Germany's Revamped Raw Materials Strategy: Recycling, Diversification, and Self-Sufficiency
"A proactive approach to ensuring a sustainable and secure supply for its green transition"
Germany is taking action to reduce its reliance on non-democratic countries for critical raw materials. In response to an anticipated surge in demand for critical materials like lithium, copper, graphite and rare earths, Germany is seeking to reduce its supply chain risks and avoid potential supply failures by revamping its raw materials strategy. Germany's previous strategy was criticized for being too passive(1), and the new roadmap is expected to take a more assertive approach by increasing recycling, diversifying supply chains, and increasing domestic extraction of critical raw materials.
Data compiled by Dera(5) shows how dependent Germany and Europe have become on a small group of suppliers.
To further reduce its reliance on imports, Germany plans to build processing infrastructure in countries rich in critical minerals such as Chile, Indonesia, and Namibia(2), ensuring several suppliers in the future and hopefully creating greater local prosperity in local producing countries. Germany is also looking to establish strategic partnerships with countries that shall adhere to environmental, social, and governance standards. Chancellor Olaf Scholz supports the EU-Indonesia free trade agreement(3),which has been under negotiation since 2016, and argues that geopolitical developments require similar deals with other countries such as Mexico, Australia, Kenya, and India. In addition, closer economic ties with Japan are being reinforced to cooperate on securing critical mineral resources amidst global supply chain tensions(4).
Germany is also reopening abandoned mines such as the Käfersteige mine on the fringes of the Black Forest(5) to extract domestically fluorspar, a crucial component of electric cars. Fluorspar is one of 30 commodities listed as critical (see previous Genereso's blog). The project is expected to increase mineral self-sufficiency and reduce the country's dependence on imports. Germany cannot be completely self-sufficient in critical materials, but can produce some of the raw materials it needs, giving it an advantage, according to the government(5). The country will increase its emphasis on domestic extraction of raw materials, but this should only be prioritized if it leads to better environmental and social standards and strengthens the resilience of supply chains(1).
Overall, Germany is taking a proactive approach to tackle its dependencies and ensure a sustainable and secure supply of critical raw materials for its green transition. Although small contributions to Germany's critical material supply may not seem significant, it is a positive step forward in diversifying their supply chain.
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From China to Latin America: The Global Push to Diversify Critical Raw Material Supplies
"There is a need for a coordinated and strategic approach to addressing the challenges facing the CRM supply chain"
The European Commission's recently proposed Critical Raw Material (CRM 2023) Act (1) aims to improve the transparency and traceability of CRM supply chains, promote responsible sourcing practices, and strengthen strategic partnerships to ensure access to these materials. The latest report on the EU's CRM supply and demand underscores the need for a greater diversification and recycling of these materials.
The new CRM list includes a total of 30 materials, with 10 new additions since 2017 (2). Given that China and other countries control a significant share of the global CRM market (see Figure for Europe’s supply), the EU may face challenges in securing access to these materials on its own. By partnering with other countries with significant reserves of these materials, such as those in Latin America, the EU can help ensure a more stable and reliable supply of CRMs.
At Genereso, we believe that efficient use of materials and resource sharing across borders can help ensure a sustainable and high-tech future. It is important that the EU promotes responsible sourcing practices and works to ensure that the mining and production of these materials are done in an environmentally and socially responsible way. By taking a strategic and coordinated approach to addressing the challenges facing the CRM supply chain, we can help ensure access to the critical materials needed for a sustainable and innovative economy.
Countries accounting for largest share of global supply of CRMs to the European Union as of 2023(2).
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Genereso partners with Esri to leverage the power of spatial analysis and data science in mining exploration
Genereso is excited to announce a new partnership with Esri , the global leader in location intelligence. Location intelligence is essential to mining business decisions because it allows users to store, visualize, analyze and gain insights into real-time and big geospatial data.
The geospatial information currently shown on our platform by means of web map apps is already seamlessly integrated with Esri ArcGIS technology. Still, this upcoming collaboration will allow Genereso to further develop new powerful analysis tools to improve the search for the most prospective mining areas in Latin America. Genereso’s clients will therefore gain actionable insights when it comes to the prospection and exploration of the natural resources needed for today’s energy transition and digital transformation.
Diego Villagomez (CEO Genereso): “We are convinced that our comprehensive geospatial dataset along with Esri’s toolsets will leverage the power of spatial analysis and data science in mining exploration. This will allow our clients to enhance the understanding, insight, decision-making, and prediction of prospective areas via the use of location intelligence. We want to drive digital transformation in the mining sector using GIS-powered location technology and cloud-based solutions. As the clean energy transition augments the need for materials, the mining sector is still not prepared to keep up with the demand. The only way for the mining sector to meet the demand and global climate goals is through the use of innovative technologies that will speed up metal discoveries. We are convinced that public and private partners in the mining sector, whether global or local stand to gain from this collaboration between Esri and Genereso”.
Analysis
December 2022
Developing a sustainable future supply of metals for Switzerland
"Access to mineral resources should be considered a strategic priority for the future of Switzerland"
The latest 2022 report from the International Energy Agency(1) estimates that in “an ideal” Net Zero Emission Scenario, critical raw metals demand will increase fourfold by 2030. These critical metals(2) are increasingly used in green technologies and energy transition including copper, lithium, nickel, cobalt, and rare earth elements.
A major concern the world is currently facing is the risk of raw material supply chain disruptions. Population growth, decarbonization of transport, new technological applications, and the growing infrastructure projects led by governments around the world are contributing dramatically to an increased demand for raw material. It is forecast that by the end of the decade the supply-side of raw materials will not be able to cope with the increased demand (3).
Moreover, supply of many critical materials is concentrated only in a few countries (see Figure for Europe’s supply), leaving some regions at the mercy of a few resource-rich countries. Access to mineral resources should therefore be considered a strategic priority for the future of Switzerland, and Europe in general. Public and private Swiss and European stakeholders need to find ways to diversify their access to the global metal market, decrease their external dependencies, and tackle environmental problems more efficiently.
Biggest supplier countries of critical raw materials to the European Union as of 2020(4).
Switzerland should play a pivotal role ensuring that social and environmental controls, as well as traceability and sustainability criteria are applied to the sourcing of raw materials. GENERESO wants to be the link between responsible metal explorers in developing nations, and industrial, financial, and governmental stakeholders in Europe. The ultimate goal is to secure a future supply of raw material and energy for Switzerland and Europe while helping developing nations make use of their natural resources in a sustainable way.
The projects showcased in our platform include proven small and medium-sized greenfield and brownfield exploration projects (at initial and advanced stages) that require financial input and/or partnership to move forward. We are convinced that there are huge opportunities at the base of the metal supply chain for investors, as well as for companies looking for Merge and Acquisition opportunities.
