Is Habeck's raw materials fund falling through after all?
Federal Minister for Economic Affairs Robert Habeck’s (Greens) raw materials fund may yet come to a standstill—just shortly after China announced export controls on rare earths starting October 1. But how are we supposed to become independent of China without the funding for our own mining projects?
Lindner rejects KfW participation in raw materials projects
Everything was actually a done deal: after Robert Habeck’s one-billion-euro raw materials fund almost failed, the federal government finally provided the funds in 2023 and entrusted the state development bank KfW with their management. All that was missing was the allocation letter from the Federal Ministry of Economics to the Ministry of Finance. This was planned for January 1 of this year, but Finance Minister Christian Lindner sent it back. His requested change: KfW should not be able to participate directly in raw materials projects with its fund.
First dependent on Russian gas, then on China's rare earths
This happened much to the annoyance of the 30 companies that had already come forward with raw materials projects. We were among them, having just discovered a mine in South Africa. Its ore contains important rare earths such as dysprosium oxide and terbium oxide for magnet production. Accordingly, we also reacted with incomprehension. After all, how forgetful can one be? Just two years have passed since the Russian war of aggression against Ukraine, which made us feel our dependence on Russian gas very uncomfortably. Even then, we knew: China can play exactly the same game with us. Only then, instead of watching gas storage levels with eagle eyes, we will be looking into our yawningly empty raw material warehouses.
Smaller companies cannot protect themselves from export bans
On the one hand, our government is following the example of the USA with electric vehicle tariffs, allowing itself to be drawn into an ever-escalating trade war. And on the other hand, companies are expected to fend for themselves when it comes to their security of supply for raw materials? That does not add up! Large corporations like Siemens or BMW might still be able to cushion export bans because they have their own raw material stores. But small and medium-sized enterprises as well as startups would be left high and dry in such a case, as they usually do not have their own raw material storage facilities.
Bring as many rare earths into the country and store them as possible
It is important to help these companies. Therefore, we hope that the federal government will still reach an amicable agreement and support the raw materials fund. Until then, we can only hope and, as raw materials traders, bring as many rare earths into the country and store them as we can.
And you can help. Want to know how? Then get in touch with us.