Category: Blog-en

7 good reasons for an SME to join a cluster

Due to their reduced size and frequent isolation, small and medium enterprises have inherent limitations regarding economies of scale and scope. In addition, SMEs usually lack the resources to develop their own innovation strategies, rapidly falling behind large enterprises with strong tools to remain competitive at global level. That is why clustering and networking have become fundamental actions to boost SMEs’ competitiveness.

Scarcity of resources has always been a remarkable handicap for SMEs. They are often unable to capture market opportunities that require large productions and regular supplies and have difficulties in achieving economies of scale in the purchase of inputs such as equipment, raw materials or finance. Moreover, small size also constitutes a significant barrier to relevant corporate functions such as training of the workforce, market intelligence and innovation. It can also prevent the achievement of specialised and effective internal division of labour, which is a source of cumulative improvements in productivity and innovation. Finally, because of their low profit margins, SMEs are often stuck in their routine, unable to introduce innovative improvements or to look beyond the own boundaries.

This is not to say that the contribution of SMEs to innovation should be underestimated. Indeed, SMEs have their own comparative advantages over large enterprises, for instance, their ability to respond quickly and effectively to changing environments. Most SMEs have simple systems and procedures, which allows flexibility, immediate feedback, short decision-making chains, better understanding and quicker response to customer needs than larger organizations[1].

In fact, SMEs are regarded as one of the main driving forces of economic development. They are crucial for sustained, long-term growth, dynamism and employment in their local regions. They generally employ the largest percentage of the workforce and are responsible for income generation opportunities. In many EU regions, the SME sector can be a strong pillar of support for regional and economic development since it provides a means for the mobilization of the region’s resources. For instance, in the EU raw materials and mining sector, 18.952 out of 19.237 (98,5%) enterprises are SMEs accounting for 35,5% of the people employed in the sector[2].

In this context, how SMEs can exploit their strengths while minimising their weaknesses?  Well, experts emphasise the value of clustering as a key strategy for SMEs to take advantage of synergy effects. Clustering allow them to enter into cooperative relations with other SMEs, large companies and related partner institutions. In this blog, we have summarised what we think are the main benefits of clustering for SMEs.

CREATE STRATEGIC PARTNERSHIPS

Apart from partnerships among companies across the value chain, clusters usually create strong linkages with local governments, policymakers, civil society and other relevant stakeholders. This gives SMEs the opportunity, otherwise uncommon, to have a voice at the institutional level in defence of their own specifics needs, or to get closer to main social demands, as it is the case in the mining sector and the social license to operate (SLO).

REACH HIGH LEVELS OF SPECIALISATION

Industrial clusters have the effect of enhancing organisational performance at value chain level, achieving a high degree of differentiation within firms. As a result, SMEs are likely to increase variety and diversify their products or services, enhancing profitability, learning and innovation. Clusters are responsible for channelling customised support services to specific groups of SMEs, promoting specialisation patterns that are more likely to boost economic prosperity[3].

OFFER A FAVOURABLE ECOSYSTEM FOR INNOVATION

It has been largely demonstrated that innovation is most likely to happen at the frontier between industries and disciplines. Innovation ecosystems grow in symbiosis, not in isolation. That is why partnering is an essential action to look beyond the own sector and seek inspiration from others. Through their collective actions, clusters offer plenty of opportunities for multidisciplinary discoveries and innovation. They usually host innovative companies that allow access to new knowledge and share of information. Due to the geographical proximity, communication between cluster members is strengthened and exchange and dissemination of new knowledge is intensified. In the last few years, industrial clusters have become privileged innovation systems due to their potential for collective learning at local level.

LOWER PRODUCTION AND TRANSACTION COSTS

Because members are able to reduce costs while improving the level of service to their customers, clusters facilitate lower production and transactional costs. Moreover, internal trust is likely to reduce fees among members, creating an atmosphere of cooperation and confidence.

ENHANCE COMPETENCES AND GENERATION OF COMPETITIVE ADVANTAGES

Encouraging learning and innovation leads to the development of sustainable competitive advantages. That is why many EU countries and regions have promoted the development of industrial clusters where SMEs can develop their competences and competitive advantages against global competitors by sharing resources, innovative capabilities and knowledge. In this context, the role of clusters lies in removing obstacles, lowering constraints and finding partnering and financing opportunities (both public and private) to develop new innovative projects among its members.

PROVIDE A POOL OF SUPPLIERS AND SPECIALISED LABOUR

Belonging to an industrial cluster means being in contact with a pool of suppliers of raw materials, equipment, finance, consulting and other specialised services. By doing so, companies are able to achieve economies of scale, for instance, in the purchase of inputs. In addition, clusters promote the geographical concentration of plenty of resources, including a pool of specialised labour. Indeed, clustering of enterprises engaged in a similar or related activity brings together easy access to a skilled workforce and cooperation with local universities or technical schools that can provide the professionals of the future.

