By Eugene Gerden
The volume of mining activity in Spain and Portugal on the Iberian Peninsula are steadily recovering from the pandemic crisis thanks to the ongoing growth in mineral commodity demand and prices for metals in the global market. Spain and Portugal show stable growth rates this year, despite the pressure from environmentalists.
Regarding Spain, current pressure on local miners is strong as the socialist government of Pedro Sánchez has committed to achieving carbon neutrality by 2050. This means that by that date Spain will only be able to emit as much CO2 as its carbon sinks are capable of absorbing.
That also means that the country will be forced to close some of its mines, the development of which has been associated with harm to the environment as well as stopping production of radioactive minerals that may also include Rare Earth Elements.
In recent years, Spain has also been reducing the volume of domestic coal mining and there is a possibility the same situation may develop with uranium. At the start of this year, the Spanish government announced plans to ban mining uranium and other radioactive minerals in a move that it says is in line with the EU energy policy.
According to some leading Spanish mining analysts, the ban may also affect rare earths projects as some of REE minerals could have small – but not harmful – radiation.
Implementation of these plans is part of the bill to reach a carbon neutral economy by 2050 which has focused on fossil fuels, hydrocarbons, and fracking and was approved by the Spanish government in May 2020. A series of amendments were also proposed that may fully ban exploration and mining of radioactive minerals.
These plans, however, have already sparked serious concerns from miners and analysts who have fears for the future of domestic mining. As Spain has a wide range of mineral resources, its mining industry has a strategic importance for the economy. The introduction of restrictions, according to local experts, may lead to serious losses to the country’s budget plans. Currently, Spain is the second largest copper producer and the first producer of gypsum in the EU.
In recent years, the annual mining output of the country has ranged between €3.28 billion – €3.5 billion; however, the current policy of the government may lead to a significant decline in these figures. Meanwhile, metallic minerals such as copper, zinc, nickel, gold and wolfram (tungsten) continue to be mined.
The situation in neigbouring Portugal is better despite COVID-19 (the country has one of the highest mortality rates in Europe). The government has no plans to introduce any restrictions on mining activities in the country and is planning to pay attention to development of its rich lithium reserves.
At present, lithium reserves of the country are estimated at 60,000 tonnes. In addition, Portugal has large areas containing the hard rock lithium mineral spodumene that are unexplored. Currently, the country remains the Europe’s largest producer of the metal with the annual output 1,200 tonnes.
It accounts for about 11% of the global market; however, its output is entirely used to make ceramics and glassware. Therefore, the EU’s lithium needs have been met by imports from Chile, Australia, and China.
The development of the country’s lithium reserves will be carried out within the existing state strategy for developing its mineral resources. The strategy also involves rehabilitation of abandoned mining areas and attracting private investors. So far, some progress has been achieved which is reflected by some major investors participating in the local market.
One of them is Savannah Resources Plc [SAV-AIM; SV.H-TSXV], a multi-commodity mineral resource development company, which plans further development of the Mina do Barroso lithium project in northern Portugal with its local partner Galp Energia. The project is set to become Europe’s first significant producer of lithium from spodumene. The project holds a resource estimate of 20 million tonnes of lithium with over 200,000 tonnes contained Li2O. Most of the future output will be supplied for the electric vehicle (EV) battery industry.
The only problem for Savannah may be that, according to experts, it is 2.5 times more expensive to produce lithium extracted from Portugal’s spodumene-bearing granite rocks than from the brine fields of Chile. The South American nation hosts some of the largest known reserves. Portugal covers 50% of the Iberian Pyrite Belt, considered to be the EU’s most important metallogenic region.
At present, the country is among the EU’s major producers of copper, tin, lithium and tungsten, while its largest fields include Neves-Corvo, Panasqueira, Aljustrel and others.