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Article updated on 03/03/20 by Brett Smith
Hungary is located northwest of Romania in Central Europe. The total area of the country is 93,028 km2, and it has a population of 9.77 million as of 2019. The country has a temperate climate.
With the collapse of the communist rule in Hungary, the country had its first multiparty elections in 1990 which brought in a free market economy. It joined NATO in 1999 and was accepted into the EU five years later.
Hungary’s economy did suffer during the economic downturn of 2009, which brought about low domestic consumption and lesser exports. The nominal GDP of Hungary was $125.8 billion in2016, an increase of 2.2% from 2015.
The natural resources of Hungary are very limited and include coal, natural gas, perlite and bauxite. The country was determined to be the 6th highest producer of perlite in the world, comprising approximately 0.6% of international production. the production of coal has been significantly lower in recent years, while the production of crude petroleum has risen.
The mining sector of Hungary is small scale and does not play a significant role in the country’s economy. Currently, the labor market is seeing a transition towards a focus on high skill employment. This shift coincides with a change in the greater economy of Hungary; from mining and heavy industry, to value-added production that feeds into the global supply chain.
Overview of Resources
In 2016, the production of Hungary’s mining and quarrying sector reduced by 17.8% compared with the production in2015.
The mining sector’s output in 2016 is as follows:
- Pig iron decreased by 31%
- Raw steel decreased by 24%
- Bauxite increased by 113%
- Bentonite increased by 42%
Manganese decreased by 67%. The country’s only significant mineral resources are manganese, in the Bakony Mountains, and the undeveloped copper and zinc resources at Recsk.
The extraction of various metal-bearing ores increased significantly in postwar Hungary, but iron ore is no longer mined. Other minerals that are found include mercury, lead, uranium, perlite, molybdenum, diatomite, kaolin, bentonite, zeolite, and dolomite.
In 2010, Nostra Cement, a subsidiary of Strabag SE, planned to undertake the construction of a new cement plant at Kiralyegyhaza, which was slated to be finished in 2011. On completion, the new plant would have a production capacity of 750,000 Mt/yr of clinker.
The LafargeHolcim Kiralyegyhaza plant won the gold World Prix d’Excellence in 2017. It scooped the prize in the industrial buildings category for its outstanding environmental performance and the high architectural quality of the plant buildings. It employs around 130 people, and produces 1 million tons of cement per year.
In June 2012, the government of Hungary approved and entered into a joint venture with Australia-based Wildhorse Energy (WHE) to explore the possibility of resuming mining operations in the Mecsek Hills near the city of Pécs. WHE believes that this could become one of Europe’s largest uranium projects.
The MOL Group is a multinational gas and petroleum conglomeration headquartered in Budapest. The company's production of crude petroleum and petroleum products rose by nearly 16%, to more than 13,000 barrels per day, in 2016.
The company also generated approximately 4,100 cubic meters of natural gas per day in 2016, a year-over-year increase of 4.4%. In 2016, the MOL Group gained six new licenses, to double its allocated acreage for oil and gas exploration.
The Voice of Coal in Europe
The total amount of conventional energy resources in Hungary included 10.5 billion tons of coal, 2.4 billion cubic meters of natural gas and 24 billion tons of oil. Half of the total coal resources in Hungary comprise of lignite and brown coal. These resources are concentrated in the regions of Transdanubia and in northern and north-eastern Hungary.
While the production of coal has fallen in recent years, it still remains a significant part of the country's mining sector. Production of coal was approximately 9.2 million metric tons in 2016. According to reports, two small coal mines opened in 2016, with the intent of generating coal for household heating purposes. One small-scale Hungarian coal company use the mineral as a fertilizer additive.
The total lignite output in 2015 was 9.5 billion tones. 91% of these resources are used for heat and electricity production. There are three main extraction sites of lignite in Hungary. Márkushegy underground mine, located in western Hungary accounts for 6% of the total lignite production. Two mines Visonta and Bükkábrány belonging to MÁTRAI ERŐMŰ ZRT hold the major share of lignite production in Hungary.
By the end of 2014, the main hard coal extraction took place in the Mecsek region at the PécsVasas opencast mine. These resources are used for supplying local households with aﬀordable fuel.
Hungary’s mining sector and related companies suffered a major setback in late 2010 when toxic red sludge, which is a waste product of aluminum production, entered the Danube River after a spill at a Hungarian factory. The spill also caused the death of four people and left over a hundred injured. Although the toxic levels in the Danube are not at dangerous levels, other rivers, hamlets, and arable lands have been polluted by this spill.
While experts feel that Hungary will continue to be a small producer of mineral commodities in the coming years, production of cement and related construction materials is expected to rise due to increased spending on public infrastructure. The Hejocsabai Cement es Meuszmu plant in Miskolc had been shuttered in 2011 over a dispute related to ownership. The plant was sold to CRH plc. of Ireland, and the Irish company announced in June 2016 that it would resume production at the plant. The plant's production capacity is 1.7 million metric tons per year.
References and Further Reading