Spain's natural resources

Spain tends to import more commodities than it exports. It once exported iron but now exports products made from iron and steel. The country is a large and increasingly important exporter of olives and olive oil, sweet oranges, mandarins (especially clementines), wine, and various fruits and vegetables. Most exports go to France, Germany, Portugal, Italy, the United Kingdom, and the United States.

The Country

Spain is located in the southwest corner of Europe on the Iberian Peninsula between the Atlantic Ocean and the Mediterranean Sea. The dominant physical feature is the Meseta, a vast, somewhat barren tableland that has an average elevation of 600 meters and slopes gently to the west. Three major rivers flow from the Meseta to the Atlantic: the Douro, Tagus, and Guadiana. The high and broad Pyrenees are on the northern border with France. The Cantabrian Mountains run behind the north coast. The Betic Cordillera stretches from the Gibraltar highlands at the peninsula’s southern tip east to the province of Alicante. Less dramatic sierras punctuate the Meseta. Two major depressions are between the Meseta and the marginal ranges: the Ebro, with its namesake river draining to the Mediterranean, and the Guadalquivir, with its namesake river flowing to the Atlantic. The coastal plains are few in number and extent. Spain’s territory also includes the Balearic Islands in the western Mediterranean; the Canary Islands off the northwest coast of Africa; Ceuta and Melilla, two autonomous port cities along the Mediterranean coast of Morocco; and six small islands off that coast. In 2007, Spain had the world’s eighth largest national economy, but its ranking dropped to fifteenth in 2024 due to an extended period of recession (according to data from the International Monetary Fund). Key resources include coal, iron and steel, water, olives and olive oil, citrus fruit, grapevines and wine, and other minerals and foodstuffs.

Coal

Coal is Spain’s most plentiful natural resource. Bituminous and anthracite coals are found in the northern provinces of Asturias and León and in the southern provinces of Ciudad Real and Córdoba. Lignite (brown coal) occurs in the regions of Catalonia and in Galicia. Coal has been important to Spain’s economy since the last half of the nineteenth century. However, importing coal has been necessary because Spain’s deposits tend to be small, with narrow seams and impurities, and domestic anthracite is not suitable for conversion into coke for use in the iron and steel industry. Because of these disadvantages, Spain’s coal industry demanded government protection from competition with cheaper coal imported from Great Britain. This protection is estimated to have raised industrial prices in Spain between 2 and 5 percent until the 1960s, when the coal industry was largely nationalized.

A small amount of domestic black coal is used for local industry and for heating fuel. Brown coal is used for mine-mouth power stations, but imported steam coal is important for power generation. The main use of coal in Spain is the generation of electric power, especially during times of drought, when hydroelectric power is less available.

Spain has reduced its subsidies to the coal industry while investing in structural change that will limit coal mining and government welfare for coal-mining districts. The Institute for the Restructuring of Coal Mining and Alternative Development of Mining Districts supports projects that create jobs and promotes alternative development of mining areas. Since 1998, billions of dollars have been invested in hundreds of mining-district projects, closure of some coal production units, early retirement of miners, aid to some companies, and investment in some companies to guarantee access to coal reserves for reasons of national security.

Iron and Steel

The iron and steel industry depends on two main resources: iron and coal. The nineteenth century blast furnaces required about 4 metric tons of coal to process 1 metric ton of iron. This ratio drew iron and steel producers to the coal deposits. Because Spanish coal was not competitive in quality and price with foreign coal, the iron and steel producers finally located in the province of Vizcaya. From there, ships exported Spain’s iron ore and pig iron to England and returned with inexpensive Welsh coking coal from Cardiff. By 1901, 90 percent of Spain’s excavated iron ore was exported to Great Britain. Although some of the largest iron-mining companies were subsidiaries of foreign iron manufacturers, most of the profits remained in Spain, helping to develop the iron and steel industry in Vizcaya and also partially underwriting the industrialization of the city of Bilbao. In 1902, the three largest iron and steel companies merged to form Altos Hornos de Vizcaya, which became the largest and most profitable industrial enterprise in Spain. However, at that time, Spain’s outputs of pig iron and steel were small compared to those of Great Britain and Germany.

The domestic industry’s growth resulted largely from tariffs protecting an oligopoly led by Altos Hornos de Vizcaya. When demand for iron and steel rose, the oligopoly raised prices before attempting to increase supply. Until 1960, the iron and steel industry retarded Spain’s economic development.

In 1959, Spain adopted an economic stabilization plan and embarked on an industrial revolution in which the industrial sector grew at a faster rate than the gross domestic product (GDP). Much of the dynamic growth in iron and steel production resulted from the derived demand of a rapidly growing Spanish automobile industry. By the 1970s, the iron and steel industry, made more competitive by the creation in 1956 and gradual expansion of the state-owned Empresa Nacional Siderúrgica Sociedad Anónima (ENSIDESA), began to export production.

