The extraction and mining industry in Europe is rather of regional importance compared to the traditional world leaders as the United States, Canada, Australia, South Africa and Chile. However, some of the biggest companies as Anglo American, Rio Tinto and BHP Billiton are based precisely in Europe. Romania is among the leaders on the continent among the countries in Southeastern Europe by mining of basic metals besides Ireland, Portugal, Spain, Turkey, Sweden and Finland. Albania is a basic exporter of chromite worldwide, and the coal mining in Europe is chiefly concentrated in Poland and Germany.
For the past twenty years the European Union has been the largest consumer of ferrous and non-ferrous metals in the world surpassing the USA, China and Japan. The consumption of aluminium, copper, nickel and lead in 2004 was the largest in the EU member states, however, China is currently the leader. According to Eurostat data in November 2006 the new orders for basic metals and metal products grew 18.1% in the EU-25 compared to November 2005. Bulgaria’s and Romania’s joining the EU is expected to slightly decrease the dependence of the Union on the imports of primary raw materials as lead, zinc, aluminium and nickel. The countries from Central and Eastern Europe, including Bulgaria and Romania, account for some 20% of the total production of aluminium in the EU, and for 16% of the copper, 14% of the lead and 13% of the zinc production. Romania is the biggest regional producer of aluminium with 40% of the output and the leading producer of raw steel in Southeastern Europe. The metal mining sector in Bulgaria has resources along with Poland and Romania, but needs significant investments in order to meet the European requirements for environment protection. Poland accounts for nearly the whole production of copper and for half the lead output in Central and Eastern Europe.
The interest in investing in the countries in Central and Eastern Europe has grown since the opening of those countries’ economies. Having been encouraged by the growing global demand and prices of raw materials, huge companies from the mining industry announced in 2006 intentions to develop new mineral deposits in the region. A major shortcoming of the mining industry in Southeastern Europe is the lack of cutting-edge technologies in the operation of the deposits. The quality of raw material production can be significantly improved by using state-of-the-art equipment. The developing economies in Southeastern Europe, and the availability of qualified and low-cost workforce and an adequate infrastructure are the factors that are significantly supporting investment in the region.
The extraction and mining industry in Albania accounts for 20% of the GDP and for 15% of the country’s employment, versus 13% of the GDP and 8% of the employment in Romania. The sector is of utmost importance to Serbia too, with a great economic importance of Kosovo, as the bulk of the valuable deposits of coal, ferrous and non-ferrous metals are in that region. The experts expect a considerable investor interest in the country’s mining industry.
The extraction and mining industry in Bulgaria accounts for the mere some 2% of the GDP compared to 5% for Bosnia and Herzegovina. According to data of Eurostat the production of non-energy resources in Bulgaria represented 1.2% of the gross value added for 2004, which was nearly five times over the EU average. The only other countries with a close result are Romania and Poland.
Resources of the States in Southeastern Europe
| State | Resources |
| Albania | Chrome, oil, natural gas, copper, iron, coal, bitumen, marble, salt |
| Bosnia and Herzegovina | Coal, manganese, bauxite, lead, zinc, iron ores, salt, limestone, marble, clay, gravel |
| Bulgaria | Lead-zinc ores, copper, gypsum, manganese, bauxite, lead, coal, kaolin, sand, gravel |
| Macedonia | Lead and zinc ores, copper, nickel, coal, bentonite, gypsum, quartz, opal, refractory clays, feldspar, decorative stone |
| Moldova | Granite, limestone, clay, sediment rocks, natural gas, brown coal and oil |
| Romania | Oil, natural gas, coal (lignite, brown and bituminous), ferrous and non-ferrous metals (copper, zinc, lead), gold and silver, salt |
| Serbia | Coal, copper, lead, zinc, antimony, bauxite |
| Slovenia | Black and lignite coal, lead, zinc, mercury, uranium, silver, natural gas and oil, sand, gravel |
