importance of critical raw materials for the future ... · nsn 16% 5. zte 11%. digital agenda for...

EUEU--US Workshop,US Workshop,BrusselsBrussels1212--13 September 201213 September 2012

Mr Christer E. Hammarlund, M.Sc. D.M.S.International Relations OfficerDG CONNECT12 September 2012

Importance of Critical Raw Materials for Importance of Critical Raw Materials for the Future Success of the EU ICT Sectorthe Future Success of the EU ICT Sector

Digital AgendaDigital Agendafor Europefor Europe

PresentationPresentation

1.1. Overall AssessmentOverall Assessment

2.2. Analysis of Current SituationAnalysis of Current Situation

3.3. Challenges to the ICT SectorChallenges to the ICT Sector

4.4. Solutions for the ICT SectorSolutions for the ICT Sector

5.5. FutureFuture


Overall Assessment Overall Assessment

EUEU--US Bilateral Trade 2011US Bilateral Trade 2011Goods: Goods: €€444.8bn ($584.9bn)444.8bn ($584.9bn)

Services: Services: €€257.6bn ($338.8bn)257.6bn ($338.8bn)

Over 50% of EUOver 50% of EU--US bilateral trade US bilateral trade dependent on the Internet!dependent on the Internet!


Importance of the ICT SectorImportance of the ICT Sector

1.1. The EU ICT Sector represents The EU ICT Sector represents 6% 6% of GDP, or of GDP, or $1.054 trillion.$1.054 trillion.

2.2. Over halfOver half of productivity gains of productivity gains generated by ICT investments.generated by ICT investments.


Rare Earths and ICTRare Earths and ICT

• Over two hundred years ago, in 1787, the same year when the U.S.Constitution was negotiated under President-to-be George Washington, an Army Lieutenant and part-time chemist Carl Axel Arrhenius was excited when he came across a strange heavy black rock in an old quarry near the Swedish village of Ytterby.

• He named it Yttrium after Ytterby, the place where he found it.• Incidentally, the American Society for Metals has erected a plaque

at the site.• Later he discovered a second mineral, which was named

Gadolinium after the Professor he sent it to, Prof. Gadolin.


Rare Earths:Rare Earths:Crucial to theCrucial to theICT IndustryICT Industry


HiHi--Tech & Mobile PhonesTech & Mobile Phones

1. The EU is highly dependent on importsEU is highly dependent on imports of “high-tech”metals such as cobaltcobalt, platinumplatinum, rare earthsrare earths, and titaniumtitanium. Though often needed only in tiny quantities, these metals are increasingly essential to the development of technologically sophisticated products in view of the growing number of their functionalities.

2. A mobile phonemobile phone contains today over 40 different raw 40 different raw materialsmaterials, such as cobalt, gallium, platinum and rare earths elements.

3. The case of Gallium (Ga)case of Gallium (Ga)


Who Cares About Gallium?Who Cares About Gallium?


Ga AvailabilityGa Availability

1.1. Two thirds Two thirds of worldwide gallium is from Chinafrom China, KazakhstanKazakhstan and RussiaRussia

2.2. China commands price China commands price building3.3. ChinaChina striving for dominancedominance4.4. World market around 200 tonnes p.a.World market around 200 tonnes p.a.


Analysis of Current SituationAnalysis of Current Situation1.Over the past 10-20 years, Europe has been able

to develop ICTs based on access to raw materials, skilled labour, investments and production sites. (the 4 Ms)(the 4 Ms)

2.2003: China member of the WTOmember of the WTO. ICT production moving to China for competitive reasons.

3.New competitors emerging competitors emerging from China.4.EU producers downsizingEU producers downsizing and focusing on niche

sectors.


China and the WTOChina and the WTO• 1. WTO Complaint on Raw Materials (2011)WTO Complaint on Raw Materials (2011)

(by the U.S., the European Union and Mexico)

• 2. WTO Complaint on Rare Earths (2012)WTO Complaint on Rare Earths (2012)• (by the U.S., the European Union, Japan and Canada)

• 3. European Commission ex-officio investigation into subsidies to Chinese telecom equipment manufacturers by the PRC Government


World Manufacturers ofWorld Manufacturers ofTelecom EquipmentTelecom Equipment

• 2009 Ranking:1. Ericsson 32%2. NSN 20%3. HuaweiHuawei 17%4. Alcatel-Lucent 12%5. ZTEZTE 8%

• 2011 Ranking:1. Ericsson 28%2. HuaweiHuawei 28%3. Alcatel-Lucent 17%4. NSN 16%5. ZTEZTE 11%


ChallengesChallenges1. Reliance on ChinaReliance on China for processing Rare Earth Oxides2. Europe’s ICT future based onICT future based on high-speed Broadband

thru’ fibrefibre--optic networksoptic networks3. Many of the EUMany of the EU’’s critical raw materialss critical raw materials, such as

cobalt, gallium, indium and rare earths, are not tradednot tradedon metals exchanges (e.g. the London Metals Exchange)

4. Increased cyber threats Increased cyber threats as economy increasingly dependent on ICTs

5. Effective mining requires a consistent longconsistent long--term term strategystrategy

6. Loss of competitivenessLoss of competitiveness


OpportunitiesOpportunities

1. Europe’s geology provides ample opportunity ample opportunity for supplyfor supply

2. . In Eastern Europe substantial knowsubstantial know--howhow has been preservedpreserved

3. Scientific infrastructureScientific infrastructure is in placeis in place


Ending with a Quote from 2006Ending with a Quote from 2006

“More countries than ever before are seizing the opportunities ofglobalisation. In the second half of the twentieth century, the United States, Europe and Japan drove the global economy. Today they are being joined by increasingly open and expanding economies, in particular China and India, but also Brazil, Russia and others. China is already the third largest exporter and likely to become the second largest national economy a few years from now. Within the same timeframe, India may become the sixth largest.”“But the EU is losing ground in the highest technology areas.”

Source: EU’s “Global Europe” Strategy, COM(2006) 567 final, dated October 4, 2006

European CommissionEuropean CommissionEuropean Commission

Mr. Christer E Hammarlund

QUESTIONS?QUESTIONS?


Supporting SlidesSupporting Slides


And WhatAnd What’’s Behind the Internet?s Behind the Internet?

ComputersFiber-Optic CablesiPadsiPhonesMobile DevicesPrintersSatellitesServers…


And WhatAnd What’’s That Got to Do With It?s That Got to Do With It?• All of them depend on

access to critical raw materials, incl. rare earths.

• Geological availability is not the problem.

• Industrial processing is a problem.

importance of critical raw materials for the future ... · nsn 16% 5. zte 11%. digital agenda for...

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