Spain was required to lower its iron and steel output upon joining the European Union (EU) and the European Coal and Steel Community in 1986. Nevertheless, the industry remained fairly dynamic. The industry also supports exports of machinery, ships, and other articles of iron and steel, not to mention the export of vehicles, one of Spain’s most important exports by value.

Water Resources

The most industrialized regions of Spain—the Basque Country and Catalonia—are relatively well endowed with water. However, water is a scarce resource in most of Spain, large regions of which receive less than 500 millimeters average annual precipitation. These regions are dry in the summer months, when their rivers carry less water for irrigation, processing raw materials for industry, and hydropower. Only 8 percent of Spain’s hydrologic resources are available for use without artificially altering the natural regimen; in the rest of Europe the comparable figure is 40 percent. As a result, Spain has about twelve hundred large dams and reservoirs and many canals to alter the natural water regimen so that an estimated 37 to 47 percent of the water is available for use.

Water management in Spain focuses on the river basin or watershed. Each autonomous community manages watersheds entirely within its boundaries. A Hydrographic Confederation oversees watersheds that spread over more than one autonomous community. Spain’s dams and reservoirs generate hydroelectric power, provide irrigation water for farming, supply potable water, support recreation, regulate downstream flow, and make water available for interbasin transfers. The large reservoirs have a water storage capacity of about 52 cubic kilometers; about 79 percent is for agriculture, 15 percent is for potable water in the urban supply network, and 6 percent is for industry. The transfers of water from one basin to another (trasvases) began in 1980 with the Tagus-Segura aqueduct, which stretches 300 kilometers from the upper Tagus River to the Segura River basin in the provinces of Albacete and Murcia; most of that water has been used for irrigating citrus orchards. The National Hydrological Plan of 2001 called for transfer of water from the Ebro River to basins along the Mediterranean coast, but public outcry led to its replacement with Programa AGUA (2004), a program to build desalinization plants in six provinces along the Mediterranean. Spain is forging additional policies that support sustainable water management.

Olives and Olive Oil

Spain has about 2.4 million hectares in olive cultivation—as much as in Italy and Greece, the next largest olive growers in Europe, combined. Olive trees prefer thin, stony soils with little water and long, hot summers. The olive tree is intolerant to temperatures less than -5° Celsius. Most of the olive cultivation is in Andalusia, where 58 percent of the total cultivated area is dedicated to olive trees. The province of Jaén is home to more than one-half of Andalusia’s olive groves, followed in importance by the provinces of Córdoba, Sevilla, Badajoz, and Granada. Almost all of this cultivation is for oil; only about 6 percent is for table olives. Spaniards consume about 0.4 liter of olive oil per person per week, and olive oil provides most of the fat in their diets. As of 2024, Spain was the world’s largest exporter of olive oil.

In the late twentieth and early twenty-first centuros, olive oil production has risen in response to world demand. Although the traditional form of olive cultivation has been on small farms of less than 20 hectares, the growing demand has led to more farms larger than 100 hectares. The large groves tend to be located in flatter areas, use drip irrigation to increase tree density, and adopt mechanical harvesting. The large groves not only enjoy lower costs of production per kilogram of olives than small groves but also benefit from EU subsidies that are correlated positively with the amount of production. The traditional groves on steeper slopes also can receive aid, but only if they minimize tillage, keep walls and terraces, maintain at least 50 percent green cover on the land, and do not use chemicals. The more mountainous traditional groves try to compensate for their lower productivity by forming Designation of Origin (DO) areas. The DOs have regulatory councils to ensure quality, and some of their farms have adopted organic cultivation. As Spain has more than 260 olive cultivars, there is much room for market differentiation.

Olive groves create a distinct landscape. In parts of Andalusia there are little more than olive trees for as far as the eye can see. Olive mills are located on or near farms, so the harvested olives can be pressed quickly to prevent an increase in acidity. Virgin oil is bottled at the mill. Pomace oil is made in refineries from olive pomace and pits and is often mixed with virgin olive oil; it is used in commercial cooking. Lampante oil is refined in cities and is used in industry.

Citrus Fruit

Spain’s citrus crops are sweet oranges, mandarins (especially clementines), lemons, grapefruit, and bitter (Seville) oranges. They are grown mainly in Mediterranean coast provinces, from Castellón to Málaga. The center of sweet orange orchards has been the province of Valencia; clementines are raised especially in Castellón; lemons and grapefruit prefer the hotter province of Murcia. However, citrus production is increasing rapidly in the region of Andalusia. Everywhere the trees are irrigated, either through flood irrigation or, in newer orchards, through drip irrigation.