ESTABLISH COOPERATIVE LINKAGES BETWEEN COMPANIES

Being the most obvious, the cooperative linkages established between companies is the one benefit SMEs should consider when thinking about joining a cluster. Proximity helps companies to enhance mutual learning and create innovative knowledge and profitable synergies. Here, the rule works that the sum of the components is of greater value than each individual company or institution. Clusters play a key role in creating both the informal exchanges and the organised interactions needed across value chains and industries to guarantee sustainable economic growth and prosperity. Through joint actions, clusters can definitely drive innovation and contribute to stimulate regional economic development.

All in all, most of the benefits of clustering for SMEs derives from clusters’ ability to concentrate economic activity in a particular location[4]. At the end of the day, geographical concentration of certain economic activities and resources is key, as it allows to gather suppliers, buyers and exporters, government institutions, business associations and providers of business services and agencies that support clustered enterprises in fields such as product development, technology, marketing information and production process improvement.  

Clusters are instrumental not only to promote competition and cooperation, but also to help small companies overcome the main challenges they face in an increasingly complex, globalised world. This is why we encourage clustering as an essential tool for SMEs to greatly benefit from being linked into national, regional and global networks of companies and value chains.  


[1] Strategy development by SMEs for competitiveness: A review. August 2008. Benchmarking An International Journal 15(5):525-547 DOI: 10.1108/14635770810903132.

[2] Eurostat, key size class indicators, mining and quarrying (NACE Section B), EU-28, 2016.

[3] European Cluster Policy –using clusters to support innovation in SMEs across European Macro-Regions. Dr Anna Sobczak, Policy Officer for clusters & emerging industries. Internal Market, Industry, Entrepreneurship and SMEs, European Commission.

[4] C. Mason, T. Castleman and C. Parker, Communities of enterprise: developing regional SMEs in the knowledge economy, Journal of Enterprise Information Management, vol. 21(6), pp. 571-584, 2008.

Note: The header image is a map showing the amazingly large number of EU clusters from different sectors and regions. Source: European Cluster Collaboration Platform.


Copper, a metal on the rise due to its powerful antimicrobial properties

The most recent studies show that the SARS-CoV-2 virus survives for days on plastic, glass or stainless steel surfaces, but disintegrates on copper surfaces in a few hours. This fact has not surprised materials experts, who have long known about the antimicrobial properties of this metal. Copper has demonstrated its antimicrobial power on numerous occasions. In 2015, experts proved its ability to destroy coronavirus 229E, a close relative to the one causing COVID-19 that led to common colds and pneumonia. While the virus survived up to five days in stainless steel and glass, copper had it killed in minutes.

This virus-killing power of copper was already known by our ancestors. There is prove of its use for the disinfection of wounds and water purification from more than 3000 years ago (it is mentioned, among other documents, in the Edwin Smith Papyrus). Egyptians, Phoenicians, Chinese, and other ancient civilizations knew these properties and made use of them to prevent diseases and infections.

Considering this, it comes as a bit of a surprise that stainless steel is so present in public spaces around the world and yet we do not find copper-impregnated surfaces so often, especially in frequently-touched surfaces in infrastructures such as hospitals and public transit systems.

Recent studies already show the effectiveness of using copper surfaces to reduce infections in health centers and hospitals. Michael G. Schmidt, Professor of Microbiology and Immunology from the Medical University of South Carolina, conducted a study for more than 3 years revealing a 58% infection reduction due to the use of copper surfaces compare to previously used surfaces made of plastic, wood or stainless steel.

Despite all the evidence, copper is not yet used in a standard way for this type of use in public and health spaces, partly due to funding limitations. Although its mechanical and durability properties are totally equivalent to those of stainless steel, copper is generally 25% more expensive, this difference being variable depending on the demand in global markets.

Another great advantage of copper is that its antimicrobial power does never wear off. Experts in this material have shown that its bactericidal activity on surfaces of more than 100 years old public spaces are still working, which is undoubtedly a strong argument in favour of its gradual introduction, especially in the planning of new infrastructures or renovation of longstanding ones.

But, where does the antimicrobial power of copper come from? Other transition metals such as gold and silver are antibacterial, but to a lesser extent. It is the electron configuration of copper, with a free electron in its outer orbital shell, that causes a high reactivity of this metal with any other element in touch with its surface. This property is also what makes copper an excellent electrical conductor, hence its extended use in electrical installations.

