Germany aims to set up a fund worth up to $2.2 billion to support domestic production and mining of raw materials and cut off its reliance on China, according to a Wednesday Bloomberg report.
The fund could launch next year if policymakers agree on financing, the report said.
A spokesperson for the Economy Ministry of Germany confirmed to Bloomberg that it’s working on a “raw materials fund to support raw materials projects at home and abroad.”
With nations around the world vying for key electric-vehicle and chip-making materials, Germany’s move would help it position itself to be more self-dependent, given that it relies on imports for 90% of crucial commodities, data from DIW Berlin shows.
China, for its part, leads the way as a top supplier.
Russia’s invasion of Ukraine revealed just how dependent Germany was on Moscow for natural gas shipments. In 2021, Russia account for 55% of Germany’s natural-gas imports, Reuters reported.
The European Union more broadly is looking to ramp up domestic refining and processing of raw materials, and has been negotiating with the US for a potential deal which would help the bloc reduce its reliance on China.
Meanwhile, China is in the midst of a rebound coming out of the pandemic, and some of Wall Street’s top banks raised their economic forecasts for the country. The banks predict China’s GDP will grow by roughly 6% in 2023.
