Competence center for mining & mineral resources

Figure 1: Production of Domestic Raw Materials by Value in 2016 (Source: BGR)

Domestic Raw Materials Production & Raw Materials Imports

Germany is one of the leading industrial nations in the world and a large-scale user of raw materials. The majority of bulk materials such as sand, gravel, silica, bentonite, clay and gypsum are produced domestically. However, the required metals and selected industrial minerals as well as raw materials for energy production, except for lignite, have to be imported. Especially with respect to metals needed for the manufacturing of advanced technologies, Germany is highly dependent on imports and on a stable and reliable supply with raw materials such as Rare Earth, Tungsten, Tantalum, Indium, Germanium, which are crucial ingredients in many of today’s high-tech manufacturing processes.

China is a very important supplier of technology metals to Germany. However, it is worth mentioning that Canada also produces and supplies a broad range of metals German industry needs. Hence, Canada offers great potential for increasing the long-term resource supply security for Germany’s manufacturing sector by offering opportunities to diversify supply sources on the part of German industry. To date, main imports from Canada by value included Iron ore, Nickel, Copper, Aluminum, Silicon, Coal, Cobalt, Molybdenum, Ferro-Niobium. Canada also accounted for more than 20 % of German imports in Tellurium metal, Selenium metal, Titanium ore and concentrate, as well as Tungsten powder.

The most important raw materials by value produced in Germany are lignite (Braunkohle) with a value of 2,33 billion € in 2016, Potash (Kalisalz) with a value of 1,65 billion €, sand and gravel (Sand und Kies) with a value of 1,58 billion €, and crushed rock (gebrochene Natursteine) with a value of 1,5 billion € in 2016 (see figure 1).The production of hard coal has been declining for several years and is set to end by the year 2018. Germany is therefore focusing on the development of and the investment in renewable energy. Natural gas contributes about 21% (of which 7% are produced in Germany) to national gas consumption and is an important factor in national energy security. Potash and salt production are significant contributors to German industry in terms of value and represent important export commodities for the international chemical and fertilizer industries (see figure 1).

In 2016, Germany imported raw materials totalling a value of 91,4 billion € (including energy raw materials, non-metals and metals: ore, concentrates, and alloys). Compared to 2015, this represents a decrease by 15,5 billion € (14,5 %), which resulted from lower raw material prices, especially with respect to energy raw materials. In addition, Germany imported value added raw materials equaling 45,4 billion €, bringing the total combined imports of metallic, non-metallic, and energy resources to 136,8 billion € in 2016.

Figure 2 shows the high dependence on imports for metals and energy.

Figure 3: Germany’s Trade Balance for Raw Materials in 2016 (Source: BGR)

It is therefore not surprising that the overall trade balance for raw materials is negative, especially with respect to energy resources. However, it is worth noticing that for metallic raw materials, the picture is a more balanced one because of the value-added manufacturing and production taking place in Germany. Whereas ore, concentrate and refined products are imported, value-added metal products as well as scrap metals are being exported. With respect to gravel, sand, and rock, Germany’s exports outweigh the imports and the trade balance is positive (see figure 3).

Main commodities mined in Germany

Main advantages of Germany as a mining location are the reliability and stability of existing mining regulations, stable political conditions, reliable business relations, excellent infrastructure, proximity to customers, a qualified workforce and skilled engineers, as well as the availability of reliable and innovative technology.

Hard Coal production has a very long tradition in Germany. Hard coal deposits are predominantly located in the Ruhr area where coal outcrops. The coal-bearing strata descend very quickly and reach a depth of 2,000 m in the area of the city of Münster. Under the North Sea, the coal seams are already 5,000 m deep. The average depth of German mines today is 1,250 m, with the deepest going down to 1,600 m. Exploitation of hard coal is exclusively done through long wall mining. Typical long wall dimensions are more than 300 m in long wall width, and the individual panels achieve lengths of up to 3,000 m. Panel length is often limited by ventilation and air conditioning issues. The seam thickness varies between 1 and 3.5 m and determines the extraction equipment to be used. In thin seams, ploughs are applied whereas in thicker seams shearer loader operation is the rule. Plough operation in particular is fully automated.

Lignite mining takes place in four locations within Germany. The largest is the Rhenish mining area where just under 100Mt lignite is mined each year. In the eastern part of Germany is the Lusatian area where about 63.6Mt of lignite is mined annually. In addition, some smaller operations are located in central Germany. In the Lusatian lignite mining area, the deposit is much shallower at only 80 to 100 m and this allows the application of a totally different technology. The rule is to use a bucket-conveyor excavator in combination with the so-called overburden conveyor bridge, which is possible only because the distance between the mining and the filling bench is within the range of 60 to 80 m.

Potash is used as fertilizer by the agricultural industry. K+S is the only German producer mining and producing potash products at seven different locations. Production has been stable for a decade and lies at around 3Mt per year. In international comparison, the German producer K+S ranks fifth after the predominant Russian and Canadian producers. K+S is currently developing a Greenfield potash solution mine in Canada called “Legacy Project”.

By numbers, the aggregates, sand and gravel industry is the biggest section of the mining industry in Germany. In contrast to other mining activities a lot of small and medium sized companies are active in this industry section. Hence, the number of gravel and sand mining sites amount to more than 2,200 quarries with a total annually production of nearly 500Mt. The industry has a turnover of 3.2 billion € and employs about 27,000 people. The variety of minerals produced in Germany is tremendous and it covers hard rock like granite, basalt, quartzite, diabase, limestone and dolomite, sandstone, tuff, clay, bentonite, kaolin, feldspar, quartz sand, gypsum, gravel and sand. The following figure 4 gives a summary of the construction minerals sector in Germany.