When a microbe lands on a copper surface, ions destroy the pathogen by preventing cell respiration, piercing the cell membrane or viral coating and creating free radicals that accelerate this destruction. And most importantly, these ions destroy DNA and RNA within the bacteria or virus, preventing subsequent drug-resistant mutations.

Although the use of copper as an antimicrobial is still very limited, the demand for this metal is constantly growing worldwide. In the last 25 years, this demand has doubled globally, which has a lot to do with its ability to be recycled without losing any of its properties. In the European Union alone, it is estimated that 41% of the copper demand is met through the recovery and recycling of manufacturing waste from the value chain and through products at the end of life.

In Spain, most of the copper national production comes from the Andalusian mines of the Iberian Pyrite Belt. They provide almost 100% of this production, mainly coming from Cobre las Cruces in Seville, one of the richest copper deposits in the world, Atalaya Riotinto Minera, with 197 million tons of mineral reserves and Minas Aguas Teñidas in Huelva.

There is evidence of very early human use of copper in several regions, not for nothing this metal designates the prehistoric period between the Neolithic and the Bronze Age. Given its superb properties and the challenges we are currently facing, it is quite certain to foresee an increased use of this metal in the near future.

Note: All images used in this post are Wikimedia Commons.


What is the cost of contaminated soils due to extractive activities?

It is estimated that the soils of approximately 2.5 million sites in the European Union are potentially contaminated and at least 14% of them require soil decontamination as a result of mining, industrial and urban activities. At the moment, only a small part of these sites have been remediated, leaving about 300,000 contaminated sites in need of remediation in the EU.

Although mining activities are important sources of soil contamination in some EU countries, metal industries are the most frequently reported to be important sources of contamination (representing 13% of total contaminated soils). Most frequent contaminants are mineral oils and heavy metals.

Contaminated sites don’t come without cost, both for the private sector and for public administrations. Clean-up of contaminated soils is a cost-intensive and technically complex procedure. According to data from the Superfund programme, US spends between 300 and 700$ million annually in soils remediation. In the EU, it is estimated that an average of 1€ per million euros of national GDP are spent on the management and remediation of contaminated sites, most of it coming from public budgets.

Directive 2006/21/EC regulates in the EU the management of waste from extractive industries in order to control major-accident hazards and to enable the production of the best available techniques (BAT) to manage mine sites whenever they are depleted, degraded or abandoned. This regulation calls for rehabilitation of these degraded areas, understanding rehabilitation as the proper treatment of the land affected in such a way as to restore the land to a satisfactory state, with particular regard to soil quality, wildlife, natural habitats, freshwater systems, landscape and appropriate beneficial uses.

The EU Directive affects an estimated area of 40,100 km2, corresponding to land currently impacted by active mining. If compared with other continental areas, contaminated soils in Europe are well below other regions, which may reflect the high degree of regulation and monitoring of mining operations in the EU and the general trend of reducing mining activities over the past decades.

Globally, the extent of land area impacted by mining and quarrying is debated, but recent estimates range between 300,000 and 800,000 km2. It’s a fact that mining is expanding in response to increasing societal demands for energy minerals, metals, and other construction and industrial minerals. Since the 1970s, extraction of metals has increased by more than 75%, non-metallic industrial minerals by 53% and construction materials by 106%. The main challenge ahead will be to resolve the inherent conflict between the growing impacts of increased demand for mineral resources essential for the energy transition and the need to protect and restore environmental goods and services.

Understanding the economics of contaminated land management is key to increase awareness and promote sustainable solutions. Annually, the loss of ecosystem services due to land degradation represents a reduction of 10-17% of global GDP. The stabilisation and restoration of contaminated soils typically require long-term efforts focused not only on local site conditions but also on adjacent waste-disposal sites, neighbouring areas affected by water pollution, distant areas affected by dust emissions and infrastructure (e.g. roads and railways).

Current EU initiatives for the development of new technologies and methods aim at removing or neutralising contaminants from the site so that the land can begin a non-mining, non-industrial activity while keeping alive the local economy and enhancing social acceptance and sustainability. In next posts, we will dig deeper into these remediation techniques.

Header image: Map of active metal and energy minerals mining sites. Source: SNL Metals & Mining Database, 2017.


Europe seeks new opportunities for sustainable mining projects

As political tensions grow globally, the concern of EU policymakers about the supply of certain raw materials essential for the European industry also increases. This concern has led to a renewed interest in starting new mining projects in European territory.

This is not an easy goal from the point of view of the social license to operate, that is, the acceptance of all social actors, specifically local communities, to carry out mining projects in their territories. Mining is still perceived as an outdated, polluting activity, which only takes place in remote parts of the planet and of which we practically never have positive news. This perception goes hand in hand with a fairly widespread lack of knowledge about the essential role that raw materials play not only in our day-to-day lives, but also in a sustainable and low-carbon emissions’ future.

