Imports of raw materials are necessary: ​​how Germany can free itself from dependence

Import of raw materials is necessary
How Germany can free itself from dependencies

Germany is highly dependent on imports of raw materials, most of which come from anti-democratic countries. This is the result of a study conducted by DIW. However, the institute also shows ways to break free from addictions.

Germany depends on the import of raw materials. Studio The German Institute for Economic Research now shows how much. There is a heavy dependence on raw materials that are essential for the energy and transport transition, such as lithium, magnesium and cobalt, and on less democratic countries such as China or the Congo. For 14 out of 30 raw materials classified as extremely critical, import dependence is 100 percent.

For three more raw materials, the share is more than 95 percent. Raw materials that are essential and have a higher delivery risk are considered special. “This year, Russia has shown us drastically how dependence on raw materials can be used by autocratic regimes as a tool for political pressure and what serious economic consequences this dependence has,” says Lukas Menkhoff, Head of DIW’s Global Economy Department. in light of the severe reduction in energy supplies following the outbreak of the war against Ukraine.

Germany and the European Union are more than 90 percent dependent on Chinese supplies for the so-called rare earth metals, which are essential for building smartphones, electric cars and wind turbines. The same is true for magnesium. According to DIW, no amount of individual action helps to reduce such addictions. “Many measures are needed, which should ideally be pushed forward at the same time,” said DIW study author Marius Zeevaert.

Addiction remedies

One of the possibilities would be to diversify the supplier countries, that is, to expand the supply to other countries. Brazil, Chile, India and Australia could be considered rare earth elements. Lithium can be imported from Australia, China and Argentina. Several providers reduce addiction. For example, if China were to block exports, Germany could rely on other trading partners. “All the measures mentioned would increase the price of raw materials, but Germany would gain a lot of security of supply,” says Lukas Menkhoff.

It is also proposed to supplement the storage with mandatory mandatory stocks. The procurement of relevant raw materials should also be pooled across Europe to offset the market power of several suppliers. In the long term, security of supply can be increased by partially replacing imports of raw materials. It also includes improved recycling. In addition, you can use your production capacity more intensively.

Magnesium and especially lithium can also be mined in the EU. Technical innovations that reduce or even completely replace the use of key raw materials can also be encouraged. “All the measures mentioned would also increase the price of raw materials, but Germany would benefit greatly – especially if the countries of the European Union cooperated,” says Menkhoff.

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