Mineral and mining industry in Southeast Europe

EnergyIndustrySouth-East European INDUSTRIAL Мarket - issue 4/2017

The mining industry in Europe has a rich, longstanding, and at some points varied history. While it is currently held in low regard for largely fallacious reasons and thus faces many challenges, its actual spread and diversity surprise.

In terms of GDP, Europe’s mining industry accounts for a small share, but it provides a significant share of the global production of many products. It does also stand favourable comparison with that of the USA. It is relatively weak in many metallic products and has a strong industrial minerals bias, however.

Some features of the industry stem from its very long history, including a legacy of state ownership and incipient protectionism, as well as complex land ownership and mineral rights. Exploration spending is relatively low, but Europe does have many prospectively good projects, even in metals. The main observed obstacles are in the area of planning controls and environmental regulation, which are global rather than specifically European issues.

This issue of South South-East European INDUSTRIAL Market Magazine previews the geological situation of the south-eastern European countries, as well as their respective mineral and mining industries within recent years. The information has been gathered from readily available market reports and various government studies.

As a comparatively small, mountainous country within the Western Balkans that has 362 kilometers (km) of coastline on the Adriatic Sea, Albania has considerable extractable mineral deposits of chromium, coal, copper, iron, nickel, and petroleum, along with potential offshore hydrocarbon and hydroelectric power resources.

Albania additionally produces cement, clay, ferrochromium, gypsum, limestone, silica sand, and steel. The country is not a major producer of mineral commodities on a world scale, with the exception of chromium, that accounted for about 2,5% of world production, but within its own economy the exploration, extraction, and processing of mineral ores brought about a considerable and growing part. For example in 2014, mineral processing activity continued to expand, albeit at a subdued rate, and was primarily supported by foreign direct investment.

The value of the country’s mineral exports diminished due to the recession in the economies of its leading trade partners within the euro area.
Albania officially became a European Union (EU) candidate state in June 2014, following a 20-year economic and political transition to a free market democracy.

Although membership negotiations with the European Commission weren’t launched yet, the pre-accession alignment process additionally pushed the country’s efforts to harmonize its laws, including those for the mineral sector, with the EU body of law, particularly regarding mineral concessions and hydrocarbon tenders.

The Government offered concessions in order to increase the production and processing of chromium, copper, and nickel, and to begin with production of basalt, bituminous sands, decorative stones, and olivinite. During that period many mining permits were cancelled following an audit of mineral exploration and extraction companies.

Bosnia and Herzegovina
Bosnia and Herzegovina is a mountainous, largely landlocked country on the western Balkan Peninsula. The country borders other former Yugoslavian republics such as Serbia, Croatia, Montenegro, and has a very narrow strip of land on the Adriatic Sea.

Much of the territory consists of karst limestone. No matter its relatively small size, Bosnia and Herzegovina has substantial mineral resources; the most significant among these are copper, iron ore, bauxite, lead, lignite, and zinc. The country also has significant hydropower and coal-powered thermal energy potential and prospective petroleum and natural gas resources - it is one of the very few exporters of electrical energy among the Balkan countries.

As for the metal-processing sector, for the country it includes both ferrous and nonferrous metals as the most valuable segment of Bosnia and Herzegovina’s mineral industry. The sector is the largest exporter of goods by value which has registered a substantial increase in production in recent years.

The main mineral outputs of Bosnia and Herzegovina’s metal-processing sector are alumina, aluminum, iron, lead, steel, and zinc. The mineral extraction sector is generally dominated by the mine output of bauxite, coal, copper, iron ore, lead, and zinc. Mineral fuels produced in the country are coke, lignite, and subbituminous coal, with coal accounting for most of the domestic energy production. Mineral output also included barite, dimension stone, limestone, salt, and sand and gravel.

For its relatively small size, Bulgaria has very diverse geology. The tectonic settle of the country is presented mainly of four first-order tectonic units and many second and third-order units. The main raw materials which are mined in Bulgaria include lignite coal, lead and zinc, copper and polymetal ores, gypsum, limestones, bentonite, kaolin, quartz sands, fire-clays, marbles. The biggest open basin in the Balkan Peninsula for lignite coal is situated in Bulgaria’s East Sredna Gora mountain.

The mining industry of the country makes up about 5% of the total GDP and provides direct employment to approximately 30 000 people, and through related industries to about 120 000. A total of 23 million tones of natural resources are registered in the country, as well as
industrial deposits of 55 minerals and rocks for industrial production.

The most important country resources are its deposits of rock-salt, kaolin-containing sands, quartz sands, barite, gypsum and limestones for the production of faience. An essential share belongs also to the clay deposits (fireproof, bentonite and ordinary ones), dolomites, limestones for the chemical industry, quartzite, perlite, fluorite. Prospecting for vermiculite, graphite and others has been carried out in the recent years.

Greece is a EU country with a significant mineral resources background in terms of quality, quantity and variety of ores, minerals and aggregates. The Greek mining and metallurgical industry constitutes an important sector of the economic activity of the country as it supplies essential raw materials for primary industries and various downstream users.