| Croatia | Oil, coal, bauxite, iron ores, calcium, quartz, sand, gravel |
| Montenegro | Gypsum |
share of Exports and Imports of Raw Materials in Total Trade of Southeastern European States for 2005
| Country | Exports | Imports | ||
| Albania | Minerals, fuels, electricity | 5.00% | Building materials, metals | 15.00% |
| Bosnia and Herzegovina | Raw materials (fuels excluded) | 21.00% | - | - |
| Mineral fuels and lubricants | 9.00% | Mineral fuels and lubricants | 13.00% | |
| Bulgaria | Petroleum products | 10.30% | Oil and natural gas | 15.60% |
| Iron and steel | 8.10% | - | - | |
| Other metals | 10.00% | - | - | |
| Croatia | Mineral fuels and lubricants | 13.60% | Mineral fuels and lubricants | 15.10% |
| Macedonia | Mineral fuels and lubricants | 8.00% | Mineral fuels and lubricants | 19.20% |
| Moldova | Basic metals and their products | 4.50% | Basic metals and their products | 7.00% |
| Montenegro | Raw materials (fuels excluded) | 8.00% | Mineral fuels and lubricants | 16.00% |
| Romania | Metals | 14.80% | Mineral fuels and lubricants | 8.20% |
| Mineral products | 11.10% | - | - | |
| Serbia | Coal mining | 0.10% | Coal mining | 0.30% |
| Extraction of oil and gas | 0.01% | Extraction of oil and gas | 14.10% | |
| Metal ore mining | 0.20% | Metal ore mining | 2.30% | |
| Mining of other metals and minerals | 0.10% | Mining of other metals and minerals | 0.40% | |
| Slovenia | - | - | Mineral fuels and lubricants | 8.20% |
Ferrous Metals
Iron Ores
Bosnia and Herzegovina is the largest exporter of iron ores in Southeastern Europe with annual exports of 1.389 million metric tones for 2005. Some 80% of the iron ore deposits in former Yugoslavia are in Bosnia and Herzegovina. The value of the exported iron ores and steel in 2006 stood at 361 mln convertible marka, and the main destinations were the USA, Slovenia, and Serbia. Bulgaria, Romania and Serbia and Montenegro were the biggest importers in the region.
Imports of Iron Ores (million metric tones)
| 2005 | 2004 | 2003 | 2002 | 2001 | |
| Romania | 6.601 | 6.609 | 6.978 | 6.200 | 3.900 |
| Serbia and Montenegro | 2.880 | 2.057 | 1.804 | 0.119 | 0.023 |
| Bulgaria | 1.426 | 1.725 | 1.725 | 1.500 | 1.300 |
Source: International Iron and Steel Institute
Romania is the regional leader in the exports of ferrous metal waste and scrap with annual exports standing at USD 374.465 mln for 2005.
Exports of Ferrous Metals and Scrap (in mln USD) (chart)
According to preliminary data the world steel production in 2006 totalled 1,2395 million metric tones, up 8.8% compared to 2005 data. The largest producers of raw steel in the world are China, Japan and the USA. Romania ranks 26th among the biggest producers of raw steel, followed by Bulgaria in 41st place, Serbia and Montenegro in 43rd place, Moldova and Slovenia in 55th and 59th place, respectively. The major consumers of raw steel in Southeastern Europe are Romania and Bulgaria with an annual consumption totalling 4.050 million metric tones and 1.970 million metric tones in 2005.
Chromium
By 1990 Albania was the third world exporter of chromite after South Africa and the countries of the former Soviet Union. According to certain studies the chromite deposits in Albania total some 20 million metric tones, and are located near the cities of Korce, Mat, Elbasan and Kukes. However, the energy crisis, the economic chaos after the fall of communism in 1992, and the poor equipment considerably worsened the position of Albania in the global markets. Today Albania is the only European country with significant deposits of that important to the stainless steel production metal.
In 2000, Albania signed a 30-year concession with an Italian consortium led by DARFO on the exploitation of 50% of the reserves of chromium ores and on 100% of the ferrochromium deposits. The consortium, however, stopped the mining works in Katjel mine in 2005 and some analysts foresee the closure of Bulqiza mine – once upon a time the largest mine in the country with an annual capacity of more than 500,000 tonnes. According to the Albanian Economy Ministry the investors do not abide by their obligations under the concession contract which impedes to a large extent the potential development of that sector. The ferrochromium mine Burrel also stopped work in August 2005. With an annual capacity of over 20,000 tonnes in 2005 the mine produced the mere 4,200 tonnes of chromium, 25% of which for only a month.
