* Countries offer large labour pools, good ore prospects,
* EU policy initiatives encourage raw materials independence
* EU initiatives to revive steel, aluminium industries
By Susan Thomas
LONDON, July 4 A gradual shift in European
attitudes and policy toward mining in the past four years,
spurred by the need to create jobs and to ensure supply of
critical materials, has led to investment and a nascent revival
of the industry.
New or resurrected mining and smelting projects in some
areas of Europe are providing some prospects for growth in the
region as countries struggle with recession and crippling
A handful of countries, including hard-hit Spain and
Portugal, are attracting investment with good grades of ore, a
large labour pool, revamped mining regulations and low political
"Spain has gone from being shy of mining to being welcoming
of mining. The political landscape has turned 180 degrees," said
EMED Mining Chief Executive Harry Anagnostaras-Adams,
whose London-listed company plans to reopen a former Rio Tinto
copper mine near Seville.
"There has been a marked transformation between when we
arrived six years ago, when mining was not conventionally
regarded as a favourite industry, to today when it overshadows
most other initiatives in the area."
Redevelopment of the mine, which is likely to begin next
year and last 12 months, will directly employ 1,000 people on
the site in a region where around 50 percent of the population
At EU level, new broad policy initiatives on raw materials
have been adopted to boost employment and make the bloc less
dependent on imports of vital raw materials.
The EU is the world's largest or second-largest producer of
some industrial minerals, including feldspar - used in glass and
ceramics - and construction mineral gypsum.
It remains an importer of most others including copper, zinc
and tin. Its domestic production of metallic minerals is limited
to about 3 percent of world output.
Leading emerging market producers of minerals in Africa and
Asia, meanwhile, are increasingly adopting strategies designed
to protect their resources for future development and for
"Growing resource nationalism in many parts of world makes
Europe more attractive from a political risk point of view," Raw
Materials Group analyst Magnus Ericsson said.
"There's also a slow but steady process of re-formulating EU
policy and making it more positive towards mining in Europe to
secure supply of metals. There are a number of exploration and
investment projects that might come on stream in the next four
to five years."
More work needs to be done to simplify and streamline
bureaucracy and policy in the European Union and its member
countries, however, to bring on a full mining revival,
"The EU is trying to stimulate mining and reduce the
dependency of imported raw materials ... but at the same time
some of the EU regulators make it much more difficult to operate
in Europe," Lundin Mining Chief Executive Paul
He cited environmental policies, a potential ban on using
certain chemicals common in mining, and restrictions on
transport of certain materials as difficulties.
"When a (full) mining revival comes, we would say that
attractive fiscal regimes, low risk and stable jurisdictions
will be a driving force," he said.
NEW POLICIES, NEW INVESTMENTS
Among the changes so far, Portugal has partly overhauled its
labour code, which in the past was punitive for companies such
as miners that must operate 24 hours a day, seven days a week to
be viable, Conibear said.
Sweden has lowered its corporate income tax from 26 percent
to 22.5 percent to attract heavy industry investment such as
mining, he said.
"That is an excellent move that should bring in far more
aggregate economic stimulation than the reduction in federal tax
revenue," Conibear said.
Lundin produces copper, zinc, lead and nickel from
operations in Portugal, Sweden and Spain. It is currently
expanding its Portuguese and Swedish mines and is actively
looking for new base metals assets in eastern Europe, he said.
Rio Tinto has invested nearly 80 million euros in its
Dunkirk aluminium plant in France in the past 18 months and
plans to invest at least that much again over the next five
years to improve its energy saving and efficiency.
Trafigura, the world's third-largest trader in
raw materials, plans to plough over 300 million euros into a
newly acquired copper, zinc and lead mine in Spain.
Trader Glencore has reopened its Portovesme lead
smelter in Sardinia.
Finland has attracted more new mineral discoveries and
mine projects than other parts of Europe as a result of
favourable mining legislation and an attractive tax regime.
Certain ex-communist Central and Eastern European countries
are also trying to revive their mining sectors, but with varying
degrees of success, Conibear said.
Slovakia has substantial untapped industrial metals and coal
reserves, EMED's Anagnostaras-Adams said. "Their regulations
need to be updated, they are quite outmoded. But the intent is
Last month, the European Commission announced an array of
recommendations to revive the steel industry, which has been
hurt by tumbling demand and high energy costs relative to rivals
in the Middle East and United States.
The "EU steel action plan" is the first comprehensive
attempt by the Commission to stem a decline in the steel sector
since the Davignon Plan sought to tackle an industry slump in
the mid-1970s. A similar plan is in the works for the aluminium