"Debate: A new government must put the shovel in the ground
Access to raw and input goods is crucial for the competitiveness of Swedish industry. A growing shortage also poses a decisive threat to the green transition, writes
Mats Kinnwall , Chief Economist, Teknikföretagen.
Published: September 15, 2022, 2:03 p.m
The President of the European Commission, Ursula von der Leyen, launched in her State of the Union speech, yesterday, September 14, the need for a Raw Materials Act, an action plan for the access to raw materials. The EU warns of China's dominant position and that Europe risks ending up in the same cramped situation as when it comes to oil and gas.
Access to raw and input goods is crucial for the competitiveness of Swedish industry. A growing shortage also poses a decisive threat to the green transition.
Sweden can already do a lot on its own, without having to wait for an action plan from the EU. The shortage of raw materials is redrawing the map, which means a great opportunity for Sweden.
Swedish industrial companies are in a perfect storm that risks leading to continued production losses/limitations, an acute shortage of metals and minerals and thus a delay in the green transition. When the global playing field is redrawn, companies are forced to look for new markets to secure access to crucial inputs.
It is therefore time for Sweden to see the opportunity, remove the obstacles to mining and put the shovel in the ground.
The perfect storm driving increased demand for metals and minerals largely consists of an accelerating green transition with wind power, batteries and technology shifts, as well as a willingness to promote sustainable and ethical mining. Figures show that all metals and minerals will increase in demand until 2050, despite an increased focus on recycling.
Especially energy-critical metals and minerals such as cobalt, lithium and
graphite are expected to increase sharply by around 300 percent. The need in Sweden is expected to increase significantly more, linked to the plans for greatly expanded production of batteries. But demand is difficult to meet due to an uncertain supply situation caused by war, rampant prices and a broad democratic recession.
Today, the EU is heavily dependent on imports as a large part of the production of critical deposits in the form of metals and minerals takes place outside the EU, not infrequently in unstable and undemocratic countries. Something that has proven to be increasingly unsustainable for Swedish industrial companies. The trend is clear. More companies are reviewing their supply chains to increase resilience. Figures from Business Sweden show that companies are already buying less and less from Chinese sub-suppliers and are increasing their purchases in Europe, and more people are asking more specifically for raw materials from Sweden.
One may resent the fact that globalization is partially reversed with reduced world trade and global growth as a result. At the same time, we have to adapt to the realities, a situation that economists usually call "second best".
In the wake of the changes, a clear window of opportunity opens for Sweden. Half of the metals and minerals that the EU has identified as critical are found in the rich Swedish bedrock. The potential in becoming a country that can in a sustainable, climate-smart and safe way secure access to important inputs and create a new important market for Sweden is obvious. The recent increased political consensus regarding the need for mining in Sweden gives some hope that Sweden can quickly come forward and take its place when the map is redrawn. But if it is to succeed, the obstacles that stand in the way of starting mining in Sweden need to be removed. And that requires an urgent decision by the government that takes office now after the election. There is no doubt that other democratic countries with similar conditions, such as Canada and Australia,
In addition, it is likely that the companies within the Technology Companies' industries are primarily interested in obtaining safe access to cost-effective raw materials and inputs, the country of origin is probably of secondary importance. If we do not fix good conditions for raw material expansion in Sweden, the industrial companies will therefore turn to foreign suppliers.
The issue of mining metals and minerals naturally contains many conflicts of interest and it is important that all steps in the transition are carried out in a respectful manner. But at the same time, Sweden must now make a choice and it should be to carry out the reforms that are requested and remove the obstacles that stop us from putting the shovel in the ground.
It is good that the EU is addressing the issue, but politics already needs to show action and send an important signal about Sweden's way forward in the vacuum that now arises when the production of important raw materials is regionalized and concentrated on the world map. If there are no reforms, it will be impossible for Sweden to compete on equal terms with other countries that aspire to meet industrial companies' needs for raw materials and enable the shift to a green and sustainable society.
