Germany's problem with rare minerals as raw material

2024-03-12 10:20:00, Kosova & Bota CNA

Among the most important raw materials imported into Germany after copper are lithium and rare minerals. Among them are the metals scandum, cer, promethum, terbum and thulium as well as twelve other elements. These minerals are not so rare (thulium, although rare, is found more often than gold), but these minerals are rarely found in large quantities, so their extraction is not economically profitable.

A study published a week ago by the consulting company IW Consult and the Fraunhofer ISI research institute under the mandate of KfW Research (a subsidiary of the Bank with shares from the federal KfW Bank) explains the import and has investigated the importance of these minerals for the value in the economy and employment. Copper, lithium and SEE group mineral raw materials are analyzed in this study because they are crucial for key technologies and future technologies.

Provider with great market power

According to the study, almost a third of the gross value added in the copper-containing products processing industry depends on these imports. Automobile manufacturers as well as manufacturers of electrical, electronic and optical goods are particularly dependent.

In addition to the dependence on imports, there is also the fact that the market of raw materials is controlled by only a few providers, who have great power in the market. The largest amount of reserves of rare minerals is located in China. Potential reserves in Greenland, Canada and Sweden have not been sufficiently studied and therefore cannot be classified.

Germany's problem with rare minerals as raw material

Nearly a third of Germany's lithium imports and 19 percent of copper and rare earths are considered at risk. In lithium and rare minerals, the three largest providers have an 80 percent market share. Particularly important for the German market is the fact that 72 percent of copper metal comes from Russia and the same percentage of lithium carbonate from Chile. Imports of rare minerals have long been dependent on China, which supplies 84 percent of SEE group mineral imports.

Worse than Russian gas

This dependency is observed by Matthias Wachter, head of sector at the Federal Association of German Industry (BDI). He told DW that: "Dependence for many non-energy raw materials on China is already much greater than Russia's dependence on gas."

Matthias Wachter warns, that: "The lack of diversification of the supply network jeopardizes the guarantee of supplies for Germany. Although the economic consequences of a worst-case scenario have not been seriously examined, the lack of such supplies could massively endanger Germany as an industrial area as well as the well-being of the country. Because without raw materials industrial enterprises cannot work and we will not be able to achieve our climate objectives."

Experts warn that without access to lithium there can be no battery production. So the batteries have to be imported. If it cannot be imported, electric vehicles cannot be built. As a result, there will be a loss in added industrial value and a loss of jobs./ DW