REACH hits southern climes

By Anna McLauchlin

Date: 09/06/05

The inclusion of mineral and ore imports in EU chemicals legislation REACH will raise costs for exporters and could even damage third world communities, Australia and South Africa have warned.

Under the proposed REACH legislation, importers of metals and alloys would have to know the properties of all the substances being imported, but third countries warn that it is likely to fall to the exporter to provide the necessary information and therefore incur the extra cost.

The South African ambassador to the EU, Jerry Matjila, told European Voice that many mines are part-owned by the government, which means that increased costs will see the government struggling to fund their social programmes.

He also fears that REACH could worsen unemployment figures, which in some regions of South Africa is as high as 40%. Mining exports account for more than 16% of gross domestic product (GDP) in South Africa and the industry directly employs 1.3m people.

"Many South African companies will not have the capacity to deal with REACH," he said. "We are already dealing with a lot of instability and any activity like REACH will make things worse."

Matjila argues that the Commission should carry out further impact assessments to see how the legislation would affect vulnerable areas of the world, saying that the executive needs to be aware of the "unintentional consequences" of its plans.

Mzolisi Diliza, CEO of the Chamber of Mines of South Africa, thinks that the added uncertainty of how REACH would affect the mining industry could lead to investors pulling out of the country.

"Business doesn't like uncertainty and will use other options to mitigate risk", he says.

Peter Gray, Australian ambassador to the EU, said that the Commission had "seriously underestimated" the impact of REACH on the mining industry.

According to a study released by the Australian Bureau of Agriculture and Resource Economics, Australian exports of zinc could drop by as much as 16% in the next five years and nickel and lead exports could drop by 11.8% and 6% respectively.

Australian exports of these products are worth €500 million per year and 96% of its nickel is exported to the EU (24% of its lead and 21% of zinc).

"Nickel and iron ore have been around for decades and exports are already covered by health and safety policies."

A Commission official said impurities found in mined minerals and metals, such as cadmium and arsenic, mean that exports must be tested.

"The inherent properties of substances is what's important here," he said. "REACH already exempts minerals and ores if they do not meet the danger criteria."

He said that the Commission was sympathetic to the importance of mining to African countries and added that clarifications on how to apply the legislation would solve "some of the problems" such as having to examine every single shipload for different impurities.

But Australia, he said, had "exaggerated" the impact of REACH on its economy.

Australia and South Africa warned that the inclusion of mineral and ore imports in the EU chemicals legislation (REACH) would raise costs for exporters and could even damage third world communities. Under the proposed REACH legislation, importers of metals and alloys would have to know the properties of all the substances being imported, but third countries warn that it was likely to fall to the exporter to provide the necessary information and therefore incur the extra cost.