We are at the beginning of a gigantic turning point in terms of raw materials. The age of hydrocarbons is slowly but surely drawing to a close. Even in the 21st century, large parts of the global economy will still be dependent on the “black gold” of the 20th century. But the course for the transition out of the fossil fuel era in the next few decades has already been set in all major industrial nations.
The fossil fuels are not replaced by one, but many different inorganic raw materials, without which our economic and energy systems would not function even now. These raw materials include copper, cobalt, nickel, lithium as well as the metals of the platinum group and rare earths.
These are required in ever larger quantities and in more complex compositions for smart devices, batteries, computers and electric cars. They form the foundation of our technological future. Without these raw materials, there would be no energy, climate and transport transition.
In Europe, the self-proclaimed pioneer continent for climate protection and clean future technologies, these raw materials have so far only been mined to a very small extent – or not at all. Instead, Europe uses the raw materials of the rest of the world – with a large part of the raw material imports coming from China, Central Africa, South America and the countries of the Indo-Pacific. All regions that we should keep an eye on on the new raw material map of the world.
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It is no longer the Middle East as the hub of world energy supply that should cause us concern, but the group of dominant producing countries and regions in which the critical or strategic economic raw materials are mined and processed. And in addition to the new raw material geography, there are new raw material companies whose names are hardly known to the general public.
The giants of the oil age were and are BP, Saudi Aramco and Gazprom. The new players are very well established, globally oriented and diversified mining groups such as BHP, Rio Tinto and Glencore, in clear competition with rapidly gaining influence from China and India, such as Zijin Mining or China Molybdenum. It is these companies that control the global commodity markets.
Companies from the EU are barely represented on the list of the 50 largest raw materials companies. The leading raw materials companies are based in Australia, the USA, Russia, China and Canada. There are two heavyweights from Europe with Glencore in Switzerland and Anglo American in Great Britain. But the countries in which both are based are not part of the EU.
The EU is not well positioned in the future market for raw materials
In short, the situation on the future global market for mineral and metallic raw materials does not look good for the EU: no large companies of its own, hardly any raw material extraction of its own, and a common European raw material policy that so far only exists on paper.
If you think of these and other problem strands – secure raw material supply, geopolitics, environmental protection in raw material extraction, social and human rights issues – together, it is in the nature of things that these cannot be dealt with individually and in small work steps, but only together. In spite of its economic size, Germany is too weak on all these issues to weigh enough. These are problems for the European level that require a consistent joint approach.
So far, however, it does not look like it. The previous picture of European raw materials policy is more like a patchwork of individual initiatives, network groups and wishful thinking. It is true that awareness of Europe’s strategic interdependencies has increased recently and a number of correct measures have been taken.
Since September 2020 we have a European Raw Materials Alliance and an EU Commission that wants to be more geopolitical than before. What is missing, however, is a contact point that bundles all these associations, initiatives and individual policies and – this is the most important thing – can also act accordingly. The belief that the various networks between business, politics, science and civil society are becoming more or less independent and developing into powerful players on the raw material markets is quite naive.
Key markets and supply chains need to be checked for risks
Only companies and states are able to act. The former because they want to make a profit, and the latter because they strategically support their economies in the competition for markets and raw materials. And so far there is a lack of such support in the EU.
If you have big plans, you should also think big when it comes to implementing them. And for raw material issues, you need an actor who can act in the long term and move in both worlds – business and politics. A strong EU agency for raw material issues would be the appropriate organizational answer. It could be the institutional foundation of a new European raw materials strategy.
With the help of such an agency, all key markets and supply chains that are of strategic importance for Europe’s economy should be consistently analyzed and checked for risks. The decisive ability of the raw materials agency should, however, be that it is in close contact with all raw material extraction and processing companies in the EU and, together with the EU Commission, decides which companies are particularly worthy of support.
The raw materials agency should also be active on the global market, but also focus on the domestic European potential for raw material supply. The view should not be limited to the raw materials. It is the respective supply chains of the various raw materials from the mine to the smelter and the subsequent processing into intermediate and end products that must be in the focus of a European raw materials agency.
Japan and South Korea can serve as role models
This is the only way to identify excessive dependencies and a lack of own technological competencies at an early stage, which in combination can lead to geoeconomic and geopolitical supply risks.
The strategic approach should always keep three key questions in mind: How do you succeed in reducing the EU’s dependence on certain critical raw materials? Are there any European companies or raw material projects that are eligible? Are there reliable partners outside the EU with whom raw material projects can be implemented together?
This includes not only questions of raw material extraction, but also of recycling, the circular economy, technology development and research. With an EU agency for raw materials one could build on historical predecessor projects such as the European Coal and Steel Community, the European Atomic Energy Community and the Energy Union.
Japan and South Korea show that such hybrid institutions can function to supply their own raw materials. The core of the whole thing should be to establish the EU as an effective raw material player in the 21st century. Because only those who are sovereign and capable of acting can assert themselves in the global power struggle for raw materials, markets and influence.
The authors: Jakob Kullik is a political scientist and research assistant at the Professorship for International Politics at the Technical University of Chemnitz. Jens Gutzmer is a geologist and founding director of the Helmholtz Institute Freiberg for Resource Technology.
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