The Chancellor of Germany, Olaf Scholz announced on Sunday that Germany aims to help mineral-rich countries such as Chile, Indonesia, and Namibia in establishing their processing infrastructure to decrease their dependence on China.
Reuters reported that Berlin is seeking to balance its relationship with China and decrease reliance on China for crucial inputs such as nickel and other critical minerals.
Scholz stated in a speech at Germany’s industrial trade fair Hannover Messe that if more processing steps are established near the locations where the raw materials are found, it will not only generate greater local prosperity but will also guarantee that there is more than one supplier in the future.
Additionally, he expressed his support for a free trade agreement between the European Union and Indonesia, which has been under negotiation since 2016.
Scholz is committed to ensuring that the trade agreement is finalized, citing geopolitical developments in Europe and Asia as reasons for similar agreements with other countries like Mexico and Australia, Kenya, and India.
In his words, “I am committed to ensuring that we finally get this agreement across the finish line now.”
It was suggested that because of geopolitical developments in both Europe and Asia, it would be beneficial to establish similar agreements with other countries like Australia, Mexico, India, and Kenya.
Germany, like many other industrialized nations, depends heavily on a steady supply of minerals to sustain its economy. However, in recent years, Germany has become increasingly reliant on China for the supply of critical minerals, such as rare earth elements, that are essential for the production of high-tech products such as smartphones, electric cars, and wind turbines.
This dependence on China has raised concerns in Germany, as it leaves the country vulnerable to supply chain disruptions, geopolitical tensions, and market manipulations by China. In addition, there are concerns over China’s labor and environmental practices in the mining and processing of these minerals.
To address these concerns, Germany has been seeking to diversify its sources of critical minerals by investing in domestic and international mining projects, promoting recycling and circular economy practices, and seeking partnerships with other countries that have mineral resources. However, breaking the dependence on China remains a long-term challenge for Germany and other countries that rely heavily on imported minerals.
