Salzburg Summit 2022 - Raw Materials Supply in Europe 2022

From 27 to 29 July 2022, the Salzburg Summit 2022, organised by the Federation of Austrian Industries, took place in Salzburg. This high-profile event is also known as the Festival of Business and over 200 of the most important CEOs, politicians and opinion leaders from Austria and around the world gathered to discuss key issues that move society, including speakers such as Karl-Theodor zu Guttenberg, Johannes Hahn, Sabine Herlitschka and Wolfgang Schüssel. The topics ranged from the economy to politics to science.

This time, Peter Moser, Vice Rector of the Montanuniversität Leoben, was also invited as an expert and speaker, who provided the audience with special insights and his thoughts on the current controversial topic of raw material supply in Europe. The aim of his presentation was to show how a more crisis-proof provision of raw materials for Austrian and European industry might be achieved in the future.

Raw Materials Supply in Europe 2022

To this end, Vice Rector Moser began with a brief spotlight on the current state of raw material supply in Europe, for which the number of critical raw materials communicated by the EU, including cobalt, gallium, graphite and others, was a perfect example: Cobalt, gallium, graphite or the frequently mentioned rare earths. The number of these critical raw materials has more than doubled in the last ten years, i.e. since 2012: today there are 30 critical raw materials whose supply situation is so critical that they are put on a red list by the EU.

The lack of availability of raw materials for chip production or for solar panels, wind turbines, etc. are dramatic examples of the disruption of supply chains caused by COVID-19 or brought to light by the Ukraine war. Furthermore, with the outsourcing of raw material production from Europe, production has been concentrated in a few countries, mainly in China. Today, China controls the entire range of resources for the Green Deal, both in terms of raw materials and their processing technology. Without raw materials from China, the Green Deal would be unthinkable, Moser stressed emphatically.

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Despite this seemingly gloomy situation, he called on people not to follow the ostrich priciple and bury their heads in the increasingly scarce sand. Our society in Europe has the opportunity to secure its future supply.

Local raw material supply

The strategy to reduce dependency cannot realistically lead to self-sufficiency in raw materials supply, but should rather lead to guaranteeing a crisis-proof supply situation, which is composed as follows:

- raw material production in Europe from own deposits

- utilisation of raw materials from recycling

- secure imports within the framework of raw material partnerships

- market stabilising measures

With regard to raw material production in Europe from own deposits, Moser explained that it has been proven that Europe has the necessary deposits as well as the most modern and sustainable technologies to extract raw materials locally and in a CO2-neutral way and to establish secure supply chains. This would also create the necessary link between the population, their own consumption patterns and the raw materials, something that has often been lost in modern times due to the outsourcing of production to third countries.

Recycling raw materials

However, according to Moser, the utilisation of raw materials from recycling also plays a decisive role in the sustainable anchoring of production chains in Europe, especially with regard to the establishment of a European resource cycle in the sense of the circular economy. The goal must be to recycle products at the end of their use to the maximum extent possible in Europe and thus to create raw materials for new products.

Unfortunately, the Circular Economy approach is often mistakenly seen as the possibility of supplying society with 100% recycled products in the near future. It is not a lack of will to recycle that is responsible for the fact that we will still need new raw materials to a considerable extent in the long term, but rather the following essential circumstances:

- the unavoidable downgrading of material qualities

- the need for and utilisation of new types of raw materials

- the medium and long-term binding of resources in infrastructure and durable products before they can be recycled.

- Unavoidable material losses in the course of use and recycling: even with the greatest possible optimisation, technical systems always have an efficiency of less than 100%.

Recycling offers enormous opportunities for a secure supply of raw materials in the long term, but society must also be aware of the current limits of recycling.

Strategic raw material partnerships

As a further point, Moser explained that Europe has been dependent on raw material imports in the past and will continue to be so. Complete or even large self-sufficiency is not feasible, he said. Therefore, a secure import on the basis of broad-based raw material partnerships with supplier countries would be an essential cornerstone of a crisis-proof raw material supply.

In general, it is important to take a long-term strategic view of such partnerships and not just a short-term market-oriented one.

Stockpiling raw materials

To round things off, the long-standing commodity expert emphasised that it would be extremely important for sustainable raw materials suppy security to take it out of the short-term element of supply and demand dynamics driven by speculation, which only results in high volatility of commodity prices and leads to a lack of willingness to invest. The practice of strategic stockpiling, which has been followed in the energy sector for years, could remedy this situation. It has proven very successful in the oil sector and is currently being introduced in the gas sector as well. Stockpiling critical raw materials at the European level, i.e. for those raw materials that are on the red list, would even be feasible in the very short term because the quantities are small and manageable, stockpiling is technically simple, much simpler than for oil and gas, and the costs are low compared to damage from unstable supply chains. Experience shows, he said, that even small quantities from the release of strategic reserves quickly stabilise commodity markets and bring demand and supply into balance. Moser reiterated that he was not at all in favour of state intervention in the free economy, but simply in favour of ensuring a basic supply of energy and raw materials for a successful economy.

He said that all these measures could be implemented in the necessary perspective horizon of 2030 to 2035, but with the condition that above all high-quality deposits in Europe as well as raw materials from recycling can be put to value-creating use in licensing procedures that are manageable in terms of time. In addition to responsible technology and committed young people, suitable legal framework conditions are essential. The above-mentioned aspects are a high motivation to pay increased attention to a secure supply of raw materials for Europe, also in the area of mineral raw materials and not only in the area of food.