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Rare earths

January 30, 2012

Twelve German companies are clubbing together to ensure better access to the world's increasingly scarce raw materials. The alliance hopes to get a foot into global exploration and mining activities.

Look into an open-cast mine
German firms want a bigger role in digging for raw materialsImage: picture-alliance/dpa

A dozen German firms have teamed up to form a raw materials alliance, the Federation of German Industry (BDI) announced on Monday. The group around industry giants BASF, Bayer, Daimler and ThyssenKrupp are aiming to secure better access to critical but scarce materials.

"The alliance will focus on raw materials for which German industry senses marked supply risks," BDI Vice President Ulrich Grillo said in a statement.

"At the beginning, financial contributions will go toward fully setting up the alliance, but the amounts will increase once there are concrete projects," Grillo added.

No details were given about the alliance's start-up capital. The group of 12 intends to participate in exploration for and mining of crucial commodities worldwide.

China loses WTO appeal

Substances such as so-called rare earth elements are vital for future-oriented industries and technologies. The alliance cited as examples electro-mobility, wind energy as well as information and communications technologies.

Portrait of German Economics minister Philipp Rösler
Economics Minister Rösler backed the alliance morally, not financiallyImage: Picture-Alliance/dpa

The German companies' initiative was launched against the backdrop of mounting dependence on supplies from China.

On Monday, the World Trade Organization ruled that China unfairly limited exports of nine raw materials to protect its own manufacturers, rejecting an appeal by China. The ruling, which the US, Europe and Mexico have welcomed, applies to materials widely used in heavy industry, such as bauxite, manganese and coke.

China boasts a third of the world's rare earth deposits, but currently its exports cover 97 percent of global demand. Since 2009, China has limited its raw material deliveries abroad, triggering fear of supply bottlenecks in industrialized western nations, Germany included.

The German industry alliance said it did not count on state participation, but would be happy if the government were to support the work of the alliance by helping to open diplomatic doors in countries where the raw materials in question were located.

German Economics Minister Philipp Rösler welcomed the initiative in a statement, adding that it would help safeguard jobs in Germany.

Author: Hardy Graupner, Nicole Goebel (dpa, Reuters, AP, AFP)
Editor: Andreas Illmer