Critical metals, here is the advice to the government from steel and scrap companies
Italy will have to start looking for resources such as lithium, bauxite, rare earths and all thirty critical raw materials identified by the European Commission. But where? And how? Assofermet's proposals
The Italian subsoil will soon be in turmoil as is the Department of Economic Development in this last period, spurred by the EU to seek internal supplies to reduce the community's dependence on foreign countries. Everything revolves around that Critical Raw Materials Act , a bill presented in March by the European Commission aimed at «guaranteeing safe and sustainable supply chains for the green and digital future of the European Union».
WHAT THE EU COMMISSION SAYS ABOUT RARE EARTHS
In fact, there is an obligation for the 27 members of the community club to achieve greater internal autonomy in the supply of raw materials essential for the electric mobility of the future. What Europe wants to do, essentially, is to reduce its dependence on China, a capricious but also ambiguous supplier, which geopolitically places itself on the opposite front to that of the Old Continent and which therefore also for this reason could close the taps and raise the prices. It would be a tragedy for Europe, which currently imports around 80% of critical raw materials and from Beijing we purchase 93% of magnesium and 86% of rare metals.
ITALIAN ADDICTION
Italian industry depends heavily, approximately 90 percent, on imports of raw materials. A condition which, following the coronavirus crisis, has shown all its precariousness: companies have struggled to access basic materials, and when they managed to do so they had to pay very high prices. The consequences go beyond the production sector, and concern the entire society: the availability of some products could reduce, their cost increase, factories in difficulty could have to lay off staff.
To further complicate the picture, there is the fact that Italy – like the rest of the European Union – is also dependent on foreign countries for critical raw materials. That is, those materials that are strategic for the economy (because they are used in sectors with high added value, or because they are connected to the manufacturing of clean energy technologies) and complicated to obtain (because the production countries are politically unstable or unreliable).
“The situation of the appropriate control of raw materials in general (both in terms of security of supply and purchase prices), then, is absolutely urgent”. This was written by CRIET, the inter-university research center in territorial economics linked to the University of Milan-Bicocca, in a study dedicated precisely to the need for critical raw materials in Italy.
WHICH SOLUTIONS?
In short, we need ideas to understand how to implement the supply of resources such as lithium, bauxite, rare earths and all thirty critical raw materials identified by the European Commission. Last September 5th, Assofermet, a trade association representing 450 trade and distribution companies in the steel, scrap and hardware sectors at a national level, participated in the hearings of the Senate Industry and Agriculture Commission on the topic of safe and sustainable supply of critical raw materials.
THE TREASURE OF WEEE, DON'T CALL THEM WASTE
The Association highlighted the importance of WEEE (Waste from Electrical and Electronic Equipment) in achieving strategic objectives and expressed its support for the intention announced by Minister Urso to reopen some Italian mines.
Assofermet underlined that for six of the eleven critical raw materials most present in the so-called technological WEEE (lithium, cobalt, gallium, indium, germanium, tantalum, ruthenium, dysprosium, neodymium, terbium, copper), China is the main world producer, with a share that reaches up to 97%. Considering domestic and business devices, currently in Italy only 37% of WEEE is actually collected, well below the 65% target set by the European Union.
Added to this is the structural lack, typical of Italy but also of the rest of the European Union, of industrial plants capable of extracting critical raw materials from the individual components of waste.
CDP IN THE MINE?
But, above all, Assofermet invites the legislator to take into consideration that a direct, strong and prolonged intervention by the State and/or Cassa Depositi e Prestiti may be necessary to support a possible recourse to mining.
This is because supply will become strategic and will therefore have to be supported "at all costs". Which is a different way of saying that the sector will have to be nationalized or in any case kept alive thanks to public funds.
ASSOFERMET'S PROPOSALS
Assofermet believes that our country must diversify the sources of supply of critical raw materials as much as possible and, a bit like with gas during the Ukrainian war, it is necessary to progressively reduce the dependence on some countries from which the gas has so far been supplied. Italy and, at the same time, identify new supplier countries, as well as improve monitoring capacity in order to mitigate current and future risks of new disruptions on the markets in the supply phase.
As regards, however, the so-called "Mining Plan" announced by Minister Adolfo Urso, Assofermet essentially agrees with the strategic initiative to open new mines for the supply of rare earths and raw materials, but some risk elements must be considered . First, the reopening of any mine will have to take into account the important difficulties that currently exist: not only geological factors, capital costs and related risks, but also the length and uncertainty of the permitting procedures, the difficult search for labor specialized and many other organizational aspects that could constitute a deterrent.
Furthermore, according to the trade association, a mapping of available mining sites should be promoted to exclusively identify concrete opportunities to set up a chain of companies that engage in extraction, processing and transformation activities, without unnecessary waste of energy and resources. In any case, the time between the start of a project and the actual availability of the extracted materials on the market can be very long: for the short term, it would be particularly risky to rely exclusively on the reopening of the mines to deal with the emergency of supply of critical raw materials.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/assofermet-proposte-metalli-critici-italia/ on Mon, 09 Oct 2023 05:17:30 +0000.