Interview Dr. Martin Wedig, FAB

Messe.TV in conversation with Dr. Martin Wedig from the Fachvereinigung Auslandsbergbau und internationale Rohstoffaktivitäten (FAB). The Managing Director of FAB explains to the presenter what functions and tasks the trade association performs. He shows what problems the market is facing and what solution strategies the FAB is using to respond to them.

International Mining Association at bauma 2016 in Munich

Messe TV: I am now fortunate enough to speak with Dr. Martin Wedig from the German Mining Association. First of all, you have to explain to me what the difference is between importing raw materials and mining abroad? Dr. Martin Wedig (Managing Director FAB): Well, the import of raw materials is of course basically about the demand for raw materials, the demand for raw materials in Germany is very high. In Germany, we currently have an import volume of 130 - 140 billion euros in imported raw materials alone. Raw materials are extracted through mining. Both at home and abroad. There are some raw materials that are no longer mined in Germany, but which are particularly important for our industry, especially metal ores. And these are then extracted abroad - in other words, raw material extraction abroad - which we also refer to as foreign mining. Messe TV: And why don't I just buy it, but mine it myself, why? Dr. Martin Wedig: So that I can get out of dependence on foreign producers and the raw materials markets are subject to a certain cycle, i.e. ups and downs in prices, which are sometimes very volatile for some raw materials. This means that we are experiencing times of extremely low prices, such as at the moment, but we are also experiencing times of extremely high prices and, especially in sensitive production such as we have in our processing companies in Germany, which are dependent on cheap raw material supplies, this naturally means extreme additional cost pressure, especially in the high price phase, and this cost pressure can be countered by building up your own raw material extraction assets. Messe TV: Where, for example - in which countries? Dr. Martin Wedig: Basically worldwide, but let's say, if you do a certain risk sensitivity analysis, you would of course always concentrate on where you have very good deposits and where you also find very good framework conditions, i.e. classic mining countries are Australia, North America, but increasingly also South America, what is being newly developed is Africa, for example, although we always have a problem with the infrastructure there, of course. And, of course, the large field of Asia, where there are also a large number of deposits and, on the other hand, the market players in Asia are also very dominant.

Messe TV: What is such a critical raw material where you have to be very afraid that it could become very expensive? Dr. Martin Wedig: The rare earth metals are of course critical, as they have been in the news several times. So this typical neodymium that I use for magnet construction and electric motor construction, for example, which is very rare in its deposits. The largest deposits are in China and there is even a market monopoly there, which adds an extra element. In other words, monopolistic pricing always leads to high prices in very specific phases and of course also to delivery delays and delivery difficulties, but there are also a whole range of other metals that we need for very specific properties in the metal industry, for example. Refining metals, molybdenum, there is tungsten which is needed, which is also not so common in nature and cannot usually be mined as a single ore, but is associated with other ores which are then extracted together and have to be extracted from the raw ore at great expense. Very complex processes, very expensive processes, which initially make the raw material rare for the market and can therefore make it incredibly expensive in times of high demand. Messe TV: At the moment, there's actually more of a mood to get out of mining in Germany and now you're telling me that people are starting up again abroad. Dr. Martin Wedig: Yes, that's exactly what we're currently seeing on the international market with major commodity players divesting their assets. So if someone is thinking about entering certain commodity classes internationally, now is exactly the right time to acquire assets there internationally. Messe TV: Which major companies have already convinced you? Dr. Martin Wedig: Oh, basically, we have several on the chemicals side, such as BASF or Lanxess. Lanxess, for example, is a major chromite producer and operates its own chromite mine in South Africa. We convinced ThyssenKrupp, which is an importer of raw materials on the metal ore side, but has also switched very strongly to the technology side. In other words, they also supply their own mining products. And we now have a whole series of raw materials traders who, because they have this problem, not so much on the sales side but much more on the purchasing side, to make themselves independent and basically get more security into their raw materials purchasing, then go down this path on the raw materials extraction side. Messe TV: Environmental protection and mining - that's an issue - it doesn't go together for me now, it makes my stomach ache, so I'd like to know from you now how you can reconcile the two. Dr. Martin Wedig: Basically, every raw materials project starts with environmental protection, it starts at the planning stage. In other words, we know in advance if we are going to mine an area, how we are going to do it, how we are going to do it as far as possible without any impact on the population. Messe TV: And do you apply the same strict approach abroad? Dr. Martin Wedig: Abroad, different laws apply in some cases, but we now have such an international mainstream that leads to this environmental mining, so you just have to imagine it over extended periods of time, mining is a long-term business, so we are usually always talking about a time horizon of around 20 years - so and that from development to implementation, so cradle - bare, It is of course also difficult to control and that is why we also advocate the framework conditions, the framework conditions should not only apply singularly here but also abroad and that is why, especially as far as developing and emerging countries are concerned, we advocate in various committees as a trade association that the framework conditions here are also promoted more strongly by the international community. Messe TV: Then I'll send my daughter over in 20 years and she'll check it out! Dr. Martin Wedig: You're welcome to do that! Of course! Messe TV: Thank you for the information and thank you for the interview!

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