Mats Kinnwall , chief economist, Teknikföretagen"
https://www.di.se/debatt/debatt-en-ny-regering-maste-satta-spaden-i-marken/
I do not believe that the protagonists of deindustrialisation will prevail. In our country, they have come a long way creeping and quietly, but people are waking up. At the latest when they look at their bank accounts or read about the next natural disaster. All this can only be solved with industry and not by preventing and eliminating it.
Goes into judgment more critically:
"The expert on the battery boom: "Public money will burn up"
Battery investments have rained down on Sweden this year. And there is enormous potential for what the industry can mean for the country, say experts Di spoke to. But they believe the investments may have come too late.
Updated: September 6, 2022, 11:40 am
Published: September 6, 2022, 11:37 am
Northvolt brings in 11 billion: "A way for us to take a bigger part of the pie". Första APfonden's CEO Kristin Magnusson Bernard explains why the fund supports Northvolt, and gives her view on the capital raising market
Hans Eric Melin criticizes the European car industry for being late with electrification investments.
Northvolt was the first with its battery factory in Skellefteå, which was announced in 2017. Five years later, the venture has gained company. Just Northvolt together with Volvo Cars this year announced an establishment in Gothenburg, Scania has decided to invest billions in Södertälje and the latest announcement was that the Volvo group wants to start a battery factory in Mariestad. In addition, Norwegian Freyr has announced plans to build a facility in Svenljunga.
As the new battery industry is expected to lead to tens of thousands of new jobs in the country, the government now wants to appoint a
battery coordinator in the Ministry of Economy. Sweden is a future "major power in battery manufacturing", proclaimed Minister of Industry Karl-Petter Thorwaldsson this summer.
"What Northvolt has started is extremely important. The company saw early on what electrification would mean and the importance of having a European production of batteries. They got the EU on board and lit a spark that spread across the continent," says Hans Eric Melin, specialist in energy storage and founder of the consulting firm Circular Energy Storage.
That there has been such a boom in Sweden is about the availability of renewable electricity and that we have a strong automotive industry that needs to change, says Hans Eric Melin. Samu Slotte, head of sustainable financing at Danske Bank , also points out the availability of the necessary minerals in batteries and refers to Finland and Norway, which have the same conditions and see the same development.
"There are many established companies along the entire value chain, from raw materials to recycling. And there are many who will get a boost from the growth of this industry. If you then get to Nordic clusters, it also creates a positive spiral with knowledge sharing, resources and better access to skilled labor", says Samu Slotte.
But there is concern that development has started too late
"China has invested heavily in battery manufacturing and has a clear leading position globally. The question is how the Nordic countries can cooperate and whether it is possible to take any market share from them. Asia, with China and South Korea, is strongly dominating at the moment," says Samu Slotte.
Hans Eric Melin says that there is a strong demand for batteries and many incentives to have a European production. But there are also a lot of obstacles. He mentions, among other things, lack of skills, high costs and difficulties and reluctance to mine the minerals in Sweden.
"Have we acquired the right skills quickly enough and do we have the opportunity to manufacture batteries at as low a cost as Chinese factories? And do we get hold of the battery materials?
If it takes ten years or more to get permission to produce lithium or graphite, then we are not serious about the investments," says Hans Eric Melin.
Hans Eric Melin believes that Asia will continue to be dominant in the battery market. Among the European projects, he believes that Northvolt has good conditions, but that many of the similar projects that have been started around Europe risk not being completed.
"I don't see it in Sweden, but on a European level and to some extent also in North America, I think we have a large number of Power Point projects that will not go further than where they are today. They have made a couple of carbon copies of Northvolt but completely without substance," he says and continues:
"As soon as someone wants to start a battery factory, it is considered serious and the politicians line up to get more factories built. There, I think we have a problem that a lot of public money will burn up.""
https://www.di.se/hallbart-naringsliv/experten-om-batteriboom-offentliga-pengar-kommer-brinna-upp/
Nothing new. We know it's urgent
On the 20th we will have another opportunity to underline this. I hope that some politicians will be there and explain what is important to slow down climate change meet Green Deal targets and not to simply wipe the problem out of sight to China. I'm just going to take a guess and bet that the absolute majority will prevail over a stubborn minority with brains.
But the picture is beautiful!
