, platinum group elements), base metals (aluminium, copper, lead, zinc, tin), iron and metals used to make steel (cobalt, chromium, manganese, nickel, vanadium, tungsten), high tech and rare metals (bismuth, germanium, gallium, mercury, lithium, rare earth elements, antimony, tantalum, titanium, zirconium), minerals for chemical use (e.g. barite and fluorite) to fertilizer minerals (e.g. phosphate), building materials and several other industrial rocks and minerals.

EURARE is a project funded by the European Commission for the 'Development of a sustainable exploitation scheme for Europe's Rare Earth ore deposits'. The rare earth elements (REE) are vital components of many modern technologies, including electric and conventional cars, computers and smartphones, renewable energy infrastructure, and phosphor lighting. The main goal of the EURARE project is to set the basis for the development of a European REE industry that will safeguard the uninterrupted supply of REE raw materials and products crucial for the industrial sectors of the EU economy, such as automotive, electronics, machinery and chemicals, in a sustainable, economically viable and environmentally friendly way. The Geological Surveys involved in the project discovered that Europe has currently no mine supply of REE, but it does have a number of areas of suitable geology with REE resources. These include alkaline igneous rocks such as those found in the Gardar Province of south west Greenland (Kvanefjeld and Kringlerne exploration projects) and within the Fennoscandian Shield (including the carbonatites of Fen in Norway and Sokli in Finland and the Norra Kärr syenite in Sweden). They also include secondary placer deposits such as those in Greece and Serbia. Based on information received from ongoing advanced exploration projects there is potential for more than 6 Bt of ore resources, more than 38 Mt TREO (total rare earth oxides) and more than 10 Mt HREO (heavy rare earth oxides).

The main message from the Geological Surveys’ point of view is that the problem is not the geology and metallogeny of Europe but the lack of critical raw materials-focussed exploration. Europe needs to apply more efficient exploration including dedicated ore genetic studies to better understand the critical minerals systems.

Where are these critical materials extracted and refined, where and how large are the main markets, and how tough is the competition for these resources?

China is the major supplier when these materials are considered, however many other countries are important suppliers of specific materials; for instance, Russia and South Africa for platinum group metals. By contrast, supply of critical raw materials is more limited, with less than 3% of critical raw material supply arising from within the EU. The major producers of the twenty-one EU critical raw materials are shown below (Fig 1), with China clearly being the most influential in terms of global supply.¹ Several other countries have dominant supplies of specific raw materials, such as the USA (beryllium) and Brazil (niobium). Supply of other materials, for example the platinum group metals (PGM), lithium and borates, is more diverse but is still concentrated.

As a matter of fact, total supply across all twenty critical raw materials can be estimated at under 3%, with over half having no or very limited production within the EU. The critical raw materials with the highest production in the EU are gallium (12%), magnesite (12%), silicon metal (8%) and germanium (6%). The demand for all the critical raw materials is predicted to grow, with niobium, gallium and heavy rare earth elements forecast to have the strongest rates of demand growth, exceeding 8% per year for the rest of the decade.

China is the major miner and refiner of critical raw materials (CRM). Most critical minerals and metals are extracted and refined there. In addition to making dynamic supply markets they are also competing with the USA, Japan and the EU when it comes to the productivity of downstream manufacturing industries. For example China controls one third of world REE reserves and, along with other Asian miners, 94% of global REE production. In 2010, 97% of REE mining and concentration, 97% of REE separation of ores into oxides and almost 100% of refining of REE oxides to metal took place in China. Furthermore, 75-80 % of REE magnet alloy powder production occurred in China, while the remainder took place in Japan. In terms of the final stage of magnet manufacturing 75-80% took place in China, 17-25% in Japan and only 3-5% took place in Europe.

China and other BRIC countries are also major consumers of CRM. Europe is not a significant consumer of REEs, though REEs are used in key European industries. European consumption has remained stable since 2011, averaging around 2 400 t REO (rare earth oxides). Overall the global CRM market is not managing to stabilize, with unforeseen changes in Chinese trade policy on one hand and the uncertain situation with resource exploitation in Greenland and elsewhere in Europe, on the other. 

What are the main materials relevant to the renewable energy sector for which supply bottlenecks might occur and what consequences might these bottlenecks have for the renewable energy technologies in question?

Improving environmental performance is something that is closely linked to raw materials, both at present and in the future. Exhaust emissions from internal combustion engines are managed through catalytic converters containing platinum group metals; for which no other option is viable at present. Low-carbon technologies also require that the correct resources are available. Many wind turbine designs use magnets containing rare earth elements, and solar panels rely on metals such as silicon, tellurium and indium amongst others. Similar cases are seen for electric vehicles and energy efficient lighting. Massive growth in the use of electric and hybrid vehicles will be accompanied by equally high levels of demand for the rare earth elements needed to manufacture their batteries and propulsion units.

