• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Shopping for Raw Materials: Should Africa be worried about EU Raw Materials Initiative? Shopping for Raw Materials:

Shopping for Raw Materials: Should Africa be worried about EU Raw Materials Initiative? Shopping for Raw Materials:



Isabelle Ramdoo, ECDPM

Isabelle Ramdoo, ECDPM



Total Views
Views on SlideShare
Embed Views



2 Embeds 25

http://ecdpm.nl 19
http://ecdpm.org 6



Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
Post Comment
Edit your comment

    Shopping for Raw Materials: Should Africa be worried about EU Raw Materials Initiative? Shopping for Raw Materials: Shopping for Raw Materials: Should Africa be worried about EU Raw Materials Initiative? Shopping for Raw Materials: Presentation Transcript

      • Shopping for Raw Materials:
      • Should Africa be worried about EU Raw Materials Initiative?
      • Isabelle Ramdoo – ECDPM
      • Structure of Presentation
      • Part 1: The Global Debate
      • Part 2: Should Africa worry?
      • Part 1:
      • The Global Debate
    • Challenges facing access to RM
      • Over the past 2 decades:
      • Unforseen and exponential increase in demand for RM from:
        • Emerging countries, fuelled by their rapid eco growth, urbanisation , industrial and development needs;
        • - Developed countries due to rapid diffusion of emerging technologies
    • Results….
      • Price of metals tripled on av. between 2002-08
      • Increasing pressure on supply of RM
      • No immediate sign of physical supply shortage BUT high risk of economic shortage:
        • Reason? Strategic RM are unevenly distributed, some key suppliers (also key users) have imposed trade restrictions
      • Risk for jobs, competitiveness and survival of industries in resource dependent countries
    • Source: Raw Materials Group 2010
    • In response…
      • Resource-dependent countries
      • Strategies/ RM diplomacy to secure access to RM from abroad
      • Maintain stocks
      • Reduce dependency and consumption (through recycling, R&D to find substitutes)
      • Resource-rich countries
      • To keep their RMs for their own devt
      • Use of export restrictions
    • Some key policy responses (1)
      • EU
      • 2008 RMI + definition of 41 strategic RM and 14 critical RMs in 2010 + new RM Initiative in 2011
      • Based on 3 integrated and complementary pillars:
      • Market access (autonomous/ bilateral/ multilateral)
      • Sustainable domestic supply
      • Reducing EU consumption/boosting efficiency/recycling
      • US
      • 2008 Study on “Minerals, Critical Minerals and the US Economy” + 2010 Critical Materials strategy. Measures:
      • (i) Identified 11 strategic minerals;
      • (ii) Recycling/ reuse/ efficient use of resources
      • (iii) Development of substitutes
      • (iv) Stockpiling of key resources
      • (v) Need to diversify global SS chain
      Some key policy responses (2)
      • Japan
      • 2008 guidelines for securing national resources + 2009 Strategy to ensure stable supplies of rare metals: 5 pillars:
      • Loan guarantees to support resource acquisition projects
      • Financing overseas field surveys
      • Stockpiling of 7 rare metals
      • Information gathering and dissemination on mineral availability abroad
      • Financing research for new types of mining, exploration and recycling
      Some key policy responses (3)
      • China – two-ways strategy (both rich and dependent):
      • Domestic: expand domestic investment; restrict foreign investment in certain key areas; use of trade restrictive measures to keep resources;
      • International – heavy investment in key countries; financing of RM-related infrastructure and services sector
      Some key policy responses (4)
    • Part II: Should Africa Worry?
    • Minerals are key to Africa…
      • 30% of world reserves of RM + produces > 60 minerals and metals + vast and unknown potential
      • Some are major producers of key raw materials :
        • SA 79% of PGMs
        • DR Congo 41% of world production of cobalt
      • Heavy reliance for some on exports of RM:
        • Botswana – 93.5% exports to EU in diamond and nickel;
        • Guinea: 75.7% exports to EU in aluminium and diamond;
        • Zambia – 61.5% exports to EU in copper
    • BUT on average RM not the major export…
    • HOWEVER importance is likely to accrue...
      • Given increasing demand for RMs
      • Africa’s largely unexploited reserves and growing interest from all resource dependent countries
      • Resource-rich countries’ intention to diversify sources of supply, notably away from China
    • Growing concerns in Africa (1)
      • Africa’s major concern is about EU RMI (not so much about other strategies)
      • In the corridors, most pessimistic views:
      • RMI viewed as a means to grab resources – plunder – self interested – giving with one hand (devt) and removing with the other (trade)
      • Why?
      • - EPA negotiations, countries asked to remove export restrictions. Difficult to negotiate flexibilities
      • - Increasing perceived as being closely linked to EU’s policy to ensure undistorted access to RM;
      • Viewed as limiting policy space for industrialisation, export diversification and value addition
      • Has become a political issue with EU
      Growing concerns in Africa (2)
    • What implications for Africa?
      • Initially, RMI not specifically targeted to Africa (not EU’s main source of imports) – major targets: China, Russia, Ukraine
      • BUT, as a principle, EU likely to lead a strong battle against trade restrictive measures, independent of source or importance of the market – do not want to set precedence
      • THEREFORE Africa will also be asked to remove restrictions
    • Challenges…
      • For countries negotiating EPAs:
      • Trade : Will be required to eliminate export taxes
      • Challenges : Revenue loss and constraining policy space for future industrial policies.
      • Investment : might be asked to provide market access for investment in mining and related services
      • Challenges – While FDI is good, without proper regulatory investment frameworks and well defined industrial policies, might constrain policy space for future devt (eg for SMEs)
      • More apprehension from non-EPA countries
      • RMI 2011 – “Autonomous” measures not clear – GSP?
      • Link between trade and development (coherence) not clear as well
      • Although governance is important, implementation is seen as quite challenging, as it requires a fundamental change in “culture” of work
    • Opportunities…
      • Africa can use RMI as an opportunity
      • Improving resource management:
      • Financial – DRM – taxation of resources, creation of Fund – European countries experience helpful + mainstreaming resources into NIPs and RIPs
      • Technical : seek support from EU in areas such as capacity building, institutional building, setting up regulatory framework
      • (ii) Strengthening states and governance
      • RM are ownership of the state and exploitation rights are delivered by the state – important to have transparency in government revenues + expenditures + contracts
      • Also a matter for firms: companies to disclose what they pay + code of conduct for foreign and local firms – 2011 RMI mentions that EU would work in this direction. Good opportunity to engage
      • (iii) Improving knowledge base and geological survey - African countries could engage discussions with EU to conduct such surveys to enable them to have a better information about the soil content
      • (iv) Better use of local content – use domestic labour (allow transfer of technical know how); while remaining compatible with international obligations, use of locally available inputs (enhance participation of local firms – will promote forward and backward linkages)
      • (v) Transfer of technology important to help development of indigenous enterprises
      • Thank you
      • for your attention
    • For more information, please refer to: www.acp-eu-trade.org www.ecdpm.org Isabelle Ramdoo, [email_address] San BILAL, [email_address] Tel. +32-2-237 43 89 Fax +31-43-237 43 19 ECDPM O.L. Vrouweplein, 21 NL – 6211 HE Maastricht The Netherlands Rue Archimède, 5 B- 1000 Brussels Belgium