The law on critical raw materials of the EC is a chance for Bulgaria to occupy a strategically important place in the European Union. It remains only to take advantage in a smart way. This was stated to Dir.bg and 3eNews by one of the leading experts in resource management, environment and circular economy – Boyan Rashev, managing partner, denkstatt and consultant of the Expat Natural Resources contract fund for investments in energy and raw materials. He indicated 10 reasons why the utilization of this, in his words, “incredible chance” is important for the country, and among the obstacles he pointed out the lack of statehood, legislative contradictions and disturbances. Here is what else expert Boyan Rashev said:
– “The EC has finally woken up” – that’s how you, Mr. Rashev, commented on Brussels’ proposal for the new regulations on key fossil resources and on critical raw materials and described them as “a miner’s dream”. Is a revival of mining and a rapid development of the extractive industry set?
– This is exactly what must happen if Europe really wants to achieve at least a small reduction in its dependence on the import of raw materials, re-industrialization and the goals of the Green Deal. Unfortunately, it seems unlikely to me. Yes, there will probably be some change – here and there individual projects may happen, mostly in the Scandinavian countries and Eastern Europe. In general, however, I think that it will remain among the many political requests that the European Union and the governments of the member countries talk about, but no one actually implements. It is unlikely that the mining industry will suddenly become a top priority for Europe after decades of building the most negative possible image of this business.
– Could you clarify the difference between “strategic raw materials” and “critical raw materials”?
– The concept of “critical raw materials” or “critical raw materials” has existed since 2008, that is, from the previous super cycle of raw material prices. Then the European initiative for raw materials was launched. EU-critical raw materials are those characterized by a particularly high risk of supply shortages in the next 10 years and which are particularly important to the value chain. In 2011, the first such list was created at the European level. Today, a fifth list is already available, which has a much wider scope – it includes 34 different raw materials, mainly metals.
The proposed European Critical Raw Materials Act also includes a second list – the so-called “strategic raw materials”. Roughly speaking, there are added raw materials that do not meet the strict criteria to be declared “critical”, but actually limit the development of strategic industries for the EU, incl. the entire so-called “net zero industry”, that is, the production of renewable energy sources, batteries, any components of power systems, electrolyzers. Examples of such are copper and nickel.
– What deposits and potential opportunities does Bulgaria have??
– Bulgaria has great opportunities, which are mostly related to copper. Note that the global market for copper in the past 2022 is about 300 billion dollars, and all others (critical raw materials for the energy transition) in total do not exceed 150 billion. In two words, the shortest description of the so-called critical or strategic raw materials for Europe from an economic point of view is “Copper and others”. This is an incredible chance for Bulgaria because:
1. We are in third place in Europe in copper ore mining.
2. Bulgaria is among the top 6 importers of copper concentrates in the world.
3. Bulgaria is the third largest exporter of unrefined copper in the world for 2020 and the center of copper recycling in Europe.
4. Sales of copper and copper products account for about 10% of Bulgaria’s exports.
5. A few days ago, Aurubis Bulgaria announced plans for a new major investment in the plant in Pirdop, which will move us up in the ranking of refined copper producers.
6. The mines of Asarel-Medet, Elatsite-med and DPM Chelopech are constantly investing in modernization and increasing production.
7. Bulgaria has many new deposits with proven reserves and a large potential resource for building new mines.
8. More and more companies in our country use honey produced in Bulgaria and produce products with a higher added value.
9. Unlike most countries in the EU, Bulgaria still has a qualified human resource capable of doing the above-described work in a qualitative manner.
10. Unlike most countries in the EU, Bulgaria still has an electricity system capable of providing abundant, reliable, clean and cheap energy needed for mines and metallurgy.
Copper is the basis, but Bulgaria is in a strong European position in other metals as well. Thanks to KCM, we are among the leading countries in the mining, production and recycling of lead and zinc. In addition, we also own large deposits of manganese and tungsten, which we do not use adequately – they need to be quickly invested.
– What should the country do in the near and longer term?
– The law on critical raw materials of the EC is a chance for Bulgaria to occupy a strategically important place in the European Union. It remains only to take advantage in a smart way. In general, the conditions for doing business in the relevant sectors – mining and metallurgy – need to improve rapidly. Thus, local companies will be able to quickly invest their profits here, and we will also attract the big international players in the sector. Of course, we have to make it so that we also attract manufacturers of components or finished products from the relevant metals, so that a greater part of the value remains here.
– What are the main obstacles??
– The terrifying legacy of communism in these sectors, the fears and prejudices of the people, the bureaucracy and above all – the lack of statehood. Mineral resources are state property and the state should want to benefit from their extraction by providing good conditions for private mining companies. At the moment, the state only hinders them.
– Your recommendations for the regulatory framework, the construction of infrastructure and the implementation of nature-friendly technologies?
– Let’s start with the lack of a clear strategy for the development of the mining industry at the national level. There is no understanding of the benefits of the industry, which shows on the one hand insufficient work of the companies with the public, but on the other hand shows the lack of support for the industry from the state. The deadlines for issuing permits are not mandatory for the administration, and therefore unpredictable for the business, which hinders planning. Going through all the required procedures takes a very long time, even without appeal. There is a need for unambiguous interpretation and application of legislative requirements by all institutions. There is not always clarity regarding the internal departmental procedures in the institutions. There are contradictions in acts at the European level – e.g. The Critical Raw Materials Act will come into direct conflict with environmental regulations.
I can’t give general recommendations for projects. There are many things to consider, and specific recommendations apply to each specific project.
– Are there any investment interests already being noticed??
– There has always been investment interest because we have deposits, a strong mining and metallurgical industry and trained personnel. Unfortunately, the latter are rapidly decreasing or working all over the world, but not in our country.
– And the danger of being surrounded?
– The Bulgarian state has repeatedly proven its inability to take advantage of its natural advantages or favorable circumstances in order to achieve economic competitiveness. Yes, it is very likely to happen again. Serbia, for example, already attracts large mining companies – it’s just that things happen there quickly and efficiently.
2023-08-04 06:42:28
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