There is a range of socio-economic factors involved here, such as concern about the environment, the cost of energy, social license to operate and conflict. In a changing world, these factors are likely to become increasingly significant. It seems that, to an increasing extent, extraction of mineral resources must compete with other interests. Documented spatial databases of reserves/deposit areas are therefore of importance for influencing future land use.

What steps can the EU take to guarantee supplies of these materials?

In addition to concerns about dependence on extra-EU supplies, the production of many materials is reliant on just a few countries. This concentration of supply is also cause for concern as countries dominate supply of individual or several materials: Brazil (niobium), USA (beryllium), South Africa (platinum) and China (rare earth elements, antimony, magnesium, and tungsten). In fact, twenty countries are the largest suppliers of critical raw materials, accounting for 90% of supply. All major suppliers of the individual critical raw materials fall within this group of twenty countries. At the same time, all are predicted to experience demand growth, with lithium, niobium, gallium and heavy rare earth element forecast to have the strongest rates of demand growth, exceeding 8% per year for the rest of the decade.

Analysis has highlighted the different stages on the supply chain where countries are placed and, consequently, the different approaches being taken. For example Japan is focusing heavily on substitution, China - on processing and metallurgy, South Korea - on recycling, Australia - on sustainable mining and Canada - on exploration. Funding for some of these programmes can often be vast, for example South Korea is investing $300m (EUR 244m - Dec. 2014) over 10 years into research into forty technologies covering refining, smelting, processing, recycling and substitution. Other strategies have also been adopted. Russia is also known to have an active programme for materials stockpiles and export restrictions, China has tightened the export quotas for rare earth elements, ostensibly to secure internal supply, and the US has long had a stockpile for strategic defence materials.

There is a need to focus on exploration and make it more effective. Resources need to be found before any extraction, processing and refining can be discussed. Discovery of new resources needs enhanced information on surface and subsurface geology, new concepts for natural resource potential, particularly in underexplored areas about which there is limited geological knowledge, and projects that span the geosciences and are truly multidisciplinary. The question “Where are undiscovered mineral resources likely to exist, and how much undiscovered mineral resource may be present?” needs to be answered. All of the processes involved in the formation of a deposit, a good understanding of why mineral deposits occur where they do, ore exploration models and resource assessment studies, are significant steps that need to be taken. Irrespective of the exploration level, a better understanding of the geology and delivery of high-quality maps may lead to new or little-known types of ore deposits and ore-forming systems. In addition, future exploration will likely need to focus increasingly on deeply buried deposits.

Europe’s mineral potential is under-explored, both with regard to the subsurface (particularly deeper than 150 meters) and the sea-bed in the EU Member States' exclusive economic zones. Major opportunities for access to raw materials exist within the EU today, especially for mining at greater depths or in small deposits. The ocean bed could also contain valuable raw materials, such as copper, zinc, gold, silver and rare earth metals, leading to growing world-wide competition for marine mineral deposits. A framework of stable economic and technological conditions makes sustainable and resource efficient exploitation possible in Europe.

There is a challenge to better understand ore genesis and direct exploration at deeper, unexploited levels of the bedrock. This may be possible by developing and applying innovative exploration technologies (3D/4D) to locate deep-seated deposits, and to define the critical raw materials reserves (including secondary resources) of the EU.

As emerging economies develop their renewable energy industries and other high-tech sectors, the pattern of demand for materials is likely to change. What are the likely consequences of this for the European Union?

Non-energy minerals underpin our modern economy. They are essential for manufacturing and renewable ‘green’ energy supply. Despite the recent financial downturn across the globe, demand for raw materials, such as non-energy minerals, is set to increase as attempts are made to boost economies and push the growth of manufactured goods. The supply of minerals will, therefore, be necessary into the future. Most of the environmental technologies and applications (e.g. wind turbines, photovoltaic cells, electric and hybrid vehicles) allowing energy production from renewable resources will use so-called high-tech metals (e.g. REE, PGM, niobium, lithium, cobalt, indium, vanadium, tellurium, selenium) that are derived or refined from minerals for which Europe is strongly import-dependent. We need to calculate the volumes of critical and potentially strategic metals (e.g. cobalt, niobium, vanadium, antimony, platinum group elements and REE) and minerals that are currently not extracted in Europe in order to understand how high-tech elements are mobilised, where they occur and why some are associated with specific major industrial metals.

The UN forecasts that the global population will be 10.9 billion by 2050, an increase of 50% on current levels. Looking ahead to 2050, China will have more than 200 cities with more than 1 million inhabitants. Population growth and economic development will continue to drive mineral resource use on an upward trajectory. Global production of platinum group elements has increased by 113% between 1980 and 2008.

The high import-dependence of strategic and critical minerals has serious implications for the sustainability of EU manufacturing. This problem can only be resolved by more intense and advanced exploration for new mineral deposits on land and offshore. Incidentally, mineral resources on the seafloor are the focus of growing European interest with respect also to the exploration potential of rare earth elements, cobalt, selenium, tellurium and other high-tech metals.