The sweet orange accounts for about one-half of Spain’s citrus production. The sweet oranges come in many varieties and are typically raised on small farms belonging to cooperatives that supply packinghouses. Barring water-supply problems and unusually cold temperature spells, their production is gradually increasing.

Clementines, a cross between the sweet orange and the Chinese mandarin, are small, seedless citrus of different varieties. The small clementine tree (around 3 meters tall) is trimmed annually, and the fruit must be clipped by hand; a job for which the cooperatives usually recruit migrant labor. Clementine cultivation has expanded significantly, with most new orchards located in the Guadalquivir Valley and averaging more than 100 hectares. Spain is the world’s largest exporter of clementines, and US imports of the fruit have risen dramatically in the early twenty-first century.

Spain supplies nearly one-half of all the world’s exports of oranges and clementines, which generates billions of dollars per year. More than 80 percent of these exports go to Europe, especially Germany, France, the Netherlands, and the United Kingdom.

Grapevines and Wine

Grapevines require a dry, well-drained soil, summer temperatures neither too cold nor too hot, and an autumn without heavy rain. The vines grow in every province of Spain, but most vineyards are located along the Mediterranean coast from near the French border to the province of Almería. However, the largest wine region is La Mancha (in the provinces of Albacete, Ciudad Real, Cuenca, and Toledo). Spain has more land devoted to the wine grape than does any other country, with 1.2 million hectares under vine cultivation. However, the country produces less wine than France and Italy because of its aridity and rainfall variability.

Spain’s vineyards traditionally were planted in wide rows, with drought-resistant vines kept low and bushy to minimize evaporation. The resulting wine was ordinary to good, with some exceptional wines in the regions of Jerez, La Rioja, and Priorat. However, growers have been replacing vines with new grape varieties, adding drip irrigation, and pursuing new methods of wine making.

Spain’s sixty-nine Qualified Designation of Origin (DOCA) and DO areas produce distinct quality wines crafted from 146 varieties of grapes. Only La Rioja and Priorat have the DOCA designation. Vino de la Tierra (VdlT) wines come from regions with no special DO status but have a distinctive character. Vino Comarcal (VC) wines come from areas without any claim to quality. Finally, Vino de Mesa (VdM) table wines are a blend of wines from different regions and from any vintage. The VC and VdM wines are for domestic consumption, which is considerable, as wine is typically imbibed with afternoon and evening meals. Wine is integral to the Spanish culture; it has been made in the country since the fourth millennium before Christ. Today, a number of Spaniards in rural areas make their own wines and have their own bodegas (wine cellars), preferably in caves dug into hills near their homes.

Although wine production accounts for only about 2 percent of Spain’s total agricultural production by value, it enjoys the fastest growth in net sales of any agrifood industry. About one-half of Spanish wine exports is bulk, going mainly to France, Italy, and Portugal where it is used to blend with domestic wines before bottling. Spain’s bottled exports go mainly to Germany, the United Kingdom, the United States, and the Netherlands.

Other Resources

In the dry interior of the tablelands, wheat and barley are important crops grown for domestic consumption. Both are grown largely in the same areas and usually secano (without irrigation). Although barley is hardier, both crops can suffer significantly reduced yields from droughts and spring storms. Other crops grown mainly for the export market include Spanish melons, eggplants, tomatoes, lettuce, strawberries, peppers, and tomatoes. They are often grown under huge sheets of plastic and harvested by migrants living in nearby encampments.

Spain is highly mineralized, and its metal ores other than iron include alumina, copper, gold, lead, mercury, nickel, pyrites, silver, tungsten, uranium, and zinc. Industrial minerals include barite, clays, fluorspar, and potash. Energy resources also include small amounts of and natural gas.

Bibliography

Harrison, Joseph. "The Economic History of Spain Since 1800." Economic History Review 43, no. 1 (1990): 79-89.

Sommers, Brian J. The Geography of Wine: How Landscapes, Cultures, Terroir, and the Weather Make a Good Drop. New York: Penguin Group, 2008.

"Spain." The World Factbook, US Central Intelligence Agency, 29 Dec. 2024, www.cia.gov/the-world-factbook/countries/spain/. Accessed 6 Jan. 2024.

Tortella, Gabriel The Development of Modern Spain: An Economic History of the Nineteenth and Twentieth Centuries. Translated by Valerie J. Herr. Cambridge, Mass.: Harvard University Press, 2000.

Viladomiu, Lourdes, and Jordi Rosell. "Olive Oil Production and the Rural Economy of Spain." In Sustaining Agriculture and the Rural Environment: Governance, Policy and Multifunctionality, edited by Floor Brouwer. Northhampton, Mass.: Edward Elgar, 2004.