EU metal producers fret over cost of new REACh law

By Anna Stablum

BRUSSELS, Feb 12 (Reuters) - A new European law on the handling of metals and chemicals is likely to cost metals firms billions of dollars and the exact terms of the new rules are still unclear, an industry conference heard late on Monday.

The directive -- called REACh, or Registration, Evaluation and Authorisation of Chemicals -- is designed to protect people and the environment from potentially hazardous materials found in manufactured goods, including clothing and vehicles.

"REACh is a huge financial burden for all of us," said Mark Mistry at the Environmental Department of Norddeutsche Affinerie (NAFG.DE).

The German company is Europe's largest copper smelter.

"There are some critical elements regarding REACh and the competitiveness of the European industry," Mistry told a Metal Bulletin conference in Brussels.

The law covers all metals from high volume copper and aluminium to minor metals such as indium, used to make liquid crystal displays for screens, and selenium, used in glass making, construction and agriculture.

Comapnies say they still do not understand which metals and in which form, in particular recycled metals or end of waste material, are covered under the new regulation.

"The European Central Banks say they don't have to register their imports of gold as they claim gold bars don't fall under REACh," said Managing Director Paul Ashford at consultancy Caleb Management Services on the sidelines of the conference.

"NOT ECONOMICALLY VIABLE"

EU figures suggest the direct cost to European industry, including chemicals companies, of meeting the regulations are likely to be as much as 2.3 billion euros ($3.37 billion) over 11 years. The EU metals industry has an annual turnover of around 300 billion euros, according to the European Commission.

"It will not be economically viable to supply between 5 to 7 percent of our product portfolio," said one European metal producer, who asked not to be identified, on the sidelines of the conference.

This could cost the firm millions of euros, he said. The cost would come in lost sales, plus the additional cost that the firm would have to pay to dispose of materials such as arsenic, which would have to be treated like hazardous waste.

However, the producer said some firms could also see this as a business opportunity and focus on the minor metals larger producers were getting rid of.

"It could create a monopoly situation for some metals as you would need the sales volume in order to comply with the legislation," the producer said.