National Mineral Resources University, Saint Petersburg, Russia:

A. E. Cherepovitsyn, Head of a Chair of Organization and Management, Economics Faculty, e-mail: alekseicherepov@inbox.ru

Saint Petersburg State Polytechnic University, Saint Petersburg, Russia:
S. V. Fedoseev, Professor of a Chair “Global and Regional Economics”, Engineering-Economics Institute
A. B. Teslya, Assistant Professor of a Chair “Global and Regional Economics”, Engineering-Economics Institute
E. Yu. Vyboldina, Post-Graduate Student of a Chair “Global and Regional Economics”, Engineering-Economics Institute

This article shows the analysis of current production and consumption trends of raw materials in the EU and BRICS with a focus on rare-earth elements. Analysis of amount and structure of the global reserves of rare-earth elements shows that BRICS countries together have a majority of the global reserves and resources of rare-earths. Nowadays, BRICS countries joined the race for raw materials demand, which is primarily related to intense industrial growth of BRICS over the last years. Strong and unintended growth of global demand led to a significant increase of rare-earth elements' price as a consequence to the deficiency of these metals. In this context, there was made a definition that the EU dependency from foreign metals supply is growing. Decrease of production of rare-earths in the EU due to adoption of laws and environmental standards is aimed at the real economy requirements. In the future, the lack of raw materials will negatively impact the development of EC high-value industry chains and innovative technologies. This article shows the analysis of measures, taken by EU producers in order to address this problem, such as reducing the shortage of raw materials and recycling. However, in the nearest future the EU will not be able to meet the growing demand for rare-earth elements because of limited amount of scrap market. Therefore, sustainable raw materials supply at fair prices is a necessary condition for further economic prosperity of the EU.

This article also gives further recommendations regarding Russian rare-earth market, aiming at covering national demand in rare-earth elements and becoming the leading exporter of these metals. This research work was carried out on the basis of scientific researches with the financial support of the grant of Russian Scientific Fund (project No.14-38-00009). MBO of complex development of Arctic zone of Russian Federation. Saint Petersburg State Polytechnic University.

1. EU Energy efficiency policy. Available at: http://ec.europa.eu/energy/efficiency/index_en.htm (accessed: October 15, 2013).
2. European Emission Trading System. Available at: http://ec.europa.eu/clima/publications/docs/factsheet_ets_en.pdf (accessed: October 15, 2013).
3. EU legislation on Registration Evaluation Authorization of Chemicals. Available at: http://echa.europa.eu/regulations/reach/legislation (accessed: October 15, 2013).
4. The Raw Materials Initiative — meeting our critical needs for growth and jobs in Europe, Communication from the Commission to the European Parliament and the Council, Brussels, 4.11.2008. Available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0699:FIN:en:PDF (accessed: October 20, 2013).
5. Strategic implementation plan for the European innovation partnership on Raw Materials Part I – 18/09/2013. Available at: http://ec.europa.eu/enterprise/policies/raw-materials/files/docs/eip-sip-part1_en.pdf (accessed: October 10, 2013).
6. Tenth Report On Potentially Trade-Restrictive Measures, identified in the context of the financial and economic crisis, European Commission Directorate-General For Trade. Available at: http://trade.ec.europa.eu/doclib/docs/2013/september/tradoc_151703.pdf (accessed: October 17, 2013).
7. Kryukov V. A., Tolstov A. V., Samsonov N. Yu. Strategicheskoe znachenie redkozemelnykh metallov v mire i v Rossii (Strategic significance of rare-earth metals in Russia and in the world). Available at: http://dnevniki.ykt.ru/ivanshamaev/544301 (accessed: February 28, 2014).
8. Commission Staff Working Document, accompanying the Communication from the Commission to the European Parliament and the Council, the Raw Materials Initiative — meeting our critical needs for growth and jobs in Europe. Available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SWD:2012:0027:FIN:EN:PDF (accessed: October 20, 2013).
9. Tenth Report On Potentially Trade-Restrictive Measures, identified in the context of the financial and economic crisis, European Commission Directorate-General For Trade. Available at: http://trade.ec.europa.eu/doclib/docs/2013/september/tradoc_151703.pdf (accessed: October 17, 2013).
10. Mikhaylov V. A. Redkozemelnye rudy mira. Geologiya, resursy, ekonomika (Rare-earth ores of the world. Geology, resources, economics). Kiev : Publishing-polygraphic center “Kievskiy universitet”, 2010. 223 p.
11. European Statistical Service. Available at: http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/themes (accessed: September 20, 2013).
12. J. O’Neill, China, and the Growth Markets’ in Viewpoints, Goldman Sachs Asset Management, 2012. Available at: http://www.goldmansachs.com/gsam/worldwide/insights/jimoneill/viewpoints/index.html (accessed: October 15, 2013).
13. GDP growth, Source: IMF. Available at: http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/index.aspx (accessed: July 20, 2013).
14. Tackilng the challenges in commodity markets and on raw materials, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, 2.2.2011. Available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0025:FIN:en:PDF (accessed: October 20, 2013).
15. Swanepoel E. China to outweigh rest of the world for base metals demand, Mining Weekly Magazine. Available at: http://www.miningweekly.com/article/china-tipped-to-become-global-leader-for-base-metals-demand-2013-10-18 (accessed: October 19, 2013).
16. Olivier Vidal. Metals and inerals will be the next finite resource shortfall. Available at: http://theconversation.com/profiles/olivier-vidal-108842/articles (accessed: February 25, 2014).
17. Baroncini E. The China-rare-earths WTO Dispute: A Precious Chance to Revise the China-Raw Materials Conclusions on the Applicability of GATT Article XX to China’s WTO Accession Protocol. Cuadernos de Derecho Transnacional. Octubre 2012. Vol. 4, No. 2. pp. 49-69. Available at: www.uc3m.es/cdt (accessed: October 25, 2013).