Main advantages in the German mining industry are the reliability of mining procedures, the secureness of mineral supplies, the qualified workforce and skilled engineers, the excellent infrastructure, stabile political conditions, the proximity to the customers, sound and inspiring business relations.

Figure 5: International Ranking of Germanys Mineral Production (Source: World Mining Data 2015)

German Mining Industry in International Comparison

According to the Austrian world mining data, Germany ranks first worldwide in lignite mining. Germany also ranks fourth in the production of salt and fertilizer products and is one of the leading world exporters in this segment. The international ranking of important minerals produced in German is shown in figure 5.

However, with a total of 15 billion € per year the value of overall production appears comparatively low. This is due to the fact that the majority of production (by volume) stems from inexpensive gravel and sand production while the more expensive metal products have to be imported.

In 2014, minerals with a total value of 123 billion €, equaling 63% of all minerals consumed by the German manufacturing sector, were imported. Consequently, Germany has an overall negative import-export balance for resources. Figure 6 shows that Germany can only supply limited resources domestically and indicates its strong dependency on imports of metal ores and concentrates.

Figure 7: The biggest exporters of mining equipment worldwide (Source: VDMA)

German Mining Equipment and Technology

Germany is the third largest exporter of mining equipment worldwide after the Unites States of America and China (see figure 7). Through innovation and continued investment in research and development, German equipment and service providers are able to cater to the needs of today’s miners worldwide by providing client- and deposit-specific equipment that is high quality, safe, reliable, and cost-effective.

German expertise in engineering is based on a historical dedication to innovation and an outstanding commitment to research and development. Many German mining supply and engineering companies have histories that date back to the 19th century and are still family-owned, which explains the long tradition of innovation and the deep understanding of the cyclical nature of the industry. A strong focus and a long tradition of R & D resulted in high-precision equipment known around the globe for its endurance and reliability.

R & D expenditures still make up 6.3% of the revenue of manufacturing companies. To ensure future competitiveness and improve mining safety, R& D needs to focus on the following key areas:

  • Improve energy efficiency
  • Improve understanding of rock mechanics
  • Develop automated transport systems (OP and UG)
  • Improve data transmission and control systems

The branch – The biggest exporters worldwide
Mining Equipment Export to VDMA partner Countries in millions of euros €

German mining equipment manufacturers cover all fields of mining technology: open pit, underground, processing, and conveying – at all stages of project development, from exploration to mining and mineral processing.

The mining equipment portfolio of German companies includes: underground mining equipment, crushing, pulverizing and screening machinery, portable drilling rigs and parts, portable crushing, screening, washing, and combination plants, drills, and other machinery and the same for all kind of surface mining equipment.

German mining technology is leading in low total life-cycle costs providing big advantages for the mining industry. German technology is known to increase efficiency, optimize operating costs, and improve safety in underground and surface operations as well as at the mill.

German mining equipment and technology is exported all over the world, with an export quota of over 90%. Over the last decade, the German mining equipment industry tripled its revenues from worldwide sales to 3.57 B€ in 2015.

Figure 8: Export of German Mining Equipment 2015 (Source: VDMA)

Key export markets for German mining equipment are the Mediterranean and Middle East (17% market share), Latin America (11% market share), Saudi Arabia (8% market share), China (8% market share) and USA (7% market share) (see figure 8). At the moment, Latin America is the fastest growing market for German suppliers.

Mining Equipment Export to Canada

Due to current market conditions, the inflow of new orders from Canada is still decreasing. However, exports to Canada have been rising the first Quarter of 2016, albeit from a low base level, totaling CAD$ 7.88Mio. For comparison, during the same period the total exports decreased by 20% to a total of CAD$ 736.68Mio.

The following graphic shows the most important mining equipment types exported to Canada, comparing 2015 and 2016. It is worth pointing out that exports to Canada are on a positive trend even though exports in general and order inflows are continuing to experience a low, leading to an expected 15% less in total turnover for 2016 for German mining equipment manufacturers.

The outlook is only moderately positive, mostly lead by the slow recovery of some metals and metal prices, such as gold, and the surge of prices in specialty metals such as lithium and cobalt due to increased demand from battery manufacturers. The mid and long term view is, however, positive, according to the German Engineering Federation (VDMA).

Figure 10: German Exports to Canada by type of equipment

The German mining equipment manufacturers are represented by the VDMA. VDMA is the German Engineering Federation, Europe’s largest industry federation with a sole focus on mechanical engineering and with 40 sub-associations for machinery. VDMA represents more than 3,100 European member companies and est. 1,003,000 employees (in Germany). The VDMA sub-association for Mining Equipment has 135 member companies with more than 12,400 employees. The overall production value of these member companies was 3.57 B EUR in 2015 with an export quota of 94%. Please download the Mining Equipment Supplement “Best of Germany” to learn more about German mining equipment suppliers.

Germany also hosts the world’s largest and probably most important trade fair for the building & mining industry – bauma. The trade fair bauma, which was established in 1954, presents a comprehensive international product range in the area of construction machinery, construction equipment, vehicles and mining machines. bauma is a hub for international business and an important venue for gathering information and establishing contacts. In 2016 more than 580.000 visitors came to Munich to see the 3423 exhibitors. For more information please visit the bauma website.