EU sees risks in raw materials shortages

A shortage of raw materials has become a systemic risk for the global economy, the European Union trade chief Karel De Gucht said on Thursday.
Speaking to the European Parliament during a hearing on raw materials, De Gucht said no country possessed all the raw materials it needed.
"Everybody is affected as this is a systemic risk," he said. "We need to find a global solution, but there is no quick fix."
Shortages of raw materials — particularly of rare earth minerals used in high-tech and defence production — have sent jitters around the world since Chinese restricted their export. China controls more than 90% of current global rare earth production.
De Gucht has sent letters to numerous Chinese ministers voicing EU concerns and the issue of securing steady supplies has become a key topic in EU-U.S. dialogue, he said.
Beyond rare earths, the EU is suffering shortages of cotton and wood, he said. The EU has been pressing India to drop export limits on cotton and Russian export taxes on timber.
"Cotton is a very important raw material and there are more and more problems on that. The same applies for wood," De Gucht said.
To lessen Europe's dependence on foreign raw materials the EU should reopen existing mines and back rare earth operations in Greenland, a landmass that could harbour as much as 25% of the world's rare earth supplies, he said.
Europe should focus on local extraction and forge better diplomatic ties with countries with large natural resource deposits, deputies and industry representatives participating in the hearing said.
The 27-nation bloc should also improve its recycling technologies and stop millions of tonnes of raw materials leaving Europe each year in the form of scrap electronics and cars, deputies said.