Although the sector’s significance to the economy has been declining for the past 20 years, it still contributes for about 2% of the GDP with the inclusion of interrelated enterprises such as quarrying, concrete, processing and production of intermediate and final products. There is a certain opportunity for further development and flourishment as long as current obstacles of the latest economic crisis are overcome and new investments are attracted.

The mining/metallurgical sector in Greece covers a wide range of mineral commodities and comprises four major sub-sectors, namely: metallic minerals (bauxite-alumina-aluminium, nickel, lead-zinc, gold, copper, huntite/hydromagnesite etc.); industrial minerals (bentonite, perlite, magnesite and magnesium compounds, pumice, pozzolan, gypsum, attapulgite, amphibolites, olivenite, calcium carbonates, industrial clays etc.); marbles and ornament stones; energy minerals (lignite); geothermy and hydrocarbons (upstream process).

Greece does not produce certain high-tech metals such as lithium, titanium, tantalum, platinum, and rare earth metals like neodymium, dysprosium, etc., but it is an important producer of basic metals and industrial minerals, some of them with international credentials.

Exporters of primary source and processed materials hold leading positions in the European and international markets in products such as bauxite, alumina, aluminum, nickel, caustic magnesia, bentonite, perlite, pumice stone and marbles. For example, Greece is the only country in the world capable of producing huntite, the leading producer of perlite, the second producer of pumice and bentonite and as well as the first magnesite export country in the EU.

The exploitation of the country’s mineral wealth significantly contributes to the regional development because the mining industry is mainly active in peripheral regions, employs a considerable number of workers from the local communities and develops a variety of other jobs supporting the productive work of mining.

Kosovo is a relatively young, landlocked country in the central Balkans that borders Albania, Macedonia, Montenegro, and Serbia. It is small in size yet has substantial mineral resources of cobalt, nickel, lead, lignite, silver, and zinc. Kosovo’s territory is geologically composed of various sedimentary, magmatic, and metamorphic formations that contain deposits of aggregates and construction materials, bauxite, chromium, lead, magnesite, nickel, silver, and zinc.

In addition to that, the country also has substantial hydropower and wind energy potential. The eastern Vardari Zone in the north forms the most important mineral zone and hosts the Trepca lead, silver, and zinc mines, which provided the majority of mineral production in the former Yugoslavia until its disintegration in 1990.

Kosovo’s mineral output is generally small by regional and world standards. The shares of mining and quarrying and manufacturing sectors in the country’s gross domestic product (GDP) continued to be significantly below their past levels in the 1980s as a result of the deindustrialization and the accompanying loss of capacity that began in 1990 owing to political instability and the consequent armed conflict between ethnic Albanians and Serbs.

Mineral commodity production increased significantly, from a relatively low base, in the years following Kosovo’s declaration of independence in 2008. Mines and production facilities for cement, ferronickel, and steel plants, and marble quarries received foreign direct investment (FDI) from European countries and Israel.

Macedonia is a small, landlocked, and primarily mountainous country that borders Albania, Bulgaria, Greece, Kosovo, and Serbia. Macedonia is endowed with various mineral resources, including many metals (antimony, arsenic, chromium, copper ore, gold, iron ore, lead, manganese, nickel, silver, and zinc); industrial minerals (clays, including bentonite and kaolin, feldspar and mica as by-products, gypsum, limestone, marble, sand and gravel, silica sand, talc, titanium, and volcanic materials); and mineral fuels and related materials (lignite, rare earths, and uranium).

Recent studies revealed that the mineral industry of the country has registered a product growth in non-metallic mineral production. In general, mining has been developing for the last ten years, and projects such as the modernization and rehabilitation of the Bitola and the Oslomej thermal powerplants, the expansion plans at the Suvodol project, and plans to develop the Mariovo and the Zivojno deposits are carried out with the purpose of strengthening the lignite mining industry in the short run.

Montenegro is a European Union (EU) candidate located in the western Balkan Peninsula. It borders Albania, Bosnia and Herzegovina, Kosovo, and Serbia. The country produced a limited number of mineral commodities, none of which was regionally or globally significant, but it has the potential to become a regionally important coal and hydrocarbon producer.

Montenegro’s mineral industry includes the mining and processing of bauxite, industrial minerals, and lignite coal. Metal production includes alumina refining, primary aluminum smelting, and steelmaking. The country’s mineral industry underwent a recovery in 2014 after its largest mineral company and sole aluminum producer, Kombinat Aluminijuma Podgorica (KAP), resumed production and its leading bauxite producer, Rudnici Boksita, increased its output. Iron and steel production continued to increase as Montenegro’s primary iron and steel company Toscelik Niksic continued its plant modernization program.

Montenegro’s first tender for offshore hydrocarbon exploration and extraction received bids from foreign companies for all blocks that were offered for concession in the country’s Exclusive Economic Zone (EEZ) in the Adriatic Sea.

Romania’s key natural resources include natural gas, iron ore, petroleum and coal. As a member of the European Union, the country saw improvement in its mining activities for lead, zinc, iron ore and copper.

