* Countries offer large labour pools, good ore prospects,low risk
* EU policy initiatives encourage raw materials independence
* EU initiatives to revive steel, aluminium industries
By Susan Thomas
LONDON, July 4 (Reuters) - A gradual shift in Europeanattitudes and policy toward mining in the past four years,spurred by the need to create jobs and to ensure supply ofcritical materials, has led to investment and a nascent revivalof the industry.
New or resurrected mining and smelting projects in someareas of Europe are providing some prospects for growth in theregion as countries struggle with recession and cripplingunemployment.
A handful of countries, including hard-hit Spain andPortugal, are attracting investment with good grades of ore, alarge labour pool, revamped mining regulations and low politicalrisk.
"Spain has gone from being shy of mining to being welcomingof mining. The political landscape has turned 180 degrees," saidEMED Mining Chief Executive Harry Anagnostaras-Adams,whose London-listed company plans to reopen a former Rio Tinto copper mine near Seville.
"There has been a marked transformation between when wearrived six years ago, when mining was not conventionallyregarded as a favourite industry, to today when it overshadowsmost other initiatives in the area."
Redevelopment of the mine, which is likely to begin nextyear and last 12 months, will directly employ 1,000 people onthe site in a region where around 50 percent of the populationis unemployed.
At EU level, new broad policy initiatives on raw materialshave been adopted to boost employment and make the bloc lessdependent on imports of vital raw materials.
The EU is the world's largest or second-largest producer ofsome industrial minerals, including feldspar - used in glass andceramics - and construction mineral gypsum.
It remains an importer of most others including copper, zincand tin. Its domestic production of metallic minerals is limitedto about 3 percent of world output.
Leading emerging market producers of minerals in Africa andAsia, meanwhile, are increasingly adopting strategies designedto protect their resources for future development and fordomestic markets.
"Growing resource nationalism in many parts of world makesEurope more attractive from a political risk point of view," RawMaterials Group analyst Magnus Ericsson said.
"There's also a slow but steady process of re-formulating EUpolicy and making it more positive towards mining in Europe tosecure supply of metals. There are a number of exploration andinvestment projects that might come on stream in the next fourto five years."
More work needs to be done to simplify and streamlinebureaucracy and policy in the European Union and its membercountries, however, to bring on a full mining revival,executives say.
"The EU is trying to stimulate mining and reduce thedependency of imported raw materials ... but at the same timesome of the EU regulators make it much more difficult to operatein Europe," Lundin Mining Chief Executive PaulConibear.
He cited environmental policies, a potential ban on usingcertain chemicals common in mining, and restrictions ontransport of certain materials as difficulties.
"When a (full) mining revival comes, we would say thatattractive fiscal regimes, low risk and stable jurisdictionswill be a driving force," he said.
NEW POLICIES, NEW INVESTMENTS
Among the changes so far, Portugal has partly overhauled itslabour code, which in the past was punitive for companies suchas miners that must operate 24 hours a day, seven days a week tobe viable, Conibear said.
Sweden has lowered its corporate income tax from 26 percentto 22.5 percent to attract heavy industry investment such asmining, he said.
"That is an excellent move that should bring in far moreaggregate economic stimulation than the reduction in federal taxrevenue," Conibear said.
Lundin produces copper, zinc, lead and nickel fromoperations in Portugal, Sweden and Spain. It is currentlyexpanding its Portuguese and Swedish mines and is activelylooking for new base metals assets in eastern Europe, he said.
Rio Tinto has invested nearly 80 million euros in itsDunkirk aluminium plant in France in the past 18 months andplans to invest at least that much again over the next fiveyears to improve its energy saving and efficiency.
Trafigura, the world's third-largest trader inraw materials, plans to plough over 300 million euros into anewly acquired copper, zinc and lead mine in Spain.
Trader Glencore has reopened its Portovesme leadsmelter in Sardinia.
Finland has attracted more new mineral discoveries andmine projects than other parts of Europe as a result offavourable mining legislation and an attractive tax regime.
Certain ex-communist Central and Eastern European countriesare also trying to revive their mining sectors, but with varyingdegrees of success, Conibear said.
Slovakia has substantial untapped industrial metals and coalreserves, EMED's Anagnostaras-Adams said. "Their regulationsneed to be updated, they are quite outmoded. But the intent isthere."
Last month, the European Commission announced an array ofrecommendations to revive the steel industry, which has beenhurt by tumbling demand and high energy costs relative to rivalsin the Middle East and United States.
The "EU steel action plan" is the first comprehensiveattempt by the Commission to stem a decline in the steel sectorsince the Davignon Plan sought to tackle an industry slump inthe mid-1970s. A similar plan is in the works for the aluminiumindustry.