Substitution and recycling are two approaches to dealing with potential supply constraints. Is enough being done at a policy level to support research into substitute materials and to promote recycling of critical materials?

A coherent resource-efficient product policy framework contributes to the sustainable supply of raw materials, through resource efficiency and recycling, to reduce the EU’s dependency on imports of many of mineral resources, including critical metals. To recycle and re-use waste materials and by-products from all mineral value chain activities, in order to increase the supply of valuable secondary resources, is an ongoing goal. Many critical minerals and metals may be collected through recycling of mining related waste materials. However, even with the important contribution from recycling, to secure resource efficient supply it will still be necessary to extract primary mineral deposits, focusing on the application of new technologies for deep exploration and mining, turning low- grade ores to exploitable resources and reducing the generation of mining wastes and large tailings by converting them to exploitable resources, thereby resolving environmental footprint issues. The major bottleneck in recycling is regulations and politics. In any case, as mentioned, recycling will increase in importance but is not a stand-alone solution for the EU.

When it comes to substitution, priority shall be given to critical raw materials. Finding substitutes should be linked to the risk associated with their production as well as the substitutes themselves. Attention should also be placed on by-products. On the other hand substitutes may also contribute to the development of nano-products.

A leading producer of rare earth metals - China - has introduced export restrictions on some raw materials, increasing the price of these materials for EU industry. Are international trade rules sufficient to address this issue, or are there other measures that the EU can take to create a level playing field?

Some information about the global and European situation on REE mineral resources has already been delivered in the previous answers. There is currently exploration potential and high prospective interest in primary deposits in Greenland and the Nordic countries, and secondary deposits in mainly NW France, Greece and the west Balkans.

However my personal opinion is that optimism and realism rarely go hand in hand, and this is clearly the case with REE in Europe. By now, it is well known that political reforms, economic re-orientation and high industrial growth rates in China have led to a tremendous upward spiral in mineral consumption, in this case accompanied by a shift of emphasis to high-tech and base metals, and industrial minerals for steel manufacturing and building. In short, China alone is changing global mineral production and demand figures. The country’s national or, to be more correct, government mineral policy has become the only exploitation strategy implemented by all state-owned mining companies. The country’s growing needs for mineral resources were to be met at all costs, with environmental issues taking a back seat. However, the country was not self-sufficient in essential mineral raw materials and that resulted in the increased interest of Chinese miners in international resources and markets. For example, China currently controls the up- and downstream REE supply chain industry. It is the only functioning economy in the world with respect to REE exploration, mining, processing, refining and metal production. Nevertheless, there is currently a strong Chinese interest in global investments as they need additional sources of REE.

Following these developments, the EU had to address these new challenges and ensure that the appropriate technologies, processes and products were in place, along with adequate policies to implement and stimulate the required changes. Europe is not self-sufficient in the extraction of essential mineral raw materials with industrial REE supply almost 95% import-dependant on average. However there is serious concern about whether things are going in the right direction to strengthen Europe’s position in the REE supply chain. At a first glance, the options and expectations look neither optimistic nor realistic. The EU has delivered initiatives, strategies, and criticality reports on mineral raw materials, has mobilized almost all its experts and put a lot of resources into its efforts. But to date there have only been a few advanced exploration projects in Europe and Greenland, with unclear schedules for mining, extraction, processing and metallurgy, although REE mineral resources from European sources (e.g. the EURARE project, the ERECON network) seem to be there. In contrast to China, the development of REE exploitation in Europe is progressing slowly, with the absolute need for consensus among the Member States not being the only problem.

Most of the European REE projects are currently in the hands of junior prospecting or mining companies that are probably unable to proceed downstream in the supply chain through all the stages of the exploitation process. They naturally do things based on their own corporate strategy and not based on the citations and recommendations of any EU strategy. As a result, should they manage to proceed with mining it is uncertain whether they will reach metallurgy production or be satisfied by producing ore concentrates only.

It seems to be the case that Greenland, although they have had several dialogues with the EU, would really like to see things move faster and this might bring them to even closer and more concrete agreements with the Chinese. For the EU industrial economy it is important to have metallurgy in Europe. This is where the technology and the added value are. Of course for China, with the entire exploitation and supply chain in place, the country could become more interested in continuing to be the main controller and key actor by simply importing REE mineral raw materials and processed ores from other parts of the world, including Europe and Greenland. Is there any way for the EU to stop or even control this trend in a more efficient and determined way? Nobody can provide a concrete answer today. Europe needs to ensure that things are implemented and operated more quickly and to advance the entire supply value chain. REE and other critical raw materials should also be considered strategic, as this would make governments more interested and active and ensure a focus on more operational involvement in the exploitation and production process.

¹ http://europa.eu/rapid/press-release_MEMO-14-377_en.htm