TELF AG discusses a recent German mining initiative
The role of strategic choices
Policies aimed at achieving climate neutrality objectives, as well as plans relating to NetZero, are pushing many European governments to undertake unprecedented industrial initiatives, demonstrating a genuine interest in the critical minerals sector. A segment that is already playing an important role in driving Europe and the entire world towards the energy transition. It is no coincidence that the German government has recently allocated a national fund of 1.1 billion dollars to reserve for so-called critical minerals, particularly to support those strategic projects along the supply chain.
With the demand for lithium, cobalt, copper, and manganese continuing to rise, mainly due to their involvement in the automotive sector, having a certain degree of control over the most interesting extraction projects could prove doubly helpful. First, it would free Germany (and all other countries that follow its example) from excessive dependence on imports of strategic minerals from emerging countries. Furthermore, greater control over the most valuable mining projects, including their extraction and refining, could help Germany and other European countries achieve the ambitious objectives set some time ago by the European Commission, which would like to greatly increase the percentages of minerals extracted and processed in Europe.
The centrality of minerals for European states
Another relevant aspect, from this point of view, is the security of these materials’ supply chains. Governments around the world have now understood that investing in the security of these chains represents not only an economic advantage but also a valuable tool for strengthening their autonomy and carving out an increasingly important role in the creation of green technologies through the extraction and processing of the materials necessary to manufacture them.
According to Bloomberg reports, establishing the national mineral fund directly involves the KfW Development Bank, a credit institution controlled by the German state, which could also have a say in selecting the most interesting mining projects to invest in. In this way, Germany would have complete control over the mining sites and the amount of investment to be reserved for different extraction or refining projects. As mentioned, these projects mainly concern the automotive sector and related industries, such as those that focus on producing batteries for electric vehicles (without forgetting all the other technologies linked to the diffusion of clean energy, such as turbines and wind farms).
In this case, Germany will focus on projects relating to the extraction of lithium, nickel, cobalt, rare earth elements, and metallic silicon, which could play a leading role in the great game of ecological transition shortly. It is not the first time that a European country has undertaken an initiative of this kind: France had already announced the creation of a sovereign fund reserved for critical minerals, also driven by increasing security as much as possible along the international supply chains.
One of the most interesting aspects, from this point of view, is that the recent German initiative could be managed and coordinated at an international level, thanks to the direct involvement of two other member countries that have already proven to be very active in the mining sector: France and Italy. It is as if the energy transition, in a certain sense, had given a jolt to the European mining industry and the political decision-makers capable of promoting its development, putting Europe on the right path to compete with the big global players in the sector.