The truth is that the EU is currently importing most of the raw materials we use, which maintains a constant trade deficit since 2002. In 2019 alone, that deficit amounted to € 31,000 million.

Although mining activities has growth exponentially in recent years around the globe, they have remained constant in Europe, or have even notably declined, as it is the case with coal and lignite mining. This implies that the EU now represents a much smaller part of the global mining industry than a few decades ago.

In this regard, the European mining industry claims that it does not operate on equal terms with respect to international competition. There is also great concern that many of the essential raw materials for Europe come from parts of the world that lack political and economic stability.

Given this situation, the EU is willing to commit to the best possible strategy: investing in innovation and high environmental standards as our main competitive advantages. The high costs of introducing innovative technologies and services in the sector will be offset by increased productivity and efficiency. In this sense, EU companies are at the forefront of innovation in the supply of raw materials.

Since the European Commission adopted the so-called Raw Materials Initiative in 2008, Europe has been better prepared to face the problem of access to raw materials. Only between 2018 and 2020, the Commission has secured more than € 1,000 million for research and innovation projects related to raw materials through the Horizon 2020 program, which gives an idea of the relevance that this topic has acquired for policymakers.

Another source of funding comes from the European Institute of Innovation and Technology (EIT), which has funded, since its foundation in 2015, innovation and educational projects on raw materials worth more than € 130 million and has raised external investments to support start -ups worth € 126 million.

The Commission’s support for raw materials and mining projects will be essential in the coming years. Currently, the focus is on collecting accurate information on the available mineral deposits in European territory, not necessarily to open new mines, but also to expand existing mines or operate them more efficiently.


Lithium as a strategic material for the energy transition in Europe

Lithium is the essential component of the batteries needed for electric mobility, for all types of electronic devices and for energy storage systems that will ensure a constant supply of energy from renewable sources.

These relevant applications make lithium one of the most strategic elements in the global economy of the coming years, being a key factor in the energy transition and the global objective of reducing greenhouse gas emissions.

Despite having 14 active projects in the exploration phase, the European Union has not yet started a stable lithium production, which generates a negative trade balance not only in the acquisition of lithium, but also in batteries trading. On the other hand, the European Commission aims to lead both the markets of electric vehicles and the energy transition, making our economy highly dependent on lithium imports.

In this context, the European Commission is taking measures to achieve a stable production of lithium ore and centralize the manufacture of batteries in European territory. Another series of measures are aimed at ensuring that batteries both manufactured and imported by the EU meet the highest environmental requirements, including the use of lithium from sustainable and environmentally friendly mining techniques.

In this regard, last December the Vice-President of the European Commission, Maroš Šefčovič, warned that the European Union will ban the commercialisation of batteries that do not meet the most stringent environmental standards in their manufacture. This includes the condition that the lithium extracted must come from a responsible source, respectful of the environment and the local communities.

In order to achieve this ambitious goal, the EC has just approved € 3.2 billion in grants for projects to be developed in European territory. Šefčovič estimates that this amount will attract another € 5,000 million in private investment. Only Germany aims to inject more than € 1 billion in various battery projects, followed closely by France with an investment of € 960 million.

Battery Alliance is currently defining the environmental standards for batteries. The batteries market could reach a market share equivalent to € 250 million in 2025 in the EU. This future list of environmental criteria will place particular emphasis on the sustainability of lithium extraction in European territory. There are currently up to 10 lithium mining projects that, if further developed, could lead the EU from 1 to 30% of the global lithium production in 2030.


Welcome to the blog of the Iberian Sustainable Mining Cluster!

Date: February 5, 2020

We would like to welcome you to this blog dedicated to sustainable mining in its broadest sense. We will address interesting issues from the technological perspective, reviewing the latest techniques, methods and innovations across the entire value chain, but also will open debates of a social, economic or political nature that are critical for the raw materials and the mining sectors.

The raw materials and mining value chains entail very complex aspects spanning regional, national and European regulations, access to land for exploration projects, the need for a skilled workforce, access to accurate geological data, appropriate technologies, funding, social acceptance, environmental degradation and many more. We will try to deal with all these topics and will seek contributions from experts to help us dig deeper into the key issues of European mining.

We also intend to use this blog to give voice to all the cluster members who want to participate with their contributions, interests or activities. It will be a free space to open debates, exchange views and propose new, innovative solutions for old political, technical or economic problems in the sector.

We hope you follow us closely and contribute with your ideas and comments, that will be very valuable to all of us. Your contributions are very welcome!


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