SNL Metals & Mining, an offering of S&P Global Market Intelligence, is the lead partner for Strategic Dialogue on Sustainable Raw Materials for Europe (STRADE), a European Union funded research project, building on dialogue-based, innovative recommendations for a European future raw materials supply strategy. Our first policy brief reviews previous endeavors by the EU in the field of raw materials engagement and diplomacy with third countries, organized into three categories: contingency support, capacity development, and support for free and fair access to markets.
"EU referendum fatigue" seems to be a malaise affecting most of my friends, family and colleagues this week in the U.K. I'm sure none of us would agree with the Vote Leave spokesperson who recently said, "The only fatigue [so far] is the press officers and research staff who haven't had enough sleep." Whichever way we're planning to vote, we can all agree on three things: we've all read enough and heard enough, and can't wait for the whole thing to be over so we can talk about, read about and hear about something else.
However, what I've noticed about the "remain" camp is that, while the economics of the "remain" view are compelling and definitely make for dramatic headlines, no one seems to want to talk about what the EU actually does.I have spent the past two months analyzing what the EU does actually do… albeit it in the field of raw materials. And I can tell you, very diplomatically of course, that it is an awful lot, and at the same time, not enough. SNL Metals & Mining is currently the lead partner on an EU-funded research project, Strategic Dialogue on Sustainable Raw Materials for Europe (STRADE). The project aims to offer recommendations for a new raw material supply strategy for Europe, looking at ways the EU can secure the inflow of raw materials and attract investment to its own mining sector.
It's good to start at the beginning, so that's what SNL has been doing for the past two months, tracing every EU intervention or engagement in the field of raw materials since 1976 (when the Lomé Agreement came into force). We have been able to trace the change in approach taken by the EU over the past 35 years.
Starting out when it was still the EEC (European Economic Community) and "Brexit" was just a twinkle in Boris Johnson's eye, the EU focused on providing contingency support for developing countries whose mineral sectors were experiencing crises beyond their control (usually either a serious drop in global commodity prices or a natural disaster affecting the country's ability to export raw materials).
The project was called SYSMIN, and €3.71 billion was disbursed under it between 1986 and 2010. The funds were used to save ailing (but economically viable) mines in the developing world, whose loss in export revenues would adversely affect national development. A good idea on paper undeniably, but the fact that funds sometimes took six years to reach the partner country meant there was still lot for the EU to learn.Next, the EU looked to build the capacity of resource-rich developing countries to better promote and manage their mineral sectors. This often included targeted support for the training of geological staff and undertaking geological surveys. S&P found that results from such engagements were often more tangible than those from compensatory finance projects, and included a marked increase in the purchase of geological survey datasets or an increase in exploration license applications. The EU was definitely getting warmer.
However, the EU eventually asked the very valid question: was this approach increasing the EU's access to raw materials on the global market? The answer wasn't clear, and so the EU has spent the past ten years focusing on creating an enabling environment for its industry to access the raw materials it needs. The EU's Directorate General for Growth has secured Free Trade Agreements with a host of resource-rich countries. It has also opened dialogue with potentially difficult raw materials-producing countries, such as Russia and China, and has begun talks with resource-rich but under-explored countries such as Greenland.
There is a long way to go, and the STRADE team's task over the next three years will be to plan the EU's best course of action. But the union is finally on the right track; it realizes that supporting free and fair access to markets is the only way to allow businesses and industry to thrive. And indeed, contrary to popular belief, the EU is actually doing quite a lot to support it.
I, for one, am looking forward to talking about the EU for the next three years — about the EU mining industry, I hasten to add, not the referendum!