The membership boosted the mineral industry’s access to European markets and made way for the development of trade and investment opportunities.

Currently, Romania ranks tenth in the world in terms of the diversity of minerals produced in the country with around 60 different minerals being produced. The richest mineral deposits in the country are halite (sodium chloride). Romania is also an oil producer, but the level of production is not enough to make the country self-sufficient.

According to the CIA World Factbook, other natural resources of Romania include coal, iron ore, copper, chromium, uranium, antimony, mercury, gold, barite, borate, celestine (strontium), emery, feldspar, limestone, magnesite, marble, perlite, pumice, pyrites (sulfur), clay, arable land, hydropower.

The Rosia Montana area includes the largest gold deposit in continental Europe, estimated at over 300 tons of gold and 1600 tons of silver, having a value of USD 3 billion. So far, Romania’s mineral production has been adequate to supply its manufacturing output, with energy needs also being met by importing bituminous and anthracite coal and crude petroleum.

Serbia is a landlocked nation located in south-eastern Europe on a total area of is 77 474 sq. km. It has a population of approximately 7 million as of 2016. Serbia’s mining sector is small scale and yet to be developed owing to the country’s political situations. The mineral resources were formed by complex processes of metallogenic development and in various geological epochs (Pre-Baikalian to Alpine).

The most important group of metallic mineral resources of Serbia includes Cu, Pb-Zn, Au, Ag, Sn, Mn, U, Mo, Ti, W, Co, Sb and Fe ores. The important group of industrial mineral resources include: bentonite, boron minerals, refractory clay, gypsum and anhydrite, diatomite, dolomite, zeolite, kaoline, quartz sand, cement marl, ceramic clay, limestone, magnesite, phosphates, chrysotile-asbestos, building industry granulates (natural and crushed) and decorative stone.

Serbia also has significant resources of fossil fuels, particularly coal and oil shale. The soft brown coal (lignite) is of great economic importance since it represents the main source for the production of electric energy.

Despite the mineral production of the country being meager, the Serbian government is working towards providing a proper legal framework to ensure a secure environment for investors keen on exploration and mining activities.

Slovenia is positioned where the Alps meet the Pannonian Basin, Dinarides and Adria Foreland. In this area, with the exception of the Alps, coal was excavated at many sites of various sizes, from small local pits to a number of large collieries in which yearly production yielded tens to hundreds of thousands of tons of coal.

The Slovenian coal deposits can be differentiated into paralic (sea-shore) and intermountain (mostly lacustrine-fluvial) coal deposits. The first type usually consists of up to 2,5 m thick coal seams in cyclically interchanging sequences of freshwater and brackish sediments, while the second type usually consists of a small number of seams or even of only one thick coal seam. The Slovenian coal is mostly humic, only exceptionally sapropelic. Both types of coal deposits - paralic and intermountain developed in low-lying topogeneous marshes. Hence, they are mostly moderate to ash-rich and contain mostly 1-3% sulphur.

Only one coal mine is still in operation today in Slovenia - the Velenje Lignite Mine - with a production of 3,2 Mt in 2015, which is entirely consumed by the nearby Sostanj Thermal Power Plant.

Nevertheless, Slovenia has considerable deposits of mineral raw materials. While all metal mines are currently out of operation, the extraction of construction and industrial minerals, such as aggregates, clays, dimension stone, and some energy raw material deposits, i. e. coal and hydrocarbons, remain active.

Turkey is an emerging market economy and a European Union (EU) candidate country that is strategically located in both south-eastern Europe and south-western Asia. Turkey’s mineral sector has increased its output and exports significantly since 2002 and has been attracting higher levels of foreign direct investment (FDI) for the last several years. But many of the mineral resources of the country remain undeveloped, particularly those of copper, gold, lead, nickel, silver, and zinc, and particularly those located in eastern Turkey.

Although not resource rich in mineral fuels except for coal, Turkey has become a key energy transit corridor for multiple operational and planned hydrocarbon pipelines between the energy-rich countries of the Caspian Basin and the Middle East, and the energy-consuming countries of the EU owing to its unique geographic location between Europe and Asia.

The country’s rich mineral industry produces more than 50 mineral commodities from about 4500 known mineral deposits, including metals and industrial minerals. In 2014, Turkey was the world’s leading producer of boron minerals (accounting for 70% of world production), perlite (40%), and pumice and pumicite (31%).

It was also the world’s second producer of feldspar (23% of world production) after Italy, and of magnesium compounds (9%) after China; the fourth-ranked producer of chromium (10%) and cement (2%); the fifth-ranked producer of bentonite (4%); the eighth-ranked producer of barite (3%) and crude steel (2%); and the ninth-ranked producer of kaolin (4%). Turkey is a top producer of cement and gold for Europe, as well as second-ranked producer of steel after Germany.

The country was also the leading exporter of boron, marble, and travertine in the world. Turkey is also a significant source of value-added metals and industrial mineral commodities, such as cement and steel, accounting for 2% of world production of both commodities.

Source: USGS Mineral Resources Program