The processing of ores is a sector of a significant potential for development as after mining the ores are exported having undergone very small or no processing at all.
World Production of Chromite (metric tones)
| 2004 | 2003 | 2002 | 2001 | 2000 | |
| South Africa | 7,625,545 | 7,405,391 | 6,435,746 | 5,502,010 | 6,622,000 |
| Kazakhstan | 3,267,000 | 2,927,500 | 2,369,400 | 2,045,700 | 2,606,600 |
| India | 2,948,944 | 2,210,000 | 2,698,577 | 1,677,924 | 1,946,910 |
| Zimbabwe | 668,391 | 637,099 | 749,339 | 780,150 | 668,043 |
| Finland | 579,780 | 549,040 | 566,090 | 575,126 | 628,414 |
| Brazil | 462,755 | 404,477 | 283,991 | 409,049 | 550,000 |
| Turkey | 436,639 | 291,793 | 313,637 | 389,759 | 545,725 |
| Russia | 320,200 | 116,455 | 74,300 | 69,926 | 92,000 |
| Australia | 265,987 | 138,826 | 132,665 | 11,800 | 90,000 |
| China | 200,000 | 200,000 | 180,000 | 182,000 | 208,000 |
| Iran | 183,171 | 120,000 | 80,000 | 104,905 | 153,000 |
| Albania | 158,392 | 95,000 | 91,000 | 86,000 | 120,400 |
Non-ferrous Metals
Due to the shortage of sufficient resources the EU counts basically on the imports to meet the demand for non-ferrous metals. Therefore the whole sector is characterized by a huge trade deficit. According to expert estimates the global consumption of aluminium will grow by average 5.1% annually by 2010, and the consumption of copper – by 4.7% per year. The prices of scrap and electricity are expected to affect most the production of non-ferrous metals.
Aluminium
Aluminium is among the basic raw material used in car making. An average 120 kg of the vehicle weight is made of aluminium. Construction is the second biggest consumer of aluminium in the EU.
Some 47% of the aluminium in the EU is made of scrap. Romania besides Norway, Russia, Iceland and Mozambique ranked among the major importers of unprocessed aluminium in the EU in 2005. Romania produced 243,605 tonnes of unprocessed aluminium in 2005. Bosnia and Herzegovina was the leader in aluminium ore exports in 2005 with USD115.523 mln , followed by Romania and Slovenia with respectively USD 85.108 mln and USD 61.566 mln. Bosnia and Herzegovina along with Serbia and Montenegro are leaders in the bauxite mining in Europe. According to some estimates Bosnia has reserves of 41 million tonnes of bauxite.
The economic transition in China is expected to lead to a surge in the investments in the production of metals and to increase the competition in the market of raw materials worldwide, in the same time limiting the imports from Europe. China, with its high raw material supply and high consumption is among the major destinations for relocation of the production. The serious barriers to the exit from the branch (the impossibility for a quick and cheap relocation and off-shoring of the production) and the higher competitive advantages of the mining in China as regards expenses, force the European producers to focus on improving the production process and on more effective use of the company resources. According to data of European Restructuring Monitor nearly two-thirds of the strategic steps that were undertaken are related to measures for inner restructuring, and close to 80% of the job cuts in the extraction and mining industry in EU since 2001 are associated with it.
Although not a single case of relocation by big European companies from the extraction and mining industry has been registered so far, the European Commission admits that such a threat does exist in the long term. The reason is the expected relocation of the production of companies from sectors registering high consumption of metals and the desire of the suppliers to achieve a higher profit margin.
Copper
The European Union is the largest region in the world where partially processed copper products are made. Generation and distribution of electricity is the largest consumer of copper accounting for some 65% of the total demand, as copper is among the best conductors of electrical energy. Bulgaria accounts for about one-third of the copper, zinc and lead production in Central and Eastern Europe. The country ranked second in Europe by copper production in 2005, after Poland and Russia, but surpassing Sweden and Portugal.
