EU Launches Strategy To Ensure Access To Raw Materials

BRUSSELS -- The European Commission Tuesday launched a strategy for ensuring its industries have access to raw materials in resource-rich countries, as major developing countries have rushed to secure their share over the past decade.

The strategy includes pursuing "raw materials diplomacy" with African countries and elsewhere, challenging raw materials export restrictions and promoting the recycling of raw materials in the European Union.

The issue is crucial to European competitiveness, which is increasingly being challenged by developing economies, mainly China, said Gunter Verheugen, the commission's head of enterprise and industry, at a press conference Tuesday.

"China, but others too, are actively seeking exclusive and privileged access to certain key raw materials," Verheugen said.

"We have to use the means and instruments at our disposal."

For example, South Africa makes 79% of the world's rhodium supply, a crucial component of car catalysts. Brazil makes 90% of all niobium, used to make high-performance steel alloys. Crucial raw materials supplies are increasingly located in areas with significant political and economic stability, the commission said.

Export restrictions intended to reserve raw materials for use by domestic industries are a big problem for European industries that need these materials. The commission said there are 450 export restrictions on 400 different raw materials around the world.

The commission said it would increasingly work to remove these restrictions through free-trade agreements and challenges at the World Trade Organization.

-By Matthew Dalton, Dow Jones Newswires; +32 2 741 1487; matthew.dalton@dowjones.com