Strategically important metals - Science and Technology Committee Contents

Supplementary evidence from Minor Metals Trade Association (MMTA) (SIM 20a)

Q. What legislation is it that means you must pay £70,000 for a letter of acceptance to import Titanium?

The EU Chemical Directive (dubbed REACH—Registration, Evaluation and Authorisation of Chemicals) is a pernicious law that came into existence over the last few years.

It is a cradle to grave directive governing the import into the EU of all substances (with a very few strange exceptions, such as oil, coal and uranium—powerbase too big perhaps?). Pure elements, compounds, alloys have been swept into this law.

In my own case, as a small British family company, founded in 1953, with net worth £2 million, the cost of full registration of all the elements that we have hitherto been occupied with would cost as much as the net worth of our company.

The way the law works is that for certain elements/substances which are thought not to require the later stages of evaluation and authorisation, a lead registrant must undertake, as per a consortia, to carry out certain tests on that element—mutagenicity, aquatic toxicity, carcinogenicity etc…in the example I have given of Titanium, there is a consortium of interested parties (consumers, producers etc) who will have come together to institute these tests.

These tests run into hundreds of thousands of pounds and the consortia recoups its money from others, like ourselves, who later wish to trade the metal but are not so strongly funded as to be in the consortia. In our case, we then obtain the right to trade the element via what is called a "Letter of Access". This price is set at a figure which relates to the overall cost of the registration, evaluation or otherwise of that element, divided proportionately by the numbers of those who wish to have access. We just asked for the cost of this LOA and it was estimated at £70,000.

I gave Titanium as an example as it is a common element needed in wide areas of UK and European industry. We trade over 20 different substances per year.

The effect of these punitive costs, apart from the reduction of the market and tendency to create monopolies (because the number of small firms like ours will be reduced) is to deter use of the metal and free availability of it in the market place, driving up costs in UK and Europe and making us (yet again) less competitive with China and other parts of the world who do not have the same standards.

All would be fine if any of us believed that the EU Chemical Directive would serve the purpose to which it was intended—ie protect EU Citizens lives from the inadvertent contact with harmful effects of substances.

In practice the law is just a pernicious and draconian tax, with lawyers, accountants and laboratories earning very large sums to the detriment of innovation in Europe.

When I said that I felt that this law heralded a dark age in Europe, I meant what I said. It has been the main driver in the last five to 10 years deterring investment in manufacturing and scientific use of substances in Europe.

Anything at all that could be done to mitigate or roll back this law would be in the best interests of the UK.

There is much more to be said here—about, for example, the way testing is carried out on animals quite unnecessarily because the tests themselves on some elements are 4th form science—but the law also dictates that previous knowledge on elements and substances may not be used and only new tests according to good lab practice as determined also by EU should be used.

Let me give you just one example—in the case of Rhenium, its toxicity was tested on rats in 1934, nine years after this element was first discovered and separated. This information was deemed invalid and new costly tests now have to be carried out. Translate this across to the millions (truly millions) of substances and you can see why they are building tower-blocks in Brussels to house the bureaucrats needed to implement this law.

I was one of those who represented our industry in Strasbourg at the time the law was in process and no one wanted to hear our case and this law went through on a show of hands.

I have written this in haste at the start of my trading day. But it is very kind of you and your committee to be asking the right questions!

Anthony Lipmann
Minor Metals Trade Association

17 February 2011

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Prepared 17 May 2011