According to an analysis of the competitiveness of Bulgarian export goods of the Foreign Ministry in 2005 the produced by the country copper had the highest competitive advantages from a total 50 studied countries in the world. The annual production in 2005 was at 94,000 tonnes of pure metal copper. The biggest copper-gold-pyrite deposit in Europe is located in Chelopech, on the southern slopes of Stara Planina mountain. In 2005, a total 911,000 tonnes of gold-copper ore was mined in Chelopech, up 50% year-on-year. In July 2006, the Canadian company Dundee Precious Metals, a concessionaire on the deposit, announced plans to invest USD175 mln in Bulgaria and other Balkan countries, as the investments would include also the building of facilities for gold and copper production in Chelopech. Under the Canadian company’s expectations the mine will produce 20,476 tonnes pure copper and 133,503 ounces of gold per year in 2016.
Exports of Copper Ore and Concentrate (in mln USD)
| 2005 | 2004 | |
| Bulgaria | 79.412 | 36.294 |
| Romania | 31.540 | 29.507 |
| Macedonia | 11.480 | 0.395 |
| Albania | 2.880 | 0.054 |
Zinc
Zinc is mainly used in the construction and the automobile industry for the production of various alloys. It is highly corrosion resistant and has excellent protective properties. The difference between consumption and production of zinc in the EU is smaller than in the case of aluminium and nickel. Major producers of zinc in the Union are Spain, Germany and Finland. The EU imports unprocessed zinc chiefly from Norway, Kazakhstan and Russia. Bulgaria produced 95,070 tonnes of zinc in 2005 or 4.5% of the zinc in the EU.
Exports of Zinc (in mln USD)
| 2005 | 2004 | |
| Bulgaria | 115.011 | 97.014 |
| Romania | 49.968 | 41.958 |
| Slovenia | 24.120 | 19.488 |
| Serbia and Montenegro | - | 4.340 |
| Bosnia and Herzegovina | 0.436 | 0.149 |
| Croatia | 0.262 | 0.406 |
| Macedonia | 0.240 | 0.722 |
Lead
Some 58% of the lead in France, Germany, Italy and the UK is used for the production of lead-acid batteries as the countries rely chiefly on the imports from China and Korea. The lead deposits in the EU are chiefly used for the production of lead cables and sheets. Bulgaria along with China, Kazakhstan, Peru and Morocco was among the major importers of lead in the EU countries in 2005. The country produced 78,451 tonnes of lead in 2005, accounting for 5.4% of the lead in the EU. Bulgaria ranked 11th worldwide by exports of lead for 2005 and accounts for 3% of the world lead deposits. The main deposits of lead-zinc ores are near Madan, Erma river, Roudozem, Laki, Madzharovo, Zvezdel, etc. More than 75% of the lead-zinc ore deposits in Bulgaria are located in the Rhodope mountains and over 70% of their total quantity is mined there. Lower deposits of these ores are located in Giueshevo, Ustrem (Topolovgrad district), Chiprovtsi and Vratsa region.
The Sasa lead mine in Macedonia restarted operation in June 2006 after a four-year suspension of the works. The production of 650,000 tonnes of ore annually is expected. The Russian concessionaire on the deposit Romtrade will pay 3% of the realized production to the Macedonian state. The concession contract is worth 3.02 mln euro and its term is by 2016.
Exports of Lead (in mln USD)
| 2005 | 2004 | |
| Bulgaria | 72.773 | 51.665 |
| Romania | 21.010 | 16.872 |
| Slovenia | 5.934 | 4.386 |
| Serbia and Montenegro | - | 2.486 |
| Albania | 0.294 | 0.263 |
| Bosnia and Herzegovina | 0.088 | 0.320 |
| Macedonia | 0.053 | 1.017 |
Coal Mining
The coal consumption in the EU 25 countries fell by 3.1% to 351.9 million tonnes in 2005 from 363.2 million tonnes in 2004. Poland was the largest producer of coal in the Union with 171 million tonnes and 27% of the total production in 2005. A total 217 million tonnes of coal was imported in the EU in 2005, of which 26% came from South Africa, followed by the former Soviet republics with a share of 23% in the imports. A total 66% of the demand for coal in the EU is expected to be covered by imports by 2030.
Bulgaria and Romania account for respectively 0.2% and 0.1% of the world coal reserves. According to U.S. agency EIA, by mid-2005 Bulgaria’s coal reserves stood at 2.411 billion tonnes compared to 545 million tonnes of Romania.
Slovenia has proved reserves of 227 million tonnes of lignite coal in the Saleska dolina, close to Velenje. The coal deposits in Serbia and Montenegro are estimated at 18.288 billion tonnes, the larger part located in Kosovo, but the mines badly need investments after the poor management during the 1998-1999 crisis. The largest European lignite coal deposit is in Kosovo, and the deposit of bituminous coal in Stari Trg is estimated at 17 billion tonnes. The total deposits of mineral resources in Kosovo have been estimated at 13.5 bln euro by the World Bank. Although legally being still part of Serbia, Kosovo has been under UN administration since June 1999. According to Serbian politicians, however, Serbia will not accept the independence of Kosovo even if that may put at risk the country’s EU membership.
Coal Production (tonnes)
| 2005 | 2004 | |
| Bulgaria | 26 400 000 | 26 625 000 |
| Romania | 34 122 000 | 34 792 000 |
| Macedonia | 6 879 726 | 7 129 535 |
| Slovenia | 4 539 566 | 4 807 302 |
| Albania | 19 000 | 20 000 |
| Serbia and Montenegro | - | 35 691 700 |
| Bosnia and Herzegovina | - | 8 896 257 |
Source: British Petroleum
Non-Ore Mineral Resources
By the mid-1990s the production of non-ore mineral resources, alias industrial minerals, in Southeastern Europe was a strongly developed branch. The transition to market economy between 1991 and 2001 affected negatively the built capacities and the resources in the region, but the general construction boom in the past years stimulated the mining industry. Non-metals are a major raw material for the production of building materials; they are also used in the chemical industry, agriculture, the fabrication of ceramics, paper, glass, plastics and others. The deposits of mineral resources define to a large extent the territory of the industrial branches.
The region is rich in non-ore mineral resources including the mined in the largest quantities barite, different types of clay, predominantly bentonite and kaolin, gypsum, limestone, mineral salt, quartz and silicates, sand, gravel and building and decorative rock materials. Despite the great variety the industrial minerals in Southeastern Europe are of predominantly regional importance and have no influence on the world markets. The deposits and the mining of those materials meet chiefly the local consumption and in most cases the countries need to import non-metals for their production.
Gypsum
The European Union accounts for nearly one-fourth of the world production of gypsum, as the share of Spain alone in 2004 was 10.30%. The production of the countries from Southeastern Europe is far more modest and is chiefly of regional importance. Moldova and Romania are leaders in the region by gypsum production, respectively with 562,700 and 532,867 tonnes for 2005, as in Moldova alone the production of gypsum in 2006 grew by 33%. The demand and the consumption of natural gypsum is expected to go down in the next few years on the account of the so-called synthetic gypsum.
Gypsum Production (tonnes)
| 2005 | 2004 | 2003 | 2002 | 2001 | |
| Moldova | 562,700 | 491,000 | 116,100 | 91,300 | 55,200 |
| Romania | 532,867 | 490,372 | 409,516 | 421,235 | 282,985 |
| Croatia | 196,133 | 193,263 | 166,340 | 145,000 | 130,861 |
| Macedonia | 190,232 | 165,416 | 150,618 | 129,266 | 74,000 |
| Bulgaria | 187,700 | 175,900 | 165,500 | 156,400 | 166,838 |
| Serbia and Montenegro | - | 42,471 | 42,261 | 54,937 | 58,045 |
| Bosnia and Herzegovina | - | 135,520 | 143,047 | 60,000 | 59,728 |
Source: US Geological Survey
With an annual production of more than 180,000 tonnes of kaolin
SEE Mining.pdf